Car sharing and the changing view of vehicle ownership

Car sharing and the changing view of vehicle ownership

Owning your own car can be great. You can basically go where you want, when you want, at a moment’s notice. In many parts of the world, the majority of middle-class households own at least one car and, in some countries, like the United States, private car ownership is very much a part of the national identity.

But this ongoing love affair with the privately owned car is changing in many parts of the world, even in the automobile-enamored United States. What’s different? The cost of ownership, for one thing, and the growing idea that renting might be better than owning.

The real costs of car ownership

There are a number of ongoing costs associated with having your own car. In much the same way that adopting a pet requires a long-term commitment – making sure that the animal is fed, watered, and kept safe and healthy – buying a car means being responsible for keeping the vehicle fueled, serviced, registered, and insured for as long as you own it. Bridge tolls, access fees, and the occasional moving violation or parking ticket can add to the overhead. Plus, in urban areas especially, where real-estate is at a premium, finding a safe, convenient place to park your car when you’re not using it can be both difficult and expensive. Add it all up, and owning a car isn’t exactly cheap. The idea that cars are expensive and troublesome to own is catching on, and a growing number of drivers are opting out.

Walking, riding a bike, or using public transportation can, in many cases, be great alternatives to driving, but having access to a car can still make it easier to do a number of things, like run a series of errands, get to a meeting, or buy large items. Renting a car is, of course, an option, but traditional rental services have mostly involved multi-day arrangements, for weekend getaways and longer holidays. What about when you need a car for just a couple of hours, or just to get across town? That’s where car sharing comes in.

How car-sharing works

Car sharing refers to organizations that maintain a fleet of vehicles, in a network of locations, that can be accessed by people (or businesses) on an as-needed basis, at an hourly and/or mileage rate. With most set-ups, you apply online to become a member of the service, submitting personal details and setting up payment preferences. Once approved as a member, you receive a preconfigured SmartCard that lets you unlock any cars you reserve.

If you want to drive somewhere, you go online, using a website or a smartphone app, find a nearby car, and reserve it. When you get to the car, the reservation has already been transmitted to the car’s onboard unit, so your SmartCard unlocks the car. Once you’re done driving, you either return the car to where you found it, or leave it in a designated spot near your destination. Either way, you’ve just had the use of a private vehicle, without the overhead and responsibility that comes with actually owning it.

Saving money and the environment

The “pay-as-you-go” approach works well for people who might not otherwise be able to afford their own car, like students and people with limited incomes, and provides on-demand mobility for people who simply don’t want to own their own vehicle.

Car-sharing helps people stay mobile while saving money, and it can also provide a greener way to get around. Car-sharing services can reduce the number of privately-owned cars on the road and that, in turn, can reduce overall emissions. The availability of car-sharing services may help consumers forego vehicle purchases and may encourage people who already own cars to get rid of them. Also, many car-sharing services use efficient gas-powered vehicles or even electric cars. In the French city of Lyon, for example, designated areas of the city are only open to electric vehicles. The car-sharing service SUNMOOV’ provides electric cars and charging stations for use in these districts.

Car-sharing services can also be integrated into public-transport schemes, to give consumers more ways to get around. This is especially true in places where the public-transport infrastructure already uses SmartCards for ticketing. The car-sharing service can issue SmartCards that are compatible with the systems used by public buses, metros, and railways. Having one card that works with multiple transportation schemes gives citizens more ways to get around, and encourages people to lessen their environmental impact by using public transport more often.

Growing quickly

The basic concept of car sharing has been around for some time – the first services in Europe began in Switzerland just after World War II – but the phenomenon has taken off in recent years as Internet applications and smartphones have made it easier to manage and expand these systems. In the past ten years, car-sharing services have started appearing in urban areas around the world. A report, published in 2006 by researchers at the University of California at Berkeley, found that there were car-sharing operations in about 600 cities worldwide, with 348,000 people sharing nearly 11,7000 vehicles as part of an organized car-sharing service. More than 60 percent of that activity was in Europe, but services have begun taking off in other places, too, including North America, Asia, and Australia. In a recent survey-based study, Frost & Sullivan found that traditional car sharing services involved around 700,000 members in 2011. They predict memberships to grow to more than 15 million in 2020.

Rapid growth has started to attract bigger players. The market is already beginning to consolidate, as small car-sharing companies in Europe and the US have been picked up by leading car makers and rental companies. In Europe, Daimler owns Car2Go, BMW owns DriveNow, and Volkswagen and Ford are said to be exploring the market. In the U.S., ZipCar was bought by the rental agency Avis in 2012.

It has to be simple and secure

As the car-sharing market continues to grow, and there is greater competition within regional areas, the services that have the greatest chance of succeeding are those that offer a better customer experience. Convenience is everything in this market, and that means consumers need to feel that the shared car is as easy (or even easier) to use than one they might own themselves.

The smartphone apps, websites, and back-end applications that these services rely on need to be seamless, intuitive, and efficient. The system has to support fast reservations, provide vehicles that match consumer needs, make it easy to find and access the automobiles, and use a straightforward yet secure method for collecting payment.

Security is an especially important issue when it comes to the SmartCard used to unlock the reserved car. Counterfeit and cloned cards have already surfaced in some areas, and the opportunities for abuse increase as the number and variety of services continue to expand.

MIFARE is an ideal platform

NXP’s MIFARE, which is already the world’s leading contactless development platform for SmartCards, is a compelling choice for car-sharing applications. Not only does MIFARE deliver the right level of security, by supporting the most advanced security functions available today (such as open-standard cryptography, DES and AES-128 security, and high-level Common Criteria certifications), but MIFARE also offers the broadest compatibility with the existing SmartCard infrastructure. MIFARE-based SmartCards are used in more than 650 cities worldwide, and in more than 77 percent of all automatic fare-collection (AFC) schemes.

Car-sharing systems that use MIFARE-based SmartCards as part of their service are better equipped to protect sensitive personal data like PIN codes and member credentials and, at the same time, are more likely to be compatible with existing SmartCard infrastructures. In Germany, for example, members of the Car2Go service can access cars using various government-issued SmartCards equipped with MIFARE-based ICs, including a passport, an ID card, or a driver’s license.

For companies looking to enter the car-sharing market, the NXP MIFARE portfolio presents a solid starting point for development. NXP’s current portfolio includes all the building blocks for complete MIFARE applications – from cards to readers – and is backed by software tools and development kits that help designers create flexible MIFARE-based systems that deliver exceptional user experiences.

Sharing is for more than cars

The concept of short-term rentals, which is at the heart of car-sharing services, is part of a larger phenomenon called the sharing economy. The sharing economy includes services similar to the ones described in this article – organizations that offer as-needed access to bicycles, meeting spaces, or other commodities – but it also includes what are referred to as peer-to-peer rentals, which involve private individuals renting to other private individuals. The peer-to-peer segment applies to just about anything you might own and make available to someone else when you’re not using it – from a spare bedroom to a handheld drill or even a designer ball-gown. The sharing economy has, to a certain degree, existed for as long as people have owned things, but today’s mobile Internet-based services, which make it so much easier for people to find and reserve what they want, has made the sharing economy an accelerating global trend. Car sharing is just one example.

Conclusion

The growing number of car-sharing programs around the world is making it clear that drivers don’t need to own a car to be mobile. Throughout the sharing economy, the Internet provides the access point for making reservations and paying for usage. This means that sharing services need to be both intuitive and secure to use. NXP’s MIFARE technology, which is already the leading platform for contactless SmartCards in several markets, can provide the functionality and protection required by the short-term rental programs that are part of the sharing economy.

Christian Lackner
Christian Lackner
Christian, Business Segment Manager Smart Mobility, is responsible for NXP’s activities in creating solutions for cities to become greener and smarter places to live, facilitating efficient and safe mobility. Christian has a lot of experience in directing product solutions for new co-operations between banks, governments, players in mobile and the vast number of service providers in the MIFARE® ecosystem. When Christian joined NXP Semiconductors in 2000 as a software engineer, he was significantly involved in the creation of a new smart card generation with a flexible file and access management system. In 2006, Christian accepted the role of a software department manager leading a team of engineers developing software solutions for smart cards in the area of banking, eGovernment and Automated Fare Collection. In addition, he is also NXP’s board member within the MIFARE4Mobile® industry group (http://mifare4mobile.org) and was appointed as chairman in 2013.

2 Comments

  1. Avatar car service says:

    I have noticed that many cars are now not owned. Leasing seems like a great idea for many nowadays.

  2. Avatar Aron Alma says:

    A winning and exclusive blog conveying info about car sharing. Thanks for such an insightful debate and candidly I enjoyed reading as it cleared my speculations regarding car rentals. Your points of arguments are great and acceptable but my concept is someway different. I personally own a car and I am satisfied with it. I am completely in for with car sharing and owning. Though you have mention the benefits of car renting but there are certain disadvantages also. They are: if you have to go out for few hours then it is not possible to rent a car, here it is your private car which will come in handy. Another is, in vacation & holiday seasons you may not get your desired vehicle due to limitations.

    Now coming to car sharing which is not a new concept & now growing exponentially in the market if it starts dominating the market then the sustainability of car owning will come to an end. Zipcar is the biggest car sharing and dominates the market. But compared to car ownership, the biggest advantages of car sharing is that it saves money and a greener form of transportation.

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