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The economics of peer-to-peer car sharing

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The concept of car sharing — where drivers can rent cars by the minute or hour from a company like Zipcar (s ZIP) — has yet to reach mainstream status, but it has already emerged with a new format in certain cities. That’s peer-to-peer car sharing (sometimes called distributed car sharing, neighbor-to-neighbor car sharing or car sharing 2.0). In this model, regular car owners rent out their personal vehicles to the community by the minute or hour and make money off their car while providing a service to the community. The concept is so appealing, at least in the entrepreneur and startup world, that there are at least a dozen companies offering this service in various cities across the world.

While it’s still very early for this industry (the largest networks have just a few thousand members), the key to this concept taking off one day will be that the economics pan out — for the companies, the car owners and the drivers. To read my essay on the economics of peer-to-peer car sharing, check out GigaOM Pro (subscription required).

Image courtesy of JordiCORE

2 Responses to “The economics of peer-to-peer car sharing”

  1. larryshaeffer

    didn’t see any reference to the actual, real world cost of operations, ex. installation costs of in-car card swipe and tracking technology-on average $400/car. Not to mention back office operations etc. Who pays for this up front cost? Then typically, car owner and Peer-t-o peer company split the fees, Is this really sustainable? car rental, car share biz are a low margin business with car rental companies squeezing dimes out of literally hundreds of thousands of vehicles in their fleets (ex. Enterprise has 800 thousand cars). So, the long term prospects of splitting the revenues between company and private car owners is questionable.
    Larry Shaeffer
    co-founder PhillyCarShare