Car sharing... the pros and cons Share your car with a complete stranger? Why? Its your pride and joy, AND a capital purchase only exceeded in value by your home. In years gone by the suggestion to rent out a personal car to someone unknown would be met with scoffing and a vigorous shake of the head. But times have changed, and the younger generation is embracing a business model that costs nothing in principle, but makes money out of an under-utilised asset – the personal car. Car Next Door is the latest business to offer car-sharing as an alternative to traditional car rental. Its joining a niche service industry already occupied by Flexicar, GoGet and Green Share Car. Prices are competitive and the company contributes some of its earnings to Greenfleet, which offsets the carbon emissions produced from vehicle use. Greenfleet has planted 8.5 million trees in Australia since 1997. Furthermore, carnextdoor.au claims that one car hired by a user without a car is one less car manufactured, which also helps reduce greenhouse gas emissions. All very worthy, but whats in it for the vehicle owner? For the vehicle owner, who may work in the city, leaving the car at home provides no return on the initial investment. With Car Next Door, hiring out the car earns the owner between $2000 and $10,000 a year. That would likely subsidise some, if not all, of the loan payments on a typical $20,000 small car. On the other side of the fence, the user has access to a recent model vehicle that (hopefully) is clean and has been well maintained. Depending on the duration of the rental period, hiring a Car Next Door by the hour could be cheaper than taking a traditional rental car by the day. Theres none of the awkward social interaction endured when taking taxis either (and Car Next Door for some journeys could be cheaper than taxis). Better still, a Car Next Door is unlikely to be as dog-eared and ill-favoured as many taxis on the road. As an alternative to public transport, Car Next Door is more expensive for the user – and the service is limited by drop-off and pick-up points – but then... public transport... if just the thought of that doesnt make you shudder, what are you doing reading content on a motoring website? A Car Next Door customer recently spoke with motoring.au about her experiences with the business. What Kelly* had to say was mostly positive. Straight away, I was like, wow, you can see how you can make money on here, she said. I work right here... live literally a 10-minute walk [away]. I dont want to sell my car, because every so often I need it... when I go out of Melbourne for the weekend. According to Kelly, theres no inconvenience to her, because in the event she needs the car for a particular time, she can book it for herself. Just because it seems so simple, I thought Id give it a shot. Kelly has been participating in the service for a little over a month, but her car has already been put to work, and she has no complaints so far. In fact, she said: I love it. The car, a small hatch in Kellys case, has to go through a preparation process before it can be rented to paying users. That involves some subtle stickers placed on the windows and a GPS tracker installed in the dash, plus an e-tag for tollway travel – assuming the vehicle owner doesnt already have one. The next day, Kelly received a welcome pack in the mail, with a fuel card enclosed. Each time a user refuels the vehicle its paid for on the fuel card, with Kelly paying the monthly account – a cost of providing the service offset by the revenue received. After that, the car is live. Literally... it went live on the Tuesday, I had a booking Wednesday morning. Kelly was advised of the inaugural booking by SMS, with details of the commencement and duration of the hire. By her own admission, her inner-city residence and the nature of her car (an affordable small hatch) places her and her car in high demand. For the first full week she had a booking every day – including the weekend. Its a good sized car; its not small or big, and I just think it would have been really popular... and its a 2009 model; its new, its clean, it works fine... Kellys one minor concern was that the sales process overtook the logistics of preparing the car for hire, with bookings actually made before the car was fitted with the GPS tracker. It was almost like the communications channels werent great... I got a booking – and I called and [said]: no ones taking my car until theres a tracker in it. That problem was quickly resolved, however. Apart from that, its been smooth running. Yet to see an account statement for her first month, Kelly anticipates receiving 75 per cent of the fee paid by one user who booked her car for a day – and paid Car Next Door $90 plus an additional sum based on 25 cents/km. That per kilometre rate is paid in full back to Kelly for her fuel and depreciation, which is calculated by Car Next Door, based on data compiled by VicRoads. The users are vetted by Car Next Door, and both users and clients can check up on each other on-line, but Kelly admits to mild unease about her name and residential address being listed on-line for marketing purposes. Theres an element of two-way trust involved, to an extent. Users will want to build up a good reputation with the company and its clients – if they want to continue booking cars for hire, at least. And theres some onus on the clients to provide vehicles that are fit for purpose as well. On one occasion that Kelly has met a user they established an easy rapport, and she described the experience as a real community feel. Early adopters are likely to be younger and perhaps single. Kelly encountered some real resistance from her parents, who hated it. They couldnt get their head around it... theres no way my parents would set their car up on this... whereas I feel like Gen Y are a lot more used to feeling like they have no privacy these days – with everything on-line. At present, carnextdoor.au can put users in touch with vehicle owners throughout inner suburban areas of Melbourne – but no further afield than an area bounded by Williamstown, Essendon, Watsonia, Balwyn, Caulfield North and Elwood. Its much the same in Sydney, where Car Next Door has been established longer. There, clients are concentrated in the citys inner-suburban areas, although one client is located close to Gosford. The other clients are spread across a metropolitan area from Manly to Maroubra and west to Dulwich Hill. * Not her real name
Posted on: Mon, 26 Jan 2015 12:39:36 +0000
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