Car Sharing for Businesses: Save Money and Go Green

This article is a reprint of Wise Bread's contribution to OPEN Forum from American Express -- where small business owners can get advice from experts and share tips with each other.

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Car sharing is taking off among individuals in urban centers who need a car but prefer not to own one. This trend is also gaining popularity with businesses, which use car sharing services to replace their in-house fleet, or to provide workplace and employee-use vehicles that are otherwise unaffordable. Commercial car sharing can even increase workplace productivity, save money, and of course — help the environment.

History

Although the commercial car sharing industry is just getting legs in North America, it is already commonplace in Europe. In Germany, for example, approximately 23% of the car sharing pie is made up of businesses. It is noteworthy that Europe has embraced car sharing as it has; space and fuel constraints have in large part necessitated this shift, which has more benefits than drawbacks.

Commercial Car Sharing: The Basics

1. Most commercial car sharing services entail a sign-up or enrollment fee, plus a small monthly amount. Some car sharing services levy the enrollment fee for each driver on the company plan (eg: $25), but usually only to a maximum amount (e.g., $250). On enrollment, drivers are sent a membership card with a chip in it (in some cases, all you need is an iPhone).
2. You (or your enrolled employees) reserve cars by phone, internet, or SMS, 24 hours a day. You can reserve with as little as five minutes notice, or up to a year in advance. You are notified of where the closest (appropriate) car is parked for you to pick up. Your membership card (or iPhone) unlocks the car, and the ignition key is inside. (You usually need both the key and the membership card to start the car).
3. When you are finished, you return the car to the same parking spot at a designated time. If the gas gauge falls below the quarter line, top it up using the fuel card that comes with the car.
4. Per-use fees involve a combination of an hourly rate (approximately $5-10/hour) and a per-mile charge (approximately 25-45cents per mile, beyond a certain allotment of free miles). Most businesses opt to receive monthly invoices, which show itemized use and related costs. And the best part has been saved for last: all fees include the cost of insurance, gas, and maintenance.

Why Car Sharing is Great for Business

1. Paying for, insuring, parking, and maintaining a fleet of company vehicles can be cost prohibitive and even wasteful of financial resources, especially if the fleet is underused.
2. Peak period? No problem: just reserve more cars!
3. Car sharing is great for getting to offsite meetings, company retreats, or conferences.
4. Specialty vehicles are available for specific jobs such as moving, accommodating large objects for a presentation, or even showing up to a high-end meeting in a flashy car.
5. If you are used to renting vehicles when you need them, you're also used to limited hours of operation and charges for additional days if you can't return the car before they close. With car sharing, you can pick up and return the vehicle at any time of day or night.
6. With itemized monthly bills, you avoid the hassle of reimbursing employees for travel expenses, or doling out car allowances.
7. As both a tax-free employee benefit and workplace productivity feature, cars can be made available to employees for daytime medical appointments and such. In getting the use of company wheels, the employee will likely miss less work-time than if they had to make their own way.

How Commercial Car Sharing is Great for the Environment

1. Selecting and maintaining a fleet of company vehicles is cost-prohibitive, and might encourage vehicle use when you normally wouldn't drive (since you are paying for the vehicle, you figure you may as well use it). By paying hourly and ordering cars for task-driven errands, overall company vehicle use is reduced. This of course, not only has environmental benefits, but financial benefits as well.
2. Depending on the location of your business and employees in relation to it, commercial car sharing could be an impetus for increased carpooling; if employees are getting a free commute to work, they may be more willing to carpool!
3. Commercial and individual car sharing trends complement each other nicely; most businesses require cars during business hours, whereas most individuals need a car after-hours and on weekends. This combination puts more users in fewer shared cars, thereby reducing the per-person carbon footprint dramatically.
4. Every car is shared between 15-20 people, which take a proportionate number of cars off the road. Multiply this number by the thousands of cars made available by car share programs, and the net reduction of cars on the road is significant.
5. Some car sharing companies are trying to make an even bigger difference by incorporating electric and hybrid cars into their fleet. For example,America's first all-electric car sharing program was released in 2009 in Baltimore.

Rules for the Road

1. Drivers will have to be at least 21-25 years old (depending on the car sharing company) with a clean driving record.
2. Cars aren't cleaned between uses, so bear this in mind when getting into — and out of — the car each time. Pets are to be kept in carriers.
3. One way trips are discouraged, and entail heavy penalty fees in many cases.
4. Although shared cars are parked throughout the city, they can't be everywhere. You may have to hike a bit to get to (or from) the shared cars.
5. Don't be late! The penalty for returning a car late can be steep, and understandably so: another user could be waiting on you. Err on the side of caution when reserving the car, and call the car share company if you are running late to see if you can extend your window of time.

Many (if not most) car sharing companies have jumped on the business bandwagon and offer commercial car sharing packages and programs. To find a car sharing program in your city, check out carsharing.net (a free resource on the car share industry).