My suburb is dotted with flexicars.
Pay a once-off 30 dollar joining fee, a 70 dollar annual insurance fee, and an hourly rate between 9 and 15 bucks, and you get a car. Petrol and insurance included. When you book online you get a code that pops the car doors open. The keys are on the console.
In Melbourne they are very much an inner city thing. The northenmost is in Brunswick the southernmost is in St Kilda. It’s only in these burbs that the economics of parking are so bad that sharing a car with someone else could make sense.
Except don’t say the sh-word. Flexicar emphasises the flexi. American car share companies found that many people have a negative view of the concept of sharing. “Do we call hotels ‘bed-sharing?” They also found people aren’t motivated by thinking about the environment.
In America, the flexicar concept is a big one. There, it is run by a company called Zipcar, and it is in 64 cities. There are 1300 zipcars in New York alone; hundreds in San Francisco, and even 3 in Alabama.
In contrast to the enviro-communal origins of car sharing, Zipcar now offers BMWs, and has annual revenues of over a hundred million dollars.
They want to change people’s relationships with their cars.
They are going after college kids, who can’t afford a car, and hoping they can break the traditional rite of passage of buying a car at the end of college. The graduates tend to move to the cities where zipcar is going strong. By hitting these early adopters, they hope to do what Apple has done, and make the alternative mainstream.
I read the flexicar website and loved it. The environmental benefits were amazing. I wondered ‘Why isn’t everyone into it?’ I read their page on how the the costs are so low compared to car ownership, and even better than taxis. I shook my head in disgust at the masses’ ignorance. Then I did the math again myself…
Assume a ten-year-old Toyota Corolla.
I looked up the price of a 2001 model, $5760, and the price of a 1999 model, $5130. The difference is depreciation. That’s $630 or about $315 a year. For completeness sake, let’s include foregone interest on the 5k, say another $300.
Assume a tank of petrol every 6 weeks. Nine 45-dollar tanks a year. $400 a year, or 307 litres. At 9L/100km that’s 3400km. Assume it’s mostly city driving, so an average of 30km/h, thats a hundred and ten hours, or 2 hours a week.
Assume no parking fees at home
Assume a conservative 250 bucks on services and repairs a year, because those Toyota Corollas run so smooth.
Registration is $650.
Total annual cost is $1915 a year, or $37 a week for two hours driving.
If they go on the Flexicar plan, they will spend a hundred to join (which also covers insurance). The plan that gives a hundred pre-paid dollars of driving a month has a rate of $11.25 an hour. The weekly cost will be 22.50 plus 1/52nd of the joining fee (2 dollars). $24.50 compared to $37. So there seems to be a flexicar saving of about $12.50 a week!
But. The Flexicar plan falls down because the two hours of driving aren’t all you pay for. The car has to go back to where you picked it up from.
Say the two hours of driving a week represents 3 trips of 20 minutes each way, one each to the supermarket, a soccer match, a friend’s house. With Flexicar you also pay for the time the car spends sitting at your destination (say, 30 minutes, 1.5 hours, 3 hours). The price of these 5 hours is another $56.25.
The 24.50 plus 56.25 = $80.25 a week. The cheap Corolla is looking better and better.
(Apparently though, the average person spends $239.44 a week on their car. More modestly, the RACV says that if you have a car that costs 16 grand and you drive it 15,000 km a year, it costs you $114 a week. That’s 42 kilometres every day, though.)
So Flexicar only seems to work efficiently for certain kinds of trips where you aren’t stopping long at the destination, for example, shopping trips where you know what you want, dropping things off at certain places.
It is also probably economical for people who would never dream of owning a cheap ten year old Corolla. New cars depreciate fast,- somewhere round $2000-3000 a year. Also for people considering a car loan. The rate I assumed for interest foregone was 6 percent on a term-deposit. If you borrow you’re looking at more like 15%, which on a loan of 20k would be another 60 a week.
Lastly, if you have to pay for parking at your home, then the flexicar could quickly become economical.
These exceptions to my (very reasonable) model must apply to plenty of people, because flexicar is going gangbusters. The best thing about it is that the more it grows, the better it gets. If you go to the flexicar website, you will see they have nearly a hundred cars in Melbourne, and only three in Sydney. The ‘network effects’ mean that the more flexicars there are around, the better the service they can offer. So instead of growing a little bit in each city, they’re throwing all their weight into one.
The cost structures mean the company needs to be big to make money. When Zipcar first started getting really seriously corporate, they tripled their fleet. This means that we can hope that Flexicar will not only have more cars nearby soon, but that prices will also come down.
Have you used flexicar, dear readers? Would you? Let us know your views below.