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Car sharing: what is it and how does it work?

July 05, 2022 by

Want to make your car work for you and make some money? Car sharing is worth considering; we explain all

Cars cost a fair bit of money to own. Between fuel or electricity costs, road tax, servicing, insurance and monthly repayments, private cars take up a significant proportion of their owners’ monthly budgets.

But what if there were a way to reduce your expenditure significantly, or even reverse the process and have your car make you money? That’s where car sharing can come in; this article will explain exactly what car sharing is, and help you work out if it’s right for you.

How does car sharing work?

There are two main types of car sharing: commercial schemes that act a little like short-term car rental, and peer-to-peer car sharing, where you allow other people to use your car, or rent other people’s cars yourself. We’ll tackle each of these individually and in detail.

Commercial car sharing schemes

Commercial car-sharing schemes are best thought of as short-term car rental, and at present they operate predominantly in urban areas. What separates them from traditional rental firms is that the vehicles are typically collected from the street rather than a dedicated car-hire branch, and rental periods are generally shorter.

Car sharing schemes give you access to a car when you need one, without all the costs implicit in private car ownership.

The best-known and largest commercial car-share firm in the UK is Zipcar, which operates in Bristol, Cambridge, London and Oxford, and allows you to rent cars and vans by the minute, hour or day.

Enterprise Car Club is another example of a sharing company, and is run by the established car-hire firm, but allows you to rent by the hour or day. Many Car Club vehicles are picked up from the street as with Zipcar, but some are collected from Enterprise rental offices.

Zipcar operates in fewer locations but has a high concentration of vehicles in the towns in which it operates. If you live in one of these locations, you could rent a Zipcar for everything from going on a weekend away, to making your weekly supermarket shop.

The Volkswagen Polo is one of the more popular cars available via Zipcar – though not perhaps the GTI model pictured

Enterprise Car Club operates in a great deal more locations, but its vehicles are not so concentrated in some of them – IE if you’re in one of the cities where Zipcar operates, you’re more likely to be close to a car you can rent.

Depending on your location, lifestyle and needs, commercial car sharing is a potential alternative to car ownership, allowing you to rent a car when you need to make your weekly supermarket shop, or head off to the country for a weekend away, for example.

You’ll need to be a member of these companies to rent one of their vehicles, but fuel and insurance are included in the price. Zipcar has a limit of 60 miles per day’s rental, with a fuel card in the car allowing you to top up and pay for more if you need it.

Peer-to-peer car sharing schemes

As well as saving money over a traditional car-hire firm, peer-to-peer car sharing can even make you money as well.

There are two types of peer-to-peer car sharing: schemes that let you ‘pool’ by linking people with drivers undertaking similar journeys to the one you want to make, and schemes that let you rent other people’s cars yourself – or let you rent your own car out to other people.

Peer-to-peer share: pooling

Almost all of us have car pooled at some point on an informal basis: getting a lift to work with a colleague who lives nearby or commutes close to your house is technically car pooling, as is having the parent of a friend of your child take them to school.

Commercial car pooling simply formalises this approach, allowing you to link up with people undertaking journeys similar to the one you wish to make, for far less money than a train or rental car would cost.

If you want to use a car-pool firm, you may need either a bit of luck or a fair degree of flexibility in terms of when you’ll be travelling, as well as your precise pick-up and drop-off locations, as there’s a degree of chance when it comes to whether people are going where you’re going, at the time you want to go there.

Liftshare and BlaBlaCar are two examples of car-pool firms operating in the UK.

Peer-to-peer share: rental

In principle, peer-to-peer car sharing is simple: private individuals rent their cars out to other private individuals, with a company linking the two parties up.

If you are renting a car, you do so in a manner similar to that in which you would rent a car from a car-sharing firm: set the location you want to rent the car from, look for cars in this area that meet your needs in terms of size, availability and budget, and book a rental.

Renting a car this way tends to be cheaper than using a traditional car-hire firm, while the types of vehicles available to rent tends to be wider.

Turo is one of the most established companies in this space, and you can either rent a car using the service, or rent your own car out.

Turo says its hosts make an average of £442 a month renting their cars, with owners able to set their own rental price or use the firm’s recommended pricing. Hosts keep roughly 65-75% of the car’s rental price, while the firm offers a training module to help them keep their car clean.

Everything from superminis to supercars are available via peer-to-peer rental firms

Insurance for peer-to-peer car sharing varies from firm to firm, though most companies will offer the option of purchasing cover when you rent. Mileage limits will also vary from car to car, while some high-end models may require an additional security deposit.

Plus bear in mind you may need to be verified before you can rent or rent out a car using peer-to-peer sharing, so don’t try it for the first time on a last-minute basis.

What car sharing schemes are there in the UK?

Car sharing has been facilitated by the rise of the smartphone, so a lot of firms operating in this space are relatively new – although some of the more established players are getting in on the act as wel.

If you live in one of the cities it operates in, Zipcar is pretty likely to have a car nearby you can rent; those in other areas should consider Enterprise Car Club.

If it’s peer-to-peer rental or renting that you’re interested in, in addition to Turo you could look at Karshare and Hiyacar, which work in a similar way

How much does car sharing cost?

This varies enormously depending on what type of car sharing you’re after, what type of car you need, where you’re based, and how long you want to use the service in question. All prices are indicative, exclude insurance, fuel and extras where these are required, and were correct as of July 2022.

If you want to car pool and need to go from London to Birmingham, you could do this for around £12.50 by catching a lift with someone using BlaBlaCar – though you may need to be flexible about when you travel.

Want to get from London to Birmingham for as little as £12.50? Car pooling could be for you

Commercial car sharing schemes have varying membership requirements. Zipcar needs 48 hours to process an application so it can conduct checks such as your eligibility to drive – something to factor in if you need a car quickly. You can choose from free or paid-for membership, the latter of which costs either £6 or £15 a month, and brings reduced hourly and daily rental rates.

Enterprise Car Club costs either £7 or £20 a month (or £60 a year), with rental rates varying depending on which you choose.

Zipcar charges as little as £3.50 an hour or £38 a day to hire a car, though renting a Volkswagen Polo in North London typically comes in at around £0.35 pence per minute, £16 an hour, or £125 a day. You can also select what kind of vehicle you want, so if it’s an electric van you need, you can filter for this.

If you’re after a cheap, small runabout and fancy trying peer-to-peer rental, you could hire a 2012 Ford Ka for £29 a day in North London via Turo. If you’re after something a little fancier, a Turo user is offering their 2014 Porsche 911 from £276 a day.

Is car sharing right for me?

Life is nothing if not varied, as are the different types of car sharing schemes – so whether any of the schemes listed above will be right for you depends entirely on your needs, preferences and circumstances.

Anyone wanting to car pool, for example, will have to be comfortable with the idea of sharing a car with a stranger – although pool firms do conduct identity checks.

Those wishing to rent their own car out with peer-to-peer sharing will need to be happy with the idea of a stranger using their car, and the implicit risks that brings, while also being able to facilitate vehicle cleaning sessions and handovers.

And if you’re wondering whether you can live with simply renting a car on a short-term basis as and when you need it, the best advice is to try before you you commit to this model. The beauty of car clubs and car sharing firms is that they allow you to dip in and out of them on a monthly basis, so if you’re thinking you might get rid of your car entirely, see how you get on for a month using only rental firms before selling your car.