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Tech, profits drive 'car sharing'

By James Snodgrass for CNN
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LONDON, England (CNN) -- The car sharing concept, once a feature of liberal housing developments and small cooperatives, has become a mainstream proposition. In urban areas, where parking is at a premium, many motorists are abandoning car ownership for the freedom of pay-as-you-use motoring.

The growth in car sharing (or 'car clubs') is the result of two factors: technology (advances in key management and vehicle tracking); And the arrival of for-profit enterprises in the sector.

Underpinning the first factor is SMS. SMS is the technology used by cell phones to send text messages.

Car sharing vehicles have an on-board phone. When a booking is made, an SMS message is sent to the car with the details of the booking. Behind the windscreen is a card reader. It is programmed to wait for a signal from a magnetic induction swipe card -- on which the member's details are stored. If the details on the card are those of the member who made the booking, the system opens the central locking mechanism.

The member then enters his or her PIN into a numerical console on the dash or in the glove compartment. This releases the car keys from a magnetic key-hold in the glove compartment, allowing the member to start the ignition and drive away.

The second factor has taken the ownership burden from the member to the corporation. Cooperative car-sharing schemes require each member to own a stake in the car. But commercial car-sharing is effectively a flexible rental system. Rather than paying for a share in a car, you pay for car usage by the hour.

The biggest player in the sector is Zipcar. Founded in Boston, MA in 1999 it has since spread through cities in the USA, Canada and now London, England.

It had become clear -- despite a keen enthusiasm and professional interest in motoring -- that owning a car was becoming more of a burden than it should be.

I had moved to Brighton, on the south coast of England, in 2003 as the owner of three cars: an ancient VW Polo for shopping and nipping about town, a slightly-younger BMW 7-series for motorway drives to see family (600-mile round-trips) or in-laws (480-mile round trips) and a Citroen DS23 Pallas for wafting about pretentiously. That's not to mention the test cars I occasionally had the pleasure of borrowing.

The lack of off-street parking, waiting list for parking permits (18 months) and scarcity of parking spaces meant that the DS and Polo were disposed of. I clung tenaciously to the BMW because I had long held the notion that car ownership gave you status.

But when the time for the MOT (the British system of testing cars for roadworthiness) approached, it was clear that it was becoming beyond economic repair. The brakes were clearly in need of replacement and the muffler had committed suicide somewhere on the M6 motorway that links England's north with its south.

With reluctance, and a heavy heart, I sold the car my father had bought for £36,000 ($58,000) for spares on eBay fetching a paltry £170.

Two car sharing providers had cars near my apartment: Whizz-Go and Streetcar. I opted for the latter on shallow criteria. Although it charged £1 per hour more than Whizz-Go, I preferred Streetcar because it has a fleet of Volkswagen Golfs. Whizz-Go offer Citroen C3s and -- despite my enthusiasm for Citroens past and the current C4 Picasso -- I simply don't like the C3. I'm fussy like that.

Booking cars is simple. You either call Streetcar to check availability or look on the Web site. I have only ever booked over the web, because the site remembers your location so you can view the availability of cars as soon as you log on. Then it's simply a matter of picking a start time and a return time.

The booking information is then sent by SMS to your own phone and to the car.

Already my savings have been vast. Insurance on my BMW 7-series was around £350 ($700) per annum. In my first month, with only a couple of necessary supermarket trips, I spent less renting a Streetcar than I would normally have spent on insurance.

The £4.95 hourly charge includes fuel up to a daily limit of 35 miles, with a fuel surcharge of £0.19 ($0.38) per mile thereafter. This is charged monthly. You don't actually pay for fuel from your own pocket. Should the tank be running low, you simply pull into a gas station, fill up, and pay with the prepayment card in the Streetcar's console.

Since joining in February I have found not owning a car isn't so bad. Occasionally, the cars at my nearest location have been booked up but, to date, I've always managed to get a car when I wanted one -- even if it meant walking 20 minutes to a different location.

Streetcar tries to encourage a community spirit among its members, offering a free hour's rental to members who take the cars through a car wash (paid with the prepayment card, naturally). But the interiors can get a little grubby. That's about my only gripe.

I learned early on how easy it is to underestimate how long I would need a car for -- I spend far longer in supermarkets than I imagined. Fortunately it's fairly easy to extend a booking if there isn't another member waiting for a booking immediately afterwards. If you're in the car and think you're going to be a bit late, you simply press a button to speak with one of the team over the hands-free cell phone.

To date I have saved a considerable amount over car ownership. But I don't drive that many private miles in a year. I have recently booked a Streetcar for three days, to drive up to see relatives. The cost, including fuel, will be approximately £250 ($500) -- nearly twice the cost of three day's rental of an equivalent car from a traditional car rental operation. But, of course, the traditional car rental firm's fee doesn't include fuel.

In the end, I decided to go with the Streetcar. Perhaps old habits die hard, but I'm becoming so familiar with Florence and Frederick (the cars that live nearest to me) that I feel a sense of ownership. Why rent somebody else's car when I can hire my own?


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The Streetcars are unlocked by waving a smart card over the car's card reader

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