Car sharing expands: Enterprise acquires Mint Cars On Demand

Enterprise Rent-A-Car’s recent acquisition of the New York- and Boston-based Mint Cars On Demand car-sharing service is just one hint that car sharing is about to grow in a big way.

According to a press release, by the end of this year Enterprise will combine all of its car-sharing services -- WeCar by Enterprise, PhillyCarShare and Mint Cars On Demand -- under one corporate brand name: Enterprise Car Share.

But Enterprise isn’t the only player in the car-sharing game. Hertz and Avis both have car-sharing units -- Hertz On Demand and Avis On Location -- that are also growing to meet the public’s need for cars that are available and affordable.

All of these companies can thank Zipcar, dubbed the “world’s leading car-sharing network” by its own description, for starting the large-scale car-sharing trend more than 10 years ago. Being the first to service the mass market, Zipcar now provides transportation when needed to about 673,000 members in the United States, Canada and the United Kingdom. By comparison, Hertz On Demand has around 130,000 members.

So what’s the big deal about car sharing and what is it anyway? In order to borrow a car from any of the companies listed above, you must first become a member of the service. Generally speaking, there is an annual fee and an application process involved in joining a car-sharing club. With Zipcar, a one-time $25 application fee is needed as well as an annual $50 fee. Car rentals cost $7 per hour during the week and $8 per hour over the weekend.

Car sharing has become popular for a variety of reasons. A key one is the economic slowdown that has hit the United States and other regions has forced many people to give up their personal cars and the insurance, fuel and monthly payment costs that go with them.

A story in Auto Rental News cited six users of car-sharing services. They explained why they chose car sharing initially and why they continued with the service. For many who live in urban areas where subways and public transportation are the norm, car sharing is the perfect way to visit out-of-town friends for an evening or transport loads of groceries or other purchases that are awkward to maneuver on a bus or a train. The service has also proven convenient for college students living on campus with no place to store a vehicle and limited budgets.

A couple of the users featured in the story worked from home and found their need for owning a car diminished. One Zipcar user living in the Seattle area and working from home a few days each week said he was nervous about losing the freedom that comes with owning a car at first, but after two years of using Zipcar, that fear disappeared. For this user, spending $100 to $125 per month for his commuting needs with Zipcar was less expensive than a car payment, insurance and paying to park (many metropolitan areas offer free parking for car sharers). There was also less stress since he never had to worry about the maintenance of the shared cars. For this driver, the fact that his wife had a car also made transportation easier on evenings and weekends when she was not at work.

If you believe the proof is the numbers, check out these facts from research firm Frost and Sullivan.

In the report, Frost and Sullivan estimates car sharing will grow from roughly 1.3 million members today to more than 4 million North American members in the next four years.

Revenue from car-sharing companies is expected to rise to $3 billion by 2016 from the $700 million the industry produces today, according to an article written by Susan J. Aluise and posted in April 2012 on investorplace.com.

Even though the expected growth is staggering, 4 million users would still only represent a minute portion of the overall population. We don’t foresee suburbanites giving up their SUVs just yet.