Car Insurance Car

So-called peer to peer carsharing  (P2P) is one step closer to reality in California with the passage and signing into law of AB1871 introduced by Assembly member Dave Jones.  Referred to as "personal vehicle carsharing" (dare I call it PVCS?) in the California measure, signed into law by Gov. Schwarzenegger today, the law change was needed because California statute specifically prohibited private car owners from renting out their vehicles.

It's not clear how many other states have laws specifically potentially blocking personal vehicle carsharing.  My guess is that even in states where there isn't a prohibition, including some specific rules about PVCS can help minimize lawsuits.

The changes have been moved along by Spride, a California company founded by high investor Sunil Paul, and City Carshare, the non-profit carshare serving the San Francisco bay area.  Spride and City Carshare immediately released a statement praising the passage of the law and saying that vehicle owners enrolling cars in Spride will have access to City Carshare's 13,000 members when the law goes into effect January 1, 2011.  The statement says that vehicles will be outfitted with the same technology as City Carshare uses - the OpenCar telematics unit.

There have been no comments yet from the other California-based P2P carshare startup Getaround or from industry giant Zipcar.   Meanwhile on the east coast RelayRides, the first peer to peer carshare, which has been operating for over 3 months, continues to grow.  (Disclosure: I am an advisor to RelayRides.)

The bill was introduced and moved by Assembly member Dave Jones (D-Sacramento).  Jones is Democratic nominee for California Insurance Commissioner in this November’s election.  SF Streetsblog reports that Jones "worked with car insurance companies from the beginning to craft a solution amenable to them.   Jones immediately said he would enroll his own car in a P2P program - but didn't say whether it would be Spride or Getaround, another California based personal vehicle carsharing service.

The new law is mercifully short and to the point.  Basically, it:
• Defines Personal Vehicle Carsharing as "privately owned vehicles that are allowed to be used by drivers other than the owner as part of a communal pool of vehicles"
• Defines a Personal Vehicle Carsharing Company as one that operates a service and provides insurance at least 3 times the state minimum for personal auto insurance.

Staffer to Assembly member Jones report that getting the insurance industry and trial lawyers on board with the proposed changes were key to the smooth passage of the bill.

The law has a very important proviso that revenue generated can not exceed the expenses of operating the vehicle.  It outlines eligible expenses as lease or loan payments, insurance,  parking, depreciation, fuel and maintenance.

The law also prohibits personal auto insurers from canceling or not renewing a policy, or classifying the vehicle as "commercial or for-hire" vehicle because it is participating in a personal vehicle carsharing program.

I am remiss in reporting that CommunAuto, in Montreal, Canada, announced in July that they would be offering their members P2P carsharing as well.  CommunAuto proposes to take a very low-tech and low cost approach which would not involve any technology installed in vehicles. In order to participate in CommunAuto's program, vehicle owners would have buy insurance from La Capitale General.

I am working with Oregon State Senator Jackie Dingfelder to make changes in Oregon law to facilitate PVCS, as well.  Our efforts are patterned after the California approach, in order to keep things simple for carshare operators, insurance companies and vehicle owners and renters.  I appreciate the help from Seattle-based Sightline Institute.

Full text of the California law and legislative history and analysis can be found here.

(This posting has been updated 10-1-2010 to reflect new information.)

A couple of months ago I had in mind 2 "next big things" - car2go and peer to peer (p2p) carsharing.  I've held off writing about p2p in anticipation that RelayRides would go live and I could talk about it as it actually works not as a hypothetical.  (Full disclosure, I'm consulting with RelayRides.)

Since then p2p carsharing and car rental has been all over the internet — Spride, Gettaround and Go-Op in the US; Whipcar and Wombat Car Club in the UK.  For what it's worth, there's a parallel movement to peer to peer car rental going on, as well — Spagg (apparently now defunct) may have been an example, and there are similar p2p car rental companies in Germany and Australia.)

What is peer to peer carsharing?  It's traditional carsharing using privately owned vehicles temporarily made available to a carsharing company for others to drive.  Like traditional carsharing the vehicles are decentralized, they're available by the hour, and they include gas and insurance in the rates (ideally full insurance coverage, not state minimum coverage).

But first, a point of clarification: some of the services that claim to be carsharing don't actually meet what I would call the minimum requirements for calling themselves carsharing — most importantly lacking "unattended access", through a lockbox or electronic technology.  If you've got to meet the owner to exchange keys at the beginning and end of the trip I just don't see how that will provide sufficient convenience of access for drivers.

Here's why I think unattended access important: if you want to  claim to be carsharing I want to be sure it will deliver the benefits that so many of us have worked so hard to establish over the years — fewer cars on the road, fewer parked cars, VMT reductions, increased use of transit, bicycling and walking. If not, why should local governments support carsharing?   Car rental, even so-called hourly car rental, has never demonstrated these benefits.

Because of the lack of unattended access, in my mind, this excludes Whipcar as real carsharing at the present time.  Fortunately, the major players all appear to be talking about some sort of technology, so, by my definition RelayRides, Spride, Gettaround and Go-Op are bona fide peer to peer carsharing services.  (Caveat, the functionality of the technology offered by each service could be significantly different.  )

Why is peer to peer so attractive?  

Well, it's certainly a good deal for car owners, who can easily make several thousand dollars a year from their car ("Don't work for your car, make your car work for you," as Spride says.)  Need I say more?

For the carsharing member (driver or renter in p2p terms), some adjustments will be necessary — it seems likely that in most cases instead of knowing a couple of favorite vehicle locations near your home or office, you'll have to go on the internet (or ideally smart phone) to locate the cars that are available during the timer period you have in mind; and there may be a little anxiety finding the location the first time, particularly in cities.

Why now?

Until now the hangup in getting peer to peer off the ground has been insurance. The issue has been figuring out whether there's an issue (and how to resolve it, if there is) about where/when the vehicle owner's personal auto insurance policy ends and the carsharing policy begins in the event of a claim.  Apparently, the economic climate has loosed up the insurance underwriters' grips on the reins at insurance companies.  (Whatever it takes, I guess...)

Another reason may be the explosion of interest in the iPhone and smart phones in general, which I think will make finding and booking p2p vehicles much easier and more spontaneious than having to log on to a carsharing company web site at home or work.  And, no doubt, the down turn in the economy got the juices flowing with all sort of unorthodox start ups.

Finally, in this survey of peer to peer carsharing, I would be remiss not mention the unsung pioneer in the peer to peer carsharing world: a little community car club in the UK with the unlikely name of Wombat Car Club.  They figured out the insurance years ahead of anyone else and have a very generous payment plan for car owners.  Thanks for leading the way.

Vehicle Miles Traveled (VMT) reduction has been the holy grail of transportation planners and greenhouse gas reduction programs for years.  And, no wonder, for decades VMT has been growing as we continue to build streets, highways and freeways to accommodate a suburban lifestyle.  Now, it's no secret that designing and transportation "system" around a single mode - automobiles - isn't the answer.  And you wouldn't be reading this post if you didn't understand that carsharing is a way to provide "automobility" without overuse.

In February, the 9th annual New Partners for Smart Growth sponsored a conference I wish I'd atttended about the many aspects of trying to get our land use and transportation system back into "whack".  One presentation that particularly caught my attention was a very comprehensive and informative presentation about VMT by Steven Polzin of the Center for Urban Transporation Research at the University of South Florida in Tampa. (It's from the Thursday morning Navigating the VMT Curve session.)

The 37 slides in his presentation answered many of my questions about the factors affecting VMT (age location, economy) as well as some surprising trends, such as this one about VMT and automobile ownership.  Take a look at the full set.

Since land use is the key to a long-term solution of our transportation problems, I also appreciated two land use presentations about density - one with a nice overview of how planners got to suburbia with the best of intentions Retrofitting the Suburban Landscape (18 mb file) by Nir Buras of Buras Architectdure. And I found Getting to Small Footprint Density: Responding to the Market Demand for Walkable Urban Living by Daniel Parolek of Opticos Design, Inc. a helpful introduction, as well.  The main page of conference sessions is here.

BMW Mini has always had very creative marketing. And they've had to - building a small car in an age of much larger ones - and with a (more or less) one model line-up. From the early series of numbered slogans emphasizing the fun and virtues of driving a small car to a very clever Mini on a stand with a coin slot, as if it were a child's horseback ride in a supermarket. They've usually had just the right balance of humor and positioning that I admired and advocated.

Now here's another clever idea, and another one that carshares (with a bit of budget) could use to promote new vehicle locations - placing a VERY large cardboard box with the image of the vehicle on the side.  The Mini "box" is set up as if it were a present that had just been opened.

What a perfect way to announce a new carsharing vehicle location - that is, before you have a vehicle to go there!

This Mini promotion is from the Netherlands but apparently, it's taken from an earlier RATP Metro promotion in Paris.

In another optimistic projection about the future potential of carsharing, consulting firm Frost and Sullivan is predicting 4.4 million members in North America by 2016 - that's up from about 400,000 members now.

The projections are based on a summary of two Frost and Sullivan reports (N748-18) Car-sharing: a Sustainable and Innovative Personal Transport Solution with Great Potential and Huge Opportunities and (M4FA-18) Sustainable and Innovative Personal Transport Solutions – Strategic Analysis of Carsharing Market in Europe, says that carsharing membership in North America rose by 117% between 2007 and 2009 and the growth at that rate is expected to continue over the next 5 to 10 years. This leads to the estimate of 4.4 million members in North America and 5.5 million in Europe by 2016.


(It seems somewhat counterintuitive to me that Europe would have more carsharing members than the US but I haven't seen the report yet to understand the rationale.)

This report follows on Zipcar's press release from June 2009 predicting worldwide market size for carsharing at 37 million members.

Nevertheless, even if only a fraction of these gains occur, carsharing has a very bright future ahead. The marketing departments and street teams better get to work!

Thought you'd enjoy reading this informative summary of car and bikesharing info from this year's Transportation Research Board meeting in Washington, DC. It was prepared by the a staffer at TheCityFix, the website of EMBARQ – The World Resources Institute Center for Sustainable Transport.

Blogging from TRB: Carshare, Bikeshare, We All Care for Vehicle Share!

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TheCityFix is a very interesting organization working in several major world cities to promote more efficient transportation. Included on the staff is Clayton Lane, PhillyCarshare founder who is featured in this nice video about promoting LA Metro.