As first movers, the current crop of car-sharing start-ups have a huge jump on securing parking spots and member relationships in their given communities. But will that be enough when they're facing potential competition from billion-dollar rental companies? C. Kenneth Orski, transportation consultant and founder of Urban Mobility Corp., in Washington, D.C., has been reporting on trends in U.S. transportation since 1991 in his newsletter, Innovation Briefs. Inc. asked Orski for his take on car sharing.
Inc.: Can car sharing work in America?
Orski: Yes, on a limited scale. It won't be a mass phenomenon. It certainly works in communities where there are dedicated environmentalists. In places where car sharing would be based more on economics than ideology, places like Manhattan and San Francisco, I could see it bloom or at least be a sound economic proposition. But the question is, Could you actually run a car-share there? Where would you store those vehicles, and how much would you pay to store them?
Inc.: Why is all the start-up action happening now, as opposed to five years ago?
Orski: I wouldn't attribute the start-up action to changing economics. The relative cost of owning a vehicle is not higher -- it could even be lower -- than it was then. Correspondingly, the relative cost of offering customers shared vehicles is no cheaper today than it was five years ago. I think the car-sharing concept spread to America simply through word of mouth. As the concept grew in Europe, then in Canada, more American travelers and transportation experts wondered if it could work here.
Inc.: Are the car-rental giants and automakers paying attention?
Orski: The rental people are watching it much more carefully than carmakers are. I suspect that if the rental agencies see car sharing taking off, they'll move in and establish neighborhood-based rental outlets. They're watching -- quite carefully.