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Spotify did it for music. Netflix did it for films. For people in big cities, the app economy promised to do the same for cars: making a life without ownership of a couple of tonnes of metal possible.
Businesses such as Zipcar, Enterprise Car Club and Share Now offer app-based car rental by the hour, while the likes of Hiyacar, Turo and Getaround have opened up the ability to rent neighbours’ cars. During the Covid pandemic – and the easy money bubble – it seemed their time had come.
Yet there are signs the momentum is slowing. San Francisco-based Turo last month abandoned plans to float on the stock market. Getaround, based in the same city, announced it was shutting down its US car-sharing operations to focus on Europe. And the valuation of the US’s Zipcar, the world’s biggest car-sharing company, was quietly downgraded this month by its owner, Avis Budget.
This reporter’s household is one of the 42% in London without a car. The public transport network in the capital has been good enough for long enough that tiresome people who insist owning a car is pointless in London were once the butt of a joke in the zombie comedy Shaun of the Dead back in 2004.
That film was made four years after Zipcar was founded and three years before Apple’s iPhone paved the way for the mobility app revolution. Now there are enough shared cars in London to give residents several nearby options for electric cars to pop to the shops or vans for house moves.
Izzy Romilly, the sustainable transport manager for the green group Possible, has campaigned for a reduction in car use in cities, particularly by replacing shorter journeys with walking or cycling. “It can be quite daunting to give up your car,” she says, but adds that people in cities who give up car ownership experience “unexpected benefits” including better health and less stress as they walk or cycle more.
However, a bit of flexibility is sometimes needed to walk 10 minutes in the rain to pick up a vehicle. Being in a “dink” household – double income, no kids – undoubtedly helps. Colleagues with children laugh knowingly at declarations that car ownership is a thing of the past: determined car-lessness can falter when two children need to go to gymnastics on a chilly Saturday.
Cars spend about 95% of their lives sitting still, while also taking up space worth £172bn in London alone. Car sharing allows those assets to be used more efficiently, getting greater use out of every vehicle and parking space.
More efficient usage of cars would mean fewer vehicles needed overall. That would reduce the carbon emissions associated with auto manufacturing, which are set to increase as the world shifts to electric cars – although that switch will slash the much larger emissions from driving.
Efficiency also means cost savings for users. British users of car shares can save thousands of pounds compared with buying a new vehicle, according to CoMoUK, a charity focused on increasing “collaborative mobility”.
The problem has been making the services profitable. Car-sharing companies have struggled with rising costs, including for insurance and from councils, which have raised parking permit fees. “It’s quite tough out there,” says Richard Dilks, CoMoUK’s chief executive.
Yet there is still evidence that the number of people opting for car-sharing services is rising. User figures in the UK rose from 354,000 in 2019 to 873,000 last September. In France, the number of car-share journeys was 45% higher in January than the same point two years earlier, according to government figures.
“There’s loads of challenges on the supply side, but we have to balance it on the demand side,”says Dilks. “That remains strong.”
Owning a vehicle has been a rite of passage – and a staple of teen movies – in wealthy countries such as the UK and US for decades. During the pandemic, though, it appeared that the long march of car ownership had halted. The 2020-22 period bucked the trend of half a century in which the proportion of UK car-owning households rose from 52% in 1971 to 78% in 2022, according to the National Centre for Social Research. However, that trend snapped back during 2023.
Still, carmakers are looking beyond traditional vehicle ownership. The owner of Fiat and Peugeot, Stellantis, owns shared car service Free2move, while Renault has Mobilize, a unit also experimenting with car sharing and rentals.
JLR, the British manufacturer of the Jaguar and Land Rover brands, has set up two services to cater to people who want a luxury car without having to worry about going to a dealership – let alone insurance, servicing or roadside assistance cover. Rental periods range from a few hours or days under one service, The Out, to between three and 18 months with another, Pivotal.
A Range Rover, for example, costs nearly £700 for a weekend, or north of £2,000 for a month.
Jasdeep Sawhney, the managing director of InMotion Ventures, JLR’s startup investment arm, says the services exemplify the shift from the “ownership economy” to the “consumption economy” since the pandemic.
“There’s a whole cohort of younger customers – young and wealthy, of course – who don’t want to own big things in their lives,” Sawhney says. “Their lifestyles are very flexible. They travel a lot. These customers are not buying vehicles.”
The Observer tried JLR’s service, receiving an enormous – and, on London’s tight streets, sometimes awkward – Range Rover delivered to the door and picked up a few days later. The rental highlighted one of the potential pitfalls of non-ownership, when the borrowed wheels scraped on the kerb in the automated parking mode – a manoeuvre that would prove costly for a paying renter.
JLR’s motivation is emphatically not to reduce ownership: car companies want more people to buy their vehicles. JLR’s side-hustle rental services help it accrue revenues from people on average 20 years younger than the company’s usual customers. Some renters have spent hundreds of thousands of pounds on Pivotal over three years – more than enough to buy a £123,000 Range Rover outright.
Yet the enthusiastic reception for the services, which are already generating cash, suggests that people are becoming more comfortable in using cars as a service, rather than buying them as a product.
There are opportunities at the other end of the scale of non-ownership too. France’s BlaBlaCar is the champion of covoiturage, or carpooling. It has found success in France and Spain, where public transport is good from city to city but worse outside that. But it is growing fastest now in Brazil and India, poorer countries where public transport is severely lacking.
“There is a really strong case for accelerating on car sharing,” says Dilks, particularly to meet carbon reduction targets. “Car clubs are only part of the solution – but they are [still] part of it.”
