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Carsharing Reduces Car Ownership

Automobiles are useful tools in a range of circumstances. Consequently, in a high income society if the only way to gain access to one is to purchase one, many people will purchase an automobile. By the same token it should come as no surprise that car sharing services like ZipCar reduce automobile ownership.

Given the level of interest in these services from green types and urbanists, I’m left a bit puzzled by the general lack of interest in the original car sharing service — the taxicab. Cabs and Zipcars are different, but operate according to a similar logic. Owning a car is expensive, but operating a car is cheap. So when people own cars, they tend to drive them a lot. And in both the case of the cab and the Zipcar, the availability of a non-ownership method of gaining access to an automobile reduces the market demand for car ownership. By removing the near-zero marginal cost of operating a car, however, substituting cabs and Zipcars for private automobiles reduces total driving. What’s more, since cabs and Zipcars are “shared” by a large community of users they take up less space, freeing up precious urban land for non-parking uses.

Both are excellent things, and it’s great to see Zipcar succeed in many cities. But people who cheer it on should also cheer taxis on. And in particular they should support relaxing regulatory curbs on the number of taxis allowed to operate in a given place (or oppose creating such curbs in a place like DC).

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