Car Insurance Car

A (hopefully) low-profile bill is passing through the New Jersey legislature that would exempt carsharing from the $5 per trip rental car tax, according to the Associated Press.

The measure is sponsored by Ruben Ramos Jr., D-Hoboken, and will certainly help that city's Corner Cars program (operated by Connect by Hertz), as well as Zipcar members in the Garden State.

The idea of taxing carsharing like a rental car transaction doesn't go away because:

• Many people still don't "get" carsharing and continue to see it as some sort of "hourly car rental"
• Governments are hurting for revenues and this look like an easy and fair (if you don't understand what carsharing is) way to increase revenues

To most of us exempting carsharing from rental car taxes is a no brainer.  In most places, rental car taxes are dedicated to tourism and convention promotion, but carsharing is primarily a mobility option for local residents.  So, on the most fundamental level, why would you tax something you want more of?  Yet, it's an issue that doesn't seem to go away and one that is probably going to have to be resolved on a state by state and possibly even, city by city basis.

New Jersey isn't the first place to struggle with this issue: Flexcar in Washington State also faced the issue a couple of years ago.  The state decided that some longer trips made in carsharing vehicles looked an awful lot like car rental trips and not like than the classic 4-5 hour around town carsharing trip.  Yes, some trips taken by carsharing may be as long as a car rental trip but, to me, if you just had to tax something, I'd base the distinction on whether the trip was they taken by people from out of the area or not (which Washington officials said was too difficult!)

Word to the wise: if your carshare isn't exempt from rental car taxes, why not?  It won't happen overnight but doesn't take that much time or effort.  Start by finding an advocate in the appropriate level of government (that the tax is levied at) to introduce legislation.  You'll have all sorts of supporters and few detractors.  Just be ready for one of the car rental giants to show up at the hearings claiming that car rental is "just like carsharing" (as they have done in Chicago) and should be entitled to the same benefit.  NOT! (until they show that they deliver the same benefits to society).

If you're wonky on the subject, the Tax Foundation posted this informed discussion about rental car taxation.  Thanks to RelayRides for Tweeting the link to this article the other day.

In light of several new innovations in shared vehicle services, I think it is useful to review what the essential elements of carsharing are.  And why I consider some services, often referred to as carsharing, are actually car rental.

The simplest description of carsharing that I can come up with is this:

• Unit pricing that includes fuel and insurance
• Unattended access to the vehicle at trip start and end

Yes, there are other characteristics of current carsharing services - membership, parking, etc. but they aren't what make carsharing distinctive.   This means that Whipcar, and now Buzzcar, don't meet a key aspect of my definition - unattended access - since both require some sort key exchange.  And for what it's worth, at the present time two current P2P start ups in the US - Getaround and Relayrides appear to have 2 classes of vehicles in the fleet - those with technology and those without.  Of course, this "unattended access" could be easily provided with a simple mechanical lockbox mounted on a wall or post near the vehicle, as a number of carsharing companies have quite successfully employed over the years.

Another innovation that's gotten some press recently is the Peugeot Mu program.  While offering a wide range of vehicle types, it, also, does not meet my definition of true carsharing since (correct me if I'm wrong someone) members have to collect the vehicle keys in person.

Why is this important?

Don't get me wrong, I think car rental serves a useful function and p2p car rental, such as Whipcar, even more so (since it uses existing vehicles more efficiently and provides a gateway into shared vehicles for die-hard "can't pry my hands off the steering wheel" car owners).

The reason I think it's important to make the distinction between carsharing and car rental is because there is a large body of research that demonstrates substantial benefits to individuals, to cities and to the environment when people join and use carsharing - fewer cars, lower VMT, etc.  I would suspect that car rental might be able to demonstrate some of these benefits, although probably to a much smaller degree, but so far these companies have not commissioned any independent studies to validate their impact.  Until the benefits of other service models are quantified, I believe it is important that cities not extend privileges, such as marketing partnership, parking benefits, etc. that have been earned by carsharing.

Ever wonder where the highest percentage of carpooling commuters is in the US?  (Hint, it's not in California or New Jersey.)  Now a new web site easily and quickly gives the answer.

As regular readers are aware I'm fascinated by the amount of useful transportation data available on the web.  In the past I've mention the excellent and customizable Housing + Transportation nationwide maps put out by the Center for Neighborhood Technology in Chicago.  

Now FindTheBest.com has put up a web site that slices through a thin section of US Census data, making it very easy to compare commute modes for US cities. 



(Click on the Find the Best title to open the web page in a separate window.)


Using data from the 2008 American Community Survey, commute mode search provides worker population, percentages for drive alone, public transportation, walking carpool, taxi/motorcycle/other. Sadly, bicycle commuting is lumped in with "other".  The site also allows users to easily filter the data in a variety of ways - not only by state, but also general city size (small, medium large) or, if you want, more precisely by specific worker population ranges.

Answer to the carpooling question: Woodburn, Oregon had the highest percentage of carpooling in the US!  Who would have guessed?

Boston-Cambridge is getting pretty crowded with carsharing companies.  With the arrival of Mint Cars on Demand, there are now 6 carsharing companies in the area.  This may be a record number for any single city - beating Berlin or Shanghai's totals.

Mint opens its Bean-town operation with 10 locations, each starting with 2 vehicles in the "classic" and "economy" rate classes.  They are in the prime North End and Cambridge area and all are off-street locations.  The signature Smart cars from Manhattan operation do not appear to have made it to the Boston fleet.  Mint reportedly has about 100 vehicles in New York City.

Mint shook up the New Yoirk carsharing market a while back with an audacious marketing campaign of $2 per hour weekday rates to attract new members.  Currently they feature 3 classes of vehicles ranging from $4.00 to $11.70 per hour and daily rates of $55 to $119 depending on vehicle, plan and day of the week.  All rates include 180 miles.

One of the ways Mint keeps rates low is that they do not automatically include full insurance coverage, but only state minimum coverage (similar to Connect By Hertz).  Mint offers additional Collision Damage Waiver coverage, either on a per trip or annual basis, for people who are not already included on a personal auto insurance policy.

Mint was founded in Oct. 2008 by Richard Ull, owner and operator of a number of NYC parking facilities.  In 2009 he was quoted in Auto Rental News as saying "“If I wasn’t in a car parking business, I wouldn’t own a car sharing business right now.”

I have to admit, I never would have guessed Mint to be the next contender at the Boston carsharing joust!  But it's is a logical choice because parking is difficult, public transportation is good and the customer demographics are favorable for carsharing.  And besides, Zipcar has been developing a pool of potential customers for over 10 years so that Mint and other carshares can draw from. It seems likely that many customers may be members of several carsharing companies in order to have goood access to the closest vehicles to their home or work.

Best of luck to all contenders.

Those premium German car companies must know something we don't!

BMW announced it was getting into the one-way carsharing business in Munich, with a fleet of 300 BMW 1-series and Minis, starting in April; followed by 500 vehicles in Berlin.  They're calling it "Premium Carsharing".

Parking will be a combination of floating, on street parking and garages within the large "Mittler Ring" area of Munich.

Drive-Now application fee will €29 (about $40 US). The charge for using vehicles is €0.29 per minute, which includes sales tax (the same rate that Daimler is charging in Hamburg). The Mini Cooper will have a maximum hourly charge of €14.90.   Drive-Now offers a special rate allowing  a customer can interrupt a trip but keep the DriveNow vehicle "on hold" at a cost of €0.10 per minute.  This addresses one of the common concerns customers worry about with one-way service.

The service, Drive-Now, will be 50-50 owned by BMW and Sixt Car Rental, with BMW providing the cars and technology and Sixt handlihng the operations.  BMW has created a new division for the service - BMWi - the i for innovation to indicate they're more than just an auto manufacturer.  BMW and Sixt say they aiming to provide service in many countries with a goal of 1 million members by 2020.

Of course, there's a app (!) to locate the closest vehicles.

• München - StattAuto München, DB Carsharing and Drive Carsharing; and 
• Berlin - Cambio, Hertz Connect, Stadtmobil, DB Carsharing, Sixti Car Club (competing with their own brand) and Greenwheels 

Presumably Daimler car2go  executives are unhappy that the field is getting more crowded - especially with more versatile 4 door vehicles at competitive rates.

(Note: this article has been signficantly updated since the original posting.  - Dave)

"The highest trump in the sector was the demographics, "says Thomas Gratz of the taxi association. "There are more old people, and are more likely than the young to rely on a taxi." Seniors become loyal clientele for taxis, which can be driven to shopping, hairdressing, opera or dialysis. "In rural areas, ambulance runs make for some entrepreneurs from 70 to 80 percent of the business," says Gratz. The biggest competitor to the taxi industry was the DRC.