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Car Sharing in Melbourne

Recently I noticed that some parking spots in the city area are reserved for car sharing. There seems to be two car sharing companies operating.

Flexicar [1] costs $50 to join, has a $10 per month membership fee (which includes one hour of driving at a value of $12), and costs $12 per hour or $80 per day to drive a car plus $0.15 per Km if you drive more than 100Km in a day. They also have pre-paid plans which bring all the guesswork and complexity of mobile phone bills to car rental. Also they give discounts to members of the City Rewards [2] program which are greater than the membership cost, so anyone who plans to join them should join City Rewards first.

To use a car you phone up or use their web site to make a reservation. Then you find the car you reserved at it’s designated location and swipe your card across the windscreen to unlock the doors (presumably it’s an RFID card). The glovebox has the key for the ignition as well as fuel cards for any fuel you use a BP, Shell, and Caltex petrol stations (presumably if you run low on petrol when not near those ones you end up paying). All you pay is the rental rate and any tolls for toll roads you use.

When someone doesn’t return the vehicle to it’s designated spot on time there are penalty rates, which may include the cost of a taxi fare for the next person who had booked it.

It seems like a really good idea that can save significant amounts of money for people who live in the central areas (the costs of maintaining and insuring a car are significant, as is the depreciation on a new car as an asset).

The competitor is Charterdrive [3] which costs $25 to join (less than Flexicar but the same once you consider the discount), the same $10 per hour for 8:30AM to 5:30PM hours, and then cheaper rates for evenings and weekends. $25 for a night (5:30PM to 8:30AM the next morning) is good value if you want to drive home from work and then return the next day (if you work late then you might expect to pay $30 or more for a single taxi ride to get home). The weekend rate of $90 for 5:30 Friday to 8:30 Monday is also quite competitive, I expect that there are many people who only use a car on the weekend who could benefit a lot from this. $90 per weekend for 40 weekends a year (some weekends you would stay home or just use public transport) is $3600, insurance, registration, and basic maintenance of a car that you would want to own would cover most of that. Charterdrive does charge $0.20 per Km though for all journeys (with a discount rate of $0.15 per Km for long journeys on some plans), as opposed to Flexicar only charging $0.15 per Km for distances in excess of 100Km per day.

Charterdrive seems to be a newer company and has a far smaller presence. But it’s business model seems a little different and the focus on renting cars for people to drive home means that some people might benefit from being members of both companies. The $0.20 per Km makes Charterdrive more expensive more expensive for most city use, and the discounts offered for Flexicar seem to make it cheaper for use during business hours.

Charterdrive states that they have a deal with Red Spot Car Rentals [4]. It is not stated on their web site if you want to use one of their cars and they are all in use, I wonder whether a Red Spot car would be provided for the same price. Flexicar however claims that they aim to have a ratio of cars to members sufficient to make such things unlikely. Maybe it would be prudent to join both organisations so that if one had no vehicles available then you could use the other? In one city car park that I often pass the Flexicar and Charterdrive parking spots are adjacent so there would be no difference in convenience in terms of which one you use.

I wonder whether they will continue getting adjacent spots. If many people join both organisations then it would be more effective if they don’t get adjacent spots to get better aggregate coverage. I think that at the moment the main challenge for both companies is to grow the popularity of the car-sharing business. I expect that the real competition for who gets the biggest slice of that business will happen in a few years time.

Update:

There is another Australian car-share company in operation named GoGet [5], interestingly I discovered their existence when I reviewed the Google advertising on this post…

GoGet has a significant presence in Sydney, a small presence in Melbourne, and is only making a start in Queensland. Their hourly rates are significantly lower than the others (as little as $4.40 per hour) but distance rates are as high as $0.35 per Km. One significant benefit is that they have plans for two or three drivers which could allow an entire family to sign up on one account. If you drive less than 20Km in an hour (which would not be uncommon in city driving) then GoGet would be cheapest.

4 comments to Car Sharing in Melbourne

  • We’ve just become members over here in London & it’s a great thing. We use the car much less often than 40/52 weekends – more for going to the fish market early in the morning & taking friends around. It may end up costing a little more for a long trip, but it’s just so convenient (we have 4 cars in our local area). Keep me posted on how it goes, we were wondering how it’d work over there with the lower population density!

  • etbe

    Helen: Things are quite a bit different in London.

    You are correct that one important factor is the number of people who live/work within walking distance of a car park. While in Melbourne there is a good population density in the CBD during business hours, apart from that the population density is generally significantly lower than London.

    Another factor is the reasons for not owning a car. In London it’s extremely difficult to get a place to park a car, and both car and insurance prices are quite unreasonable. Cars are more affordable and easier to park in Melbourne.

    Finally the quality of public transport is a significant issue. Having the choice of great London public transport and occasional use of a shared car or owning a car is easy. Having a choice of mediocre Melbourne public transport and a shared car or owning a car is not so easy.

  • Etbe – thanks for the plug!

    FYI, our ‘average’ member drives 10kms per hour – City driving – so you will always be better off with a low hourly rate rather than a high one.

    Nic from GoGet.

    P.S. I like the fact you have ‘Beard’ in your tag cloud..

  • etbe

    Nic: What you are doing is news, I’m just reporting it. Thank you for paying for the Google advertising on my blog!

    If you get a car stop near my house then I’ll sign up for GoGet.