Monday, July 21, 2008

Letting Go - Your next car may not be yours

Recently I sat down with my 18 year old son and did some back of the napkin figuring about the actual cost of owning a car. Since he is an American Male under the age of 25 he can expect to pay at least $1200 a year for liability insurance alone. Figure it at $3 a day. Even though he is a good friend of the mechanic (me) it's hard to get by on less than $1000 per year for either car payments or maintenance costs. This figure is low, trust me, and basically involves buying a cheap car and driving it till it drops. Figure another $3 a day for these costs.

So before you put any gas in at $4 per gallon you are going to be out $42 per week in expenses. Drive only 100 miles per week at 20mpg and you have pretty much consumed a day's wages at my son's usual pay grade. Granted my insurance costs are lower but if I want a safer more modern car my costs will be the same or more. I figure a bare bones cost of 60 cents per mile. If I drive an SUV or carry comprehensive insurance on a newer car it will easily be $1 a mile or more to drive only 5000 miles a year!

My feeling is that people usually take these large fixed costs for insurance and maintenance for granted. The convenience of having a car available on demand is worth a lot to them. But what if you really could live without a car most of the time? If you make a couple of shopping trips a week for things too big to fit on your bike or the bus, what would you be willing to pay for a car on demand?

Last fall I was in Seattle where one of the many public transportation programs available was FlexCar now ZipCar. In strategic locations throughout the city were dedicated parking spots for on demand rental cars and trucks of all sorts. After subscribing to the service you could open the vehicle of your choice with a smart card passed over a reader inside the car. The car would open and give you access to the key. From there you could drive the car anywhere you wanted for $10 an hour. The price includes gasoline and insurance. As a university town Boulder is ideal for such a service. I have linked to ZipCar near Ohio State University for the curious.

The beauty of the system is that you have a choice of many vehicles. Need a minivan for visiting relatives arriving at the airport or a pickup for a building project? You can get one when you need it and drive a Civic Hybrid for other tasks.Think of several strategic locations around town. Perhaps a dozen cars in each Park and Ride location and city parking garage sitting in always available parking places.For the same cost as the cheapest car you could have this fleet available to you 6 hours a week! Boulder CarShare operates a service right now at a similar cost.

I find thinking of a "transportation budget" a rather liberating concept. To truly wean driver's from the personal car we have to move toward some sort of always available on demand alternative. ZipCar still has some drawbacks. You have to get from where you are to where the car is and return the car to the starting point when you are done. The cost of your time to deal with these barriers is going to be the real cost of owning a private car. A door to door service available on demand would be better for many people. Think of it as a taxi that you can get on five minutes notice that programs itself on the fly so you are always sharing the fare with others. A cell phone with text messaging and GPS capability should be enough to make this dream a reality. More on this later.

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