Those in the car industry can see a paradigm shift approaching. And it could start to make things quite difficult for car companies.

More people than ever before are living in cities. These congested spaces are becoming less and less suitable for cars--and a whole generation is growing up, buying fewer cars as a result.

Combined with the accessibility of technology, this has seen a rise in car-sharing schemes--and now car-sharing company Zipcar is also looking into 'ride sharing'.

Car-sharing versus ride sharing

Car sharing should be quite familiar to regular readers of GreenCarReports.

It essentially works like a short-term rental, where a customer can sign up to a service, select a car nearby, drive it to wherever they require, and park it there ready for another customer to come along and use the car.

Companies like Zipcar, car2go and DriveNow all work on this principle, and many are now using electric vehicles to better suit these city-centric services.

In contrast, ride-sharing relies on a user who already has a car, giving another user a lift.

The proliferation of smartphones has made it easier and cheaper than ever to coordinate such a service. The phone's GPS receiver tracks the distance traveled during the booking, charging the passenger a fare and paying the driver.

Zipcar looking to expand

According to Bloomberg, Zipcar is looking at expanding from its current hourly car rental service, to cater for customers who haven't taken the plunge into car ownership.

While the ride-sharing concept has some detractors--particularly in California, where the California Public Utilities Commission believes the services are too similar to unlicensed taxi services--Zipcar believes customers today want "instant access to a network of mobility options."

San Francisco-based Lyft, run by Zimride, has already been operating for five years.

The company vets potential drivers, and connects them with ride-seekers using Android and Apple software applications. The service has 10,000 members--and provides an important alternative to a city that only has 1,500 licensed taxis.

Scaling to capacity needs

Joe Kraus of Google Ventures, subsidiary of Google and investor in San Francisco-based ride sharing service Side.Cr, explains, "You just don't have enough cabs on the road.

"One of the great things about peer-to-peer ride sharing is that it can scale to capacity needs."

The services are mainly city-based at the moment, and are less likely to expand beyond cities as car ownership is more prevalent where there are fewer public transport options. Some cities too are less lenient towards such services--New York, for example.

It's safer than it sounds, too--Zimride and Side.Cr both conduct criminal background checks and multiple interviews with potential drivers. Only 5-6 percent of drivers who apply are selected by Zimride, for example.

If Zipcar also sets up a service, it could make the service even more competitive for non-car owners--and provide a further step away from car ownership for a new generation.


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