Car Sharing

What is car sharing?

Car sharing is a car rental service that allows individuals to use vehicles for short periods of time, often by the hour.

It can be an economical and environmentally friendly option for those who only require occasional access to a vehicle.

How it works

Drivers can subscribe to car sharing services by opening an account via the internet or by telephone. Car sharing organizations usually require an unrestricted driver’s licence, a clean driving record and that drivers be at least 21 years or age.

When the required information is provided to the organization, individuals can make reservations and are given access to a vehicle (often by being given codes or keys).

Some organizations have parked vehicles in numerous locations that allow for self-serve access (after reservations are made), while others have pick-up and delivery options.

Various sizes and models of vehicles may be available and the cost will vary depending on the company, length of time rented, distance travelled, insurance costs, and usage fees.

Some organizations require drivers to sign-up as members and pay monthly or annual fees, in addition to fuel and other rental costs.

Types of car sharing options

There are three types of car sharing services available to Canadian consumers: Co-op, private and peer-to-peer.

Co-op car sharing businesses allow consumers to purchase shares in their organization, and in return are able to provide input at general meetings and elect representatives to the Co-op’s Board of Directors.

Owning shares will mean the up-front cost when joining is higher, but the fees for use can be less compared to those of a private company, depending on your usage of the service.

Private car sharing companies offer car rental services but do not provide the option to purchase membership shares or participate in the governance of the company.

Another option could be peer-to-peer car sharing, where existing car owners make their vehicles available for others to rent for short periods of time.

Peer-to-Peer sharing models act as middle-men, bringing two parties together, screening applicants insurance, managing payments and bookings. With this option, the insurance is managed by the car-owner, and typically the owner has to get special coverage.

Why car share?

Car sharing services can provide drivers with various benefits:

• Drivers don’t need to think about car maintenance, ongoing insurance costs, and everyday fuel and parking concerns.
• Allows 24-hour access to different types of vehicles that can be used by the hour, or day.
• Encourages you to also rely on environmentally sustainable methods of transportation including walking, biking, and taking public transit, and can help to reduce daily traffic congestion.
• Can help consumers reduce pollution caused by daily vehicle usage. Some studies estimate that every shared car could replace 15 individually owned vehicles.

Things to consider

• Car sharing services are primarily offered in urban areas.
• Suitable for those who do not need a car every day and have access to other methods of transportation, including walking, transit, carpooling, etc.
• Each organization operates differently and charges may be calculated in various ways including kilometres travelled, length of time used, fuel consumed, or some combination of charges.

Renting a car vs. car sharing

When weighing your options between renting a car and using a car sharing service, think about how often the car is required and is the distance you plan to travel.

If the car is only required once in a while, it may be better to rent a car, rather than pay monthly membership fees to a car sharing service.

Driving the car outside of your city, or going on a trip where the car is required for more than 24 hours, a car rental is usually the better option.

For short trips in the city, such as using the car for a few hours to shop or visit, a car sharing service may be your best bet.

The chart below displays the options of both:

Insurance

While it is required that users have a certain level of driving experience and meet minimum age requirements, insurance for car sharing services differ from company to company.

For example, some organizations require pre-existing insurance coverage while others include insurance as part of the package fee.

In other cases, drivers who have no previous insurance record can build one by using the service.

There may also be an annual fee or a deduction if the driver is involved in an at-fault collision.

Consumers should inform themselves of the insurance costs and policies before participating in a car sharing service.

Resources

For more information on car sharing services, please visit http://carsharing.org.

Based on source material: https://ised-isde.canada.ca/site/office-consumer-affairs/en/buying-and-leasing-big-ticket-items/car-sharing