Car Sharing

Car and Ride Sharing Technology Explained

What is Car Sharing?


Car Sharing Definition

Car sharing refers to a model of car rental where vehicles are rented out for shorter periods of time (usually on a per hour basis) and often intended for shorter distance trips in urban areas where personal car ownership can be challenging.

Ride Sharing Definition

Ride sharing refers to the act of sharing a vehicle for monetary or non-monetary benefit with passengers to provide personal convenience, environmental benefit, and reduced congestion on public roads.


Car Sharing Technologies Explained

The basic principle of car sharing is that it provides individuals with the benefits associated with private cars without the costs and responsibilities of ownership. Car sharing is often seen as a popular alternative method of transportation in cities because it is more flexible than mass-transit, car ownership may be too expensive, or the dense urban environment may make vehicle ownership unfeasible. As an overall industry, car sharing has seen significant growth from the rise of the shared-use economy.

Audi Car Sharing
Audi Car Sharing App

Car Sharing

Shared vehicle (also called Car Sharing, Car Clubs (UK), and P2P Car Rental services such as Getaround and ZipCar, provide on-demand access to local vehicles. Users typically pay by the hour and services either provide designated pickup-dropoff locations or delivery of the vehicle. This method of vehicle usage provides a hassle-free alternative to traditional car ownership, with the freedom to go wherever you want when compared to ridesharing services.

There are several categories of car sharing:
  1. Peer-to-Peer Car Sharing
    The process where a community of existing car owners make their vehicles available for others to rent for short periods of time. Car sharing software matches owners of cars that are available to other drivers to rent.
  2. Business to Consumer (B2C) Car Sharing
    A company owns a fleet of cars and facilitates the sharing amongst members. This method of car sharing is currently being actively explored by several prominent auto manufacturers (e.g. BMW, Peugeot, GM) and existing car rental companies (e.g. Enterprise, Hertz).
  3. Not-For-Profit or Co-Op Car Sharing
    A local organization or online community that facilitates the use of sharing unused vehicles, which focuses on providing social and environmental benefits, rather than purely profit driven incentives.

Ride Sharing

The traditional view of ridesharing (also called car-hailing or carpooling) meant people pooling from a common origin, such as a residence or park-and-ride lot, to a common destination, such as an employer or business park. Companies such as Uber and Lyft figured out that they can utilize smartphones and ridematching software to provide an online platform that allows entrepreneurial drivers to find passengers who are seeking one-way rides. No cash is involved and the riders pay the driver using a virtual wallet.

According to consulting firm McKinsey, ridesharing and vehicle subscription services could add another $1.5 trillion to the auto industry by 2030. In addition, McKinsey predicts that 1 in 10 vehicles sold in 2030 will potentially be a shared vehicle.

There are currently several companies dominating the ride sharing industry (and also considered to be the best ride sharing companies):