Ride-sharing may have accelerated 'peak car' in Australia
The shared economy is creating a tipping point for car ownership in Australia. While Australians have had a long love affair with cars, the growing popularity of ride-sharing services indicates that "peak car" - the point where the number of privately owned and single-occupancy vehicle trips starts to decline – can't be far away. Car-sharing has become so popular in Australia that property developers are partnering with companies such as GoGet to embed car-sharing vehicles in new apartment buildings, meaning developers can reduce the number of private car-parking spaces.
It has been said that a boat is a hole in the water into which you pour money. The same could be said about a car.

The Australian Automobile Association’s 2016 transport affordability index found car ownership costs a typical two-car family in a capital city $12,000 to $18,000 each year, including purchase price, fuel, insurance, maintenance and tolls.

But what if you could get all the benefits of a car without having to buy it, maintain it, pay for its insurance and worry about parking? This is such an attractive prospect that more than 110,000 Australians have signed up to car-sharing services such as GoGet and Car Next Door.

While Australians have had a long love affair with cars (in 2016 there were nearly 14 million passenger vehicles registered), it appears the tide may be turning against ownership.

“It’s this kind of tipping point we’re at right now with Airbnb and with the whole ‘shared economy’ where people now are valuing the experience over ownership,” says James Rosenwax, market sector director of cities at Aecom and author of a recent report on car-sharing in Australia.

Rosenwax talks about the concept of “peak car” – the point at which the number of privately owned and single-occupancy vehicle trips stop increasing and start to decline. We’re not there yet, but car and ride-sharing services are a sign the tipping point isn’t too far off.

Car sharing and ride sharing are being embraced as a way to reduce congestion, pollution, greenhouse gas emissions and parking problems in cities. Aecom’s report found that a single car-share vehicle takes up to 10 private cars off the road; a fleet of 9,000 car-share vehicles could reduce Sydney’s private car ownership by around 2%. Another report found that just 100 networked cars could free up 30,000 sq metres of floor area in a building or 15,000 sq metres of kerbside space.

Car-share services are now found in most Australian capital cities, and Sydney was one of the earliest global adopters.

“At the heart of it, it’s about better connecting communities, using the technologies available to us and fostering shared demand-response services,” says Clare Gardiner-Barnes, deputy secretary of freight, strategy and planning at Transport for NSW.

Transport for NSW recently came up with a set of reforms to legalise ride sharing and bring regulation up to date for the new transportation model.

“That has provided more opportunities for all drivers along with stronger safety mechanisms, better competition and choice for customers,” Gardiner-Barnes said. “The reforms have cut more than $30m per year in red tape.”

GoGet, launched in 2003 in Sydney with just three cars and 12 founding members, was one of the first to take off in Australia.

Membership gives customers access to a network of cars parked in dedicated car-share spaces around the city, which can be booked online or via an app. You only pay for the distance driven, at a rate set by your membership level. All other costs – including insurance, petrol, tolls and maintenance – are paid for by GoGet.

“We see ourselves as part of the public transport infrastructure,” says GoGet’s chief executive, Tristan Sender. “You can commute by public transport or walking but if you need a vehicle, it really saves you a lot of money because you only pay for what you use.”

Car sharing has become so attractive that some property developers are partnering with companies like GoGet to embed car-share vehicles in new apartment complexes. This means developers can reduce the number of private car-parking spaces, or in some cases do away with them entirely.

Car Next Door follows similar principles to GoGet, but instead of providing the cars, it connects car borrowers with car owners, providing convenience for the former and income for the latter.

The scheme was launched in 2012 in Sydney, inspired by peer-to-peer car-sharing schemes in the US, says Car Next Door spokeswoman Kate Trumbull. There are now more than 28,000 borrowers and 800 cars listed, and around 1,000 trips are made each week using Car Next Door cars.

“You can effectively have your car for free or very little money by renting it out when you’re not using it,” Trumbull says.

Car owners participating in the scheme earn on average $360 per month renting their car out. Borrowers – who are carefully vetted by the company – can join for free or pay a monthly membership fee for more regular use, then pay a fixed daily price plus a per-kilometre price for the vehicle.

Trumbull says they are part of a broader transportation revolution in cities. “People can combine on-demand taxi-type services like Uber and GoCatch with on-demand drive-yourself services like ours or GoGet, because you need them for different scenarios,” she says. “There are so many ways that from your phone you can control a really wide range of transport options; the technology is better, the costs are coming down and it’s just so much more cost-effective.”

Both Car Next Door and GoGet see driverless cars as the next evolutionary step for car sharing. In Sender’s vision, an autonomous GoGet car could come to pick you up and take you to your destination, or even operate more like a taxi and collect multiple people for a trip.

Rosenwax is certainly a convert: he’s since gotten rid of his second car and is optimistic about a car-sharing future.

“Society is right now at the point where it’s going to become very normal to think about sharing whatever you possibly can,” he says. “It’s actually going to enhance your whole car experience because you’re not tied down to that one car.”