What is neighbour to neighbour car sharing?

Neighbour to neighbour (or “Peer to Peer”) car sharing is a form of car sharing that allows car owners to convert their personal vehicles into share cars that can be rented to other drivers on a short-term basis.

How does it work?

This two-minute video provides a good overview of how Car Next Door’s neighbour to neighbour car sharing service works.

For Borrowers

From a Borrower’s perspective, neighbour to neighbour car sharing is similar to traditional car sharing.

  • Borrowers apply for membership, and are accepted subject to driving history and credit checks.
  • They sign a standard membership agreement that governs their use of the booking platform and the vehicles (including insurance).
  • Borrowers can choose from three monthly membership plans, from a fee-free membership with a $5 booking fee and higher insurance excess to a $19/month membership that offers no booking fees and a low insurance excess.
  • Borrowers look online to view details of cars, their home location and availability (see here).
  • Borrowers book the vehicle they want for their desired time, find the vehicle’s current location online or through their smartphone, access keys from a lockbox (which is attached to the vehicle and opened with an SMS code), and drive.
  • Borrowers are charged time-based fees (typically $5-7 an hour or $25-35 a day) and distance fees (33c/km).
For Owners
  • Owners apply for membership and are accepted subject to driving history and credit checks.
  • Upon joining, Owners need to change their car registration, update their greenslip, and join Car Next Door’s fleet insurance policy.
  • Owners sign the general membership agreement and an Owner Supplement. The Owner Supplement governs Owners’ responsibility to maintain their car and make it available for bookings, and deals with insurance.
  • Owners post their car on our website with a description, picture, and hourly and daily rental rate.
  • Owners maintain a schedule of availability for their car. It is available for borrowings at all times other than when they have booked it for their own use.
  • Owners receive a percentage (which varies depending on their membership option) of the total income from Borrowers’ use of their car.

How does it differ from traditional car sharing?

Neighbour to neighbour car sharing has a number of similarities with traditional car sharing (through companies like GoGet) from the point of view of technology and user experience. It also differs from traditional sharing in a number of key respects:

  • It employs vehicles that are already in the local vehicle population, rather than adding new cars. This means that it avoids the need for the manufacture of new cars or the allocation of additional parking spaces.
  • The lower upfront costs of introducing a new car to the shared fleet mean that it is economically viable in lower-density neighbourhoods than traditional car sharing, and that the rates are up to 40% cheaper.
  • Current business models of traditional car sharing hinder its scalability. Neighbour-to-neighbour models can provide more rapid and widespread uptake of car sharing.

What are the social and environmental benefits of neighbour-to-neighbour car sharing?

Neighbour-to-neighbour car sharing offers all of the social and environmental benefits of traditional car sharing, and additional benefits. For car borrowers, the impact on net vehicle kilometres travelled (“VKT”) is likely to reflect that of traditional car sharing, given the similarity of the user experience from a borrower’s perspective.

Our members have told us that they use cars when other modes of transport are unsuitable, such as to travel across the city to visit a friend in hospital at night; to transport props to a photo shoot; or to transport a business client to a meeting.

Less than 5% of trips made by our borrowers are less than 5 kilometres. This is dramatically lower than the population-wide average (according to the NSW Bureau of Transport Statistics, 80% of trips between two and five kilometres are made by car).

For car owners, we have observed that there is a reduction in VKT as owners seek to minimise their non-essential driving.

Neighbour to neighbour car sharing:

Makes more efficient use of existing vehicles, rather than requiring new vehicles

The embodied emissions of a car (that is, the emissions that were created in the process of manufacturing it) typically match or even exceed the exhaust pipe emissions over its entire lifetime (Berners-Lee, 2010). The per-kilometre emissions for a vehicle are reduced proportionately the more the vehicle is used. This means that converting vehicles that are already in the community to shared use has a dramatically lower carbon footprint than adding a new (albeit fuel-efficient) vehicle to the population.

Makes car owners more aware of the cost of driving

Making people aware of the cost of driving on a pay-per-use basis has been shown in a number of studies to deter driving. With P2P car sharing, this incentive applies to car owners as well as car borrowers. Since car owners can make money by choosing not to drive their car and instead make it available for sharing, each car trip has an equivalent ‘cost’ in lost potential income. While traditional car-share members typically live in no-car or single-car households, P2P car-share owner-members have at least one, and often two cars. This is a demographic that would not be reached by traditional car sharing.

Allows car sharing to reach more people, more rapidly

As noted above, the economics of traditional car-sharing mean that the service can only be offered in a limited number of geographic and demographic markets where high rates of usage can make the cost of buying and maintaining a shared vehicle profitable. Neighbour-to-neighbour car share operators do not bear these costs, and so can offer the service in lower-density areas. This means that car sharing could be provided in the suburbs, and not just the inner city. It also means that a fleet of 50 cars or more can be created in a few suburbs in a short time.