Car Sharing Might Destroy the Auto Market
NEW YORK (TheStreet) -- Car sharing has moved beyond the "phenomenon" stage and into possibly historical territoriy -- becoming slayer of the U.S. urban auto market.
Recent data from Navigant Research says the car sharing market should grow from 2.3 million consumers last year to more than 12 million by 2020, especially as more larger, deep-pocketed service companies the market.
"Car sharing offers consumers the ability to enjoy mobility without the expense and hassle of owning a car, or the need to frequently rent a vehicle from a traditional car rental agency," says Lisa Jerram, senior research analyst with Navigant. "In addition, car sharing is viewed by both public and private entities as a powerful tool to reduce urban congestion and [bring] lower emissions of greenhouse gases."
Car sharing lets non-vehicle owners rent vehicles either directly through a provider or through a peer-to-peer network for an hour for a day or for a weekend.Alix Partners, a global business advisory firm, says in a study released Wednesday that car sharing services will "have a greater impact than previously thought on the vehicle market." The study, which canvassed 1,000 customers in 10 major U.S. cities, reports that car sharing in those markets are displacing vehicle purchases at a rate of 32 to 1. That's twice as much as researchers previously thought, and it's a gap that will narrow as more car sharing vehicles hit the market. To date, car sharing services have cut about 500,000 new vehicle purchases, and that number should rise to 1.2 million by 2020, Alix says.
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