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California Poised to Allow Personal Vehicle Sharing Services

3:52 PM EDT on April 28, 2010

car_share_sierra_club_small.jpg(Photo:

Car sharing is a growth industry, as pioneer City CarShare
would tell you, and it has beneficial environmental and economic impacts. Studies of car sharing services like Zipcar and City
CarShare show that for every car that is shared, up to 15 private
vehicles are taken off the road.
Owning and operating a personal car is the second-highest family
expense behind owning a house, and the highest expense for people who rent.

The
car sharing model, however, is predicated on operating in dense urban
areas where there is good transit and a large pool of prospective
customers who don't want to own a car. On the other hand, it doesn't
make financial sense for car sharing companies to operate in suburbs or
rural areas. Not yet, at least.

City
CarShare is trying to pioneer personal vehicle sharing, where car
owners would make their vehicles available to a pre-screened pool of
personal vehicle sharing participants during the periods of the day
when their car is not in use, which for many vehicles is upwards of 90
percent of the time.

If you drove to work in San Francisco
and left your car idle from 8 am to 6 pm, for instance, you could allow
a pool of prospective vehicle share participants to use your car, for
which you would make enough money to cover the cost of usage. If you
consider the cost of owning and insuring your car to already be a
sunken expense, this could be a way to "make" money for a commodity
that is otherwise depreciating in value.

Of the many
challenges to expanding car sharing to privately owned vehicles, the
first obstacle is current insurance law. In most states, unless you are
commercially licensed or you operate a livery service, receiving
compensation from others for using your vehicle voids your personal car
insurance coverage.

To this end, City CarShare has been working with California State Assemblymember Dave Jones (D-Sacramento) and Spride Share, a new company started by cleantech financier Sunil Paul of Spring Ventures, to draft Assembly Bill 1871, which would change insurance law to permit remuneration for personal vehicle sharing.

"The
idea is to make it possible for people to participate in car-sharing
programs," said Assemblymember Jones. "This is part of a package of
approaches that look at ways we can engage insurance companies in a
positive way to encourage better environmental behavior."

If successful, personal vehicle sharing could expand the car share
model to regions poorly served by transit, offering those who don't want
to own a car or those who can't afford a car the ability to be mobile.
It might even alter the national narrative of personal car ownership,
say proponents, shifting the way consumers view cars, so that vehicles
are less extensions of one's personality and more about getting from
place to place.

"Personally owned vehicles, especially in America, are highly
identified
with status," said Rick Huthinson, City CarShare CEO. "We're hoping
that the perspective of cars as an aspect of status, as something you
have to have, is becoming less of an issue."

Personal
vehicle sharing services could be administered through an established
car-sharing service like City CarShare, or it could eventually be done
through personal and professional networks like Facebook and LinkedIn.
Participants would be screened by the DMV to assure a good driving
record, just like they are for current car-sharing businesses.

Assemblymember
Jones echoed Hutchinson's sentiment about the significance of the
initiative, saying "I think it's revolutionary. If we can move to a
place where people are able and are encouraged to share their vehicles,
we will reduce the number of vehicles necessary and will provide for
more efficient vehicle use."

Getting to the point where
the public accepts the idea of sharing their private cars with the
wider community, however, will be a challenge, one Spride Share CEO
Sunil Paul thinks can be surmounted with the technology we already have.

"We believe there is a way to dismantle the idea of personal car
ownership and turn it into a shared resource," he said. "Our overall vision is to replace private automobiles with private cell
phones."

Paul said he hopes the public eventually sees cars as a service and not a commodity and he drew
analogies to cloud computing or commercial building leases.

Paul, who made a fortune in anti-spam software, became interested
in personal vehicle sharing after completing research for the Gigaton Throwdown, a project
that asked whether the U.S. could scale up clean energy solutions and
reduce one gigaton of CO2 by 2020.

According to Paul, the Gigaton Throwdown study showed that
replacing the entire fleet of gasoline vehicles in the U.S. with
electric vehicles was "practically impossible" within a reasonable time
frame.  "It's very difficult to scale up solutions to transportation
problems around climate and energy security," said Paul. "We started
looking for opportunities that could deal with transportation problems
without building entirely new cars."

While
the current bill introduced in the California Assembly would only allow
vehicle owners to cover the costs of sharing the vehicle, including
insurance and depreciation, Paul hopes the legislature will alter the
language so that vehicle owners could actually make more money out of
the venture.

According to Jones, the bill will go before
the Insurance Committee on May 5th and then to the full Assembly
shortly thereafter. He said he has been working with insurance
companies to draft the bill and doesn't believe there will be
significant resistance.

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