Is Car Sharing the Future of the Automobile Industry?

As much as the car chieftains of Detroit try to fight it, America is slowly but surely turning away from the concept of car ownership. Instead, hundreds of thousands of Americans are choosing to share their cars by the hour and by the day – especially in densely-packed urban areas, where the total cost of car ownership is incredibly high. (Ever paid for a monthly spot in a Manhattan parking garage?) If social car-sharing services like Zipcar, RelayRides and Getaround continue to generate momentum, millions of the nation’s automobiles will become part of one jointly-owned, collaboratively-shared fleet, available for use by anyone, at any time.

At the recent TechCrunch Disrupt event in New York City, Getaround wowed the audience – including a panel of notable VC judges – by delivering a concise vision of how they intend to forever change our deeply-ingrained notions of car ownership. As a result, in just one day, Getaround signed up more than 1600 cars for listing on their car-sharing service. Once you sign up for membership in Getaround (it’s free), you can start looking around for cars to share. Most cars go for around $8-$10 per hour, but you’ll pay more if you want something nicer, like a BMW or Mercedes-Benz. You can search for rentals in your neighborhood or near an address for a specific time period. Once you find a car that meets your requirements, you can arrange a key-swap with the car owner.

There’s even a key swapping technology for owners, called the CarKit, which allows renters to unlock a car via an iPhone app. Watch the TechCrunch video – it’s literally possible to point your iPhone at a vehicle parked on the street, and it unlocks without a key. Oh, and if you’re worried about the type of people who will be sharing your car, there’s a social Web solution for that as well. After someone’s used your car, you can rate them, thereby ensuring that anyone’s who’s concerned about their reputation will take care of your vehicle. It’s like on eBay, where positive ratings are the key to success as a seller. Oh, and did I mention that every user needs to have a Facebook profile, so that the company can verify your identity?

That’s part of what makes the current crop of car-sharing and car-rental companies so interesting – they are so highly-focused on making technology and mobile devices part of the car-sharing decision. The ubiquity of mobile devices, combined with the ease of using most apps, is helping to transform the transportation experience. On one side, the traditional car manufacturers are adding technology to their vehicles to create new entertainment experienes. On the other side, the car-sharing services are adding technology to their vehicles to create new transportation experiences. Either way, technology is at the forefront.

The whole P2P car-sharing experience is not a uniquely American phenomenon – there are also car-sharing services in Australia, German, the UK and France – which gives greater credence to the notion that car-sharing has legs. This is about more than just a temporary reaction to an economic downturn or an upswelling in enthusiasm for green technology solutions.

Consider for a moment Getaround’s claim that the typical car is idle for 92% of its existence. (Just a simple back-of-the-envelope shows this makes sense, assuming a baseline of 2 hours commuting time out of a 24-hour day). When you start to think of cars in this way, it’s clear that you pass by tens, or even hundreds, of idle cars each day, on any city block. What would be the impact on traffic congestion and the environment, if we decide that each of us no longer needs to be an individual car owner?