Curb Auto Expenses with Car-Sharing Services
Vehicles-on-demand are gaining as a popular option for business driving.
For nearly 20 years, Europeans who needed a car occasionally but didn’t want the expense or hassle of ownership have been using car-sharing services. In recent years, numerous companies have introduced the concept to U.S. consumers. Two of the leading providers, Zipcar (www.zipcar.com) and Flexcar (www.flexcar.com), now offer vehicles in 70 cities in 15 states. More than 90,000 Americans have signed up to pick up a car, use it for an hour, a day or a week, then park it and walk away.
If you think that sounds like a great way to save on the costs of business auto use, you’re onto something. Car-sharing can be a money-saving option for businesses, especially for smaller companies that have no budget to lease or buy company cars and rental is inconvenient or pricey—or both.
Car-share businesses are working hard to court small business customers. Seattle-based Flexcar, which has grown by 75 percent in each of the past two years, has salespeople who help companies calculate "employee mobility costs" to see if car-sharing can help. Business customers now account for 30 percent to 40 percent of Flexcar's revenues.
At rival Zipcar, which has had 100 percent annual growth in the past two years, business clients account for about 15 percent of membership. "Small business owners are extremely important to Zipcar,” says Matthew Malloy, vice president of marketing at the Cambridge, Mass.-based company.
How Does Car-Sharing Work?
Both Zipcar and Flexcar offer special business services on their Web sites at http://www.zipcar.com/z2b/bizdriving/
How Much Does It Cost?
Rates vary by provider and city, but unlike leasing or renting, there are no additional charges for insurance, maintenance, 24-hour assistance or gas: When the tank is low, you use a special credit card that is stored in each automobile.
Zipcar’s Z2B plan requires a $75 account setup fee plus $25 for each driver. A Boston member, for example, pays $8.50 per hour, $51 per day (for travel between 7 a.m. and 7 p.m.) or $63 for a 24-hour period. These rates include 125 free miles per day. Fancy wheels, like a BMW 325i, command slightly higher rates. Malloy says that Zipcar added the discounted 7-to-7 option (available in all cities but New York) at the behest of small business customers.
Flexcar has a different pricing structure. Here’s a sample of its Advantage monthly plans for Seattle:
| ADVANTAGE PLAN HOURS | DAY RATE | EXTRA HOUR RATE |
| 10 | $85 | $8.50 |
| 25 | $200 | $8.00 |
| 50 | $375 | $7.50 |
| 100 | $730 | $7.30 |
Advantage Plan members can use vehicles from midnight to 6 a.m. for no additional charge, which is great for early morning meetings or running errands during off hours.
Some larger corporations like Starbucks have opted for an exclusive plan, which gives workers access to Flexcar automobiles in the office parking lot. The goal, says Cathy Garrison, manager of Transportation/Commute Programs for Starbucks, is to give employees a way to get to meetings or appointments in the area, while still encouraging them to carpool or use public transportation to commute. Flexcars make it possible to operate “without sacrificing our business mobility needs and commitment to contribute positively to the environment,” Garrison says. Exclusivity comes at a price: about $1,600 per month for a dedicated vehicle.
One of the great benefits of car-sharing is flexibility. Tofias, a Cambridge, Mass.-based accounting firm recently used Zipcar when it brought over five accountants from South Africa to help during tax season. “We were faced with the challenge of accommodating five people who needed transportation to visit various client sites at different days and times, and needed to get around town during off hours,” says Ken Hurley, scheduling manager. Zipcar was 15 percent less than standard leasing rates. Rentals or short-term leasing would have been even more expensive and complicated, after factoring in gas, parking and insurance for people with international licenses, says Managing Director Tracy Gallagher.
Other businesses are using car-sharing on a regular basis. Daragh Crowley, owner of FitMeals.com, uses Zipcars to shuttle groceries to his kitchen in Alexandria, Va., and to deliver his healthy meals every week to customers in the Washington area. He estimates that vans for his three drivers would run $1,000 a month per vehicle for financing, gas and insurance; Zipcar is just $300 for each driver. “It saves us a tremendous amount of money,” says Crowley. “As we have grown, it’s also been a perfect fit. It’s hassle-free, because there are about 25 cars located within a 10-minute walk. We can also choose from a variety of vehicles, depending on our needs that day.”
For San Diego-based DCI Engineers, it make senses to pay $5,000 annually for Flexcar’s Advantage 50 plan. Most of the firm’s nearly 20 employees commute to work using mass transit and use the Flexcars for business trips during the day. “Having access to the Flexcar service gives each of us the mobility we need to visit clients, and attend project meetings and business lunches,” says Suzanne Clemmer, who works in the business development department.
The reservation systems gathers data on individual drivers, their trip purpose, and job or client numbers, helping firms like DCI accurately charge back expenses to clients. Receiving one monthly invoice helps streamline billing and eliminates the hassle of collecting receipts and handling employee reimbursements, says Clemmer.
Clemmer says DCI employees also like the Earth-friendly aspect of the Flexcar program. Most choose the hybrid Flexcars and say they’re happy to leave their cars at home to reduce congestion, says Clemmer.
How big is car-sharing going to get? Well, here’s one sign: A Honda hybrid, nicknamed “Flexcar One,” sits in a reserved spot near the West Wing of the White House, at the ready for staff members (and perhaps even former oilman George W. Bush) to take it for a spin—on official business, of course.
Resources
To learn more about car-sharing and the 20 organizations that are now offering the service, visit CarSharing.net. The non-profit organization offers information about the car-sharing industry in North America, and a directory of service providers.
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