What? (is this blog all about?!!) As the costs associated with owning a car including initial cost, depreciation,insurance, fuel, repair and parking expenses amplify at a steady rate every year, sharing cars has become the new trend and a winning option. Car-share services like the Autoshare and Zipcar have grown rapidly in the past four years, with about 20,000 members to their credit. The article alludes to Matthew Baggetta, an English student at the York University, who like other urban-dwellers, does not want to be caught up with the hassles, as he puts it, of owning a vehicle. An online reservation is all they have to do to pick up an Autoshare car from the neighbourhood, and pay an hourly fee for its use. Since they do not have to pay for maintenance, fuel, insurance or parking, many Torontonians find this service very profitable. Autoshare only has a branch in Toronto and deals with around 10000 members out of which a quarter was added in 2009. They own 210 cars of 13 different models ranging between Minivans, Minicoopers, and Hybrids. The hourly fee ranges from $5.50 to $9.75 which includes the gas and insurance bill, and varies sometimes depending on the type of plan the members have. Additionally, they charge only $1/hour if cars are borrowed from midnight to dawn. Students like Baggetta who work late hours find this deal very advantageous, which is demonstrated by his usage of the term: "its dirt cheap." By sharing cars, hundreds to thousands of dollars are saved in a year as compared to owning a car. As quoted by John Williams, a spokesman for the car-share giant Zipshare, the present generation has grown up Internet shopping, and paying in installments, so they can easily identify with the whole car-share concept.
Why/How? (is it such a big deal......and how is it connected to ECONOMICS?!!!)
The article, Sharing the Road discusses about a very important ECONOMIC occurence because it has been predicted that between now and 2016, the number of car-share memberships will skyrocket to 4.4 million. According to David Zhao, an automotive research analyst, each shared vehicle replaced 15 personally owned cars in 2009. He envisions this as a major wake-up call for automakers, as the increasing population of shared cars will have a serious impact on the car market. A few other reasons cited by Kevin McLaughlin, the founder of Autoshare, for cars becoming less of a priority now, include the improvement of public transit, and the reliance of young people on iPhones and other technologies to connect and socialize. Owning cars these days is not as big a deal as it was 10 to 20 years ago, when it was a symbol of status and defined one's identity in his/her social circle. The growing fleet network plays a crucial role in making it more convenient to sign out, which in turn helps attract more customers. The popularity of the services is such that investors and developers attracted to car-sharing are keenly seeking partnerships with municipalities. Two dozen car-share parking spots split between Autoshare and Zipcar have been approved, which has made it easier to park cars. This project was initiated to control the confusion caused by parking in Downtown, and to reduce congestion. Moreover, car-sharing helps reduce pollution and green-house emissions because people do not use it as often as they would use a car that they own. This is because when a car is already paid for in full, they take undue advant
age of it, and hop into it even if they just need to walk a few blocks to get to their destination. However, paying by the hour, forces people to be cautious, evaluate the price involved, and the use to which the car is put before they make their decisions. Faced with this new competitor, car manufacturers and rental agencies have started developing new marketing strategies to stay on guard. Car companies like Hertz and Daimler have started offering their own car-sharing services with hourly rates, and it is believed that BMW and Fiat will be next in line.
Positive Statements (If......Then!!!)(Student Hat on!!!)
age of it, and hop into it even if they just need to walk a few blocks to get to their destination. However, paying by the hour, forces people to be cautious, evaluate the price involved, and the use to which the car is put before they make their decisions. Faced with this new competitor, car manufacturers and rental agencies have started developing new marketing strategies to stay on guard. Car companies like Hertz and Daimler have started offering their own car-sharing services with hourly rates, and it is believed that BMW and Fiat will be next in line.
IF the residents of Toronto continue to share cars using Autoshare and Zipcar for their transportation needs, THEN the demand for automobiles sold in the market would decrease and although it will be a long and drawn-out process, companies like Ford, Toyota, Honda etc., would eventually suffer a loss.
Well, if you think about it from a different standpoint........
IF individuals stop buying cars from the market, and only use car-sharing, THEN all the cars would be bought by Autoshare and Zipcar, and therefore the total number of cars bought will remain the same or become higher as the purchasing power of Autoshare and Zipcar is more than any ordinary individual.
IF car-sharing becomes the norm, THEN individuals do not have to pay abnormal or penalty parking fees for short durations (during event times, some parking lots charge a flat rate of $24 just for a duration as less as 20 minutes). This is because Zipcar and Autoshare negotiate monthly rates with parking lots.
Normative Statements (What should happen?!!! Economist hat on!)
Zipcar and Autoshare SHOULD be extended to pick-up trucks, cube vans, etc., for moving large goods around like furniture, and also to be used by large groups for road trips.
Car-sharing SHOULD be promoted in suburbs like Mississauga and Brampton rather than in Downtown Toronto.
Super Eco-Freak's Best Call=)
The second normative statement about the promoting of car-sharing in suburbs is my best call because many public transportation services like the Toronto Transit, Subway, GO Transit and the Tram, are available in Downtown as compared to the suburbs where only the city transit (which is very expensive!!!!) can be used. If car-sharing increases at a steady rate in Downtown, the other public transportation services will be wasted, and might have a negative impact on employment levels as the people working for the transportation network would have to be laid off if their services are not required. Also, people living in Downtown do not have to go too far for shopping, or to visit a friend as compared to the suburbs where not all the facilities are close at hand and therefore stipulate the need for a car.
Please visit this link to watch a very informative video on car-sharing:)
http://www.youtube.com/watch?v=bXIHqHYUT_Q&feature=PlayList&p=90AFFD062AB2A3F5&index=0
http://www.thestar.com/business/article/768531--sharing-the-road
http://www.theautochannel.com/news/2010/01/25/463027.1-lg.jpg
http://www.scan.ncl.ac.uk/images/template%20header%20images/scan%20logo%20hat%20square%20colour.gif
http://images3.cafepress.com/product/40769453v1_225x225_Front.jpg
