Car-sharing is the new green way of getting around town and plenty of small businesses are getting a slice of the action. But how is this new trend cutting into the auto industry?
Surging petrol prices and growing inner-city populations are driving a rapid growth in Australia's car sharing industry. In the five years to 2012-13 industry revenue soared to $43.1 million, according to research company IBISWorld. Further data shows industry growth in the same period was an annual 25 per cent, but is expected to slow slightly to 18.7 per cent.
Car-sharing is already big business in the US and Europe, where it began in the 1990s. In fact, the popularity of car-sharing overseas has seen many motorists ditch their privately-owned car. Researchers at the University of California found one car-share vehicle replacing between six and 23 cars in the US and four and 10 cars in Europe.
Will Davies, chief executive of peer-to-peer car share company Car Next Door, says car-sharing in Australia has had little effect on the auto industry, but that's set to change.
"We're not taking business away from the car yards and the hire-car companies in any real sense yet," he says.
"But our vision is that in the next five to 10 years, Car Next Door's peer-to-peer car-sharing model will lead to many thousand fewer cars being sold and owned in Australian cities.
"We want to see a large-scale de-car-ing of our cities. If we don't change the way we think about car ownership, then the growth in population is going to leave our cities more and more car-choked."
Car Next Door, which launched in 2012, lets members borrow cars from car owners including apartment co-ops and businesses. Davies says the company's fleet has 100 cars being shared by about 1700 borrowers. The average car is shared around five times per month with top car owners earning a profit of around $6000 per year.
In five years, Car Next Door aims to have 7000 cars being lent to 110,000 to 140,000 people.
Car hire giant Hertz took a proactive step into the car sharing market in 2010 when it purchased Flexicar, one of Australia's earliest car share companies.
But Hertz car-share general manager Greg Giraud says car-sharing poses little threat to the car manufacturing or car hire industries.
"We see car-sharing as an alternative to car ownership and car hire as a product of the travel industry," he says.
The growth of the car-share industry comes at a unique time in Australia's automotive history. Major auto manufacturers Toyota, Holden and Ford will stop production in Australia between 2016 and 2017, opening the door to more imported cars from China and the US.
Rising global production costs are to blame for the closure of Australian made Toyotas, Holdens and Fords, but the closures arguably reflect a shift in attitudes towards transport.
Tristan Sender, chief executive of car-share company GoGet, says manufacturers need to embrace changing trends.
"The perception of car-only transport will probably be replaced by an understanding of the diversity of transport options at our disposal of which car-share is one dependable option," he says.
"That said, GoGet is also cultivating strong relationships with innovative car companies who see the value of car-share.
"For example, GoGet's involvement in the driverless car project with the University of NSW shows that car-share can actually pioneer how all of us will use vehicles in the future and these learnings are critical to the auto industry."
Car-share experts predict the industry won't bite traditional car hire businesses until car-sharing comes to airports, as it has in the US. But others such as motoring enthusiast and publisher of goauto.com.au John Mellor see car-sharing representing a bigger threat to the taxi industry.
"I think it's going to make the taxi industry wake up to itself in terms of the service it provides," he says.
Car-sharing is in its infancy in Australia and despite its predicted popularity, Mr Mellor says it's unlikely to grow to such a size that it could break the traditional auto industry.
"Cars still have to be bought and used, so a dealer gets to sell the car and someone still gets to service it," he says.
