By Roshan Gowri D, Senior Research Analyst – Europe, Automotive & Transportation at Frost & Sullivan
Research indicates that around the world existing infrastructure (roads and parking spaces) will not be able to cope with the increasing vehicle population on the roads at an annual growth rate of 4.1 percent. This adds woes to the environmental issues such as the effect of global warming due to CO2 emissions from vehicles, increasing pollution levels such as CO and NoX emissions and traffic congestions. Although various initiatives have been proposed and legislations being mandated to control CO2 emissions and pollutants such as congestion charging in the European Countries, increasing the taxation on cars, one of the easiest and simplest solutions is to reduce the vehicle population. Car sharing and car pooling are two such initiatives that are widely being advocated in countries across the world from US, Europe, India etc that decrease the number of vehicles on road, easing congestion and reduce emissions.
Car pooling vs Car sharing
Car pooling is the voluntary agreement among a group of individuals to use a private car to travel to the same destination at mutually convenient time. For example, dropping off or picking up children from the same locality. Car sharing is a self service business model offered by private institutions that sell on-demand cars by the hour to their registered clientele when needed. By car sharing the drivers are exempted from the cost of ownership of the vehicle and need only pay for the time and/or distance of usage of the vehicle.
Increasing Vehicle Volumes resulting in Detrimental Effect on the Environment
Global vehicle production volumes is increasing at an average annual growth rate of around 3 percent and is expected to reach 92.7 million vehicles by 2015 from 72.2 million vehicles in 2008. Impact of such an increase in vehicle volumes globally necessitates an improvement in the existing infrastructure such as Roads and Parking spaces. Global vehicle volume sales are forecasted to grow at a compounded annual growth rate of 4.1 percent, thereby increasing the population of the vehicles on road leading to congestion.
Such an increase in vehicles on the road added to the ever increasing rates of congestion will result in greater emission production; further impacting global warming and pollution.
Fluctuating Oil Prices Adding Fuel to Economic Burden
Pricing of oil is fluctuating and is expected to reach 195$ per barrel by 2015, compared to the current average price of around 120$ per barrel. Average money spent per month by owning a car will drastically increase leading to economic burden upon the end consumer. By adopting carpooling the fuel cost is shared for regular driving such as dropping kids to school or travelling to work.
Benefits of Car Pooling
Various initiatives have been offered by the institutions to its employees to benefit car pooling groups such as privileged parking permits and by the government facilitating dedicated car pool lanes on highways and motorways offering quicker access to the destinations. Benefits to car pooling individuals include the sharing of fuel costs, the sharing of toll or additional road costs and the reduction of stress and tiredness by alternating driving amongst the group. Car pooling is highly beneficial in places where there is a lack of mass or public transport systems and can go some way to solving a lack of parking at places of work.
Social benefits of car pooling include a decrease in the car population on roads there by easing congestion, reduction of CO2 emissions, decreased pollution levels, the decline in the number of road accidents and it also curbs the need for new parking space and infrastructures.
Companies offering Car Sharing
Street car was launched in 2004 in UK and is one of the largest car sharing companies with a fleet of VW vehicle models mainly Golf and Polo. The members are carefully vetted with the help of the DVLA and exceptions are made on a case by case basis. Upon registration, the member is given a smart card for unlocking the car and uses a chip and pin based system to retrieve the key for the vehicle. Upon completion of the journey the system will ask for confirmation of the end of booking and generates a report on the journey. Street car also offer corporate memberships to clients for their employees and ease away the reimbursement by the mile under normal circumstances.
Zip car is a popular in the US and have recently started in the UK. There modus operandi is similar to that of Streetcar and are also expanding rapidly in the UK.
Following the success of bike sharing initiated a year ago; the city of Paris is planning to launch anew program called Autolib that offers electric cars for its tourists and Parisians late 2009 or early 2010. With increasing fuel costs, electric cars have been opted as a viable alternative for car sharing.
Glimmer of Hope
It is estimated that 60 percent of the UK population using car sharing have refrained from buying new cars. Currently in UK, approx 40,000 members are using car sharing services and are expected to reach 180,000 members by 2011. Car sharing reduces around 24 percent of average miles driven by the commuter. Car pooling alleviates congestion in urban environments; reducing the emissions and protects the environment. In an effort to save the future its time for people to share their car as well.
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