• Jess Deacon

Car sharing business models - how do they work?

Car sharing is a growing business option for many entrepreneurs around the world and there are different ways you can operate a car sharing business.

Here are the two most common ways we see them being used regularly.

Peer to Peer (P2P)

This is a popular choice for car sharing business models aiming to increase their reach and scale without the overheads of vehicle ownership.

P2P models are popular because you don’t own the cars, but you enable other car owners to lend out their on your car sharing network. You agree rates and fees with them as part of your terms and conditions and collect a percentage of each ride booked.

Sometimes this model can be tricky. The car share providers’ market can be incredibly competitive in your area, meaning promotion of your new service could become costly. As the car sharing service owner, this is a cost that you will need to cover.

There are several leading car sharing platforms offering this service in main cities. However, in smaller cities and towns there is less competition and the idea of using others’ cars in these sorts of places is a growing demand.

The key to any successful car sharing startup is to do your research and find the areas most in need of this service (where is the demand?) and with less competition. Trial your car sharing Peer to Peer business model in places like these to validate your offer. Areas good for validation would be university cities and towns and/or high density population areas where there are apartment complexes with less parking available to tenants and owners.

Business to Public - B2P

For some it makes sense to provide a fleet of vehicles for use and control all aspects of the car sharing experience.

Some B2P companies start with 10 cars and work their way up to 50-100 over time. This means they can manage the insurance, collect all fees and charges, and control the locations and types of vehicles available. They can also provide branding for the vehicles to gain a wider market presence and a virtual moving billboard.

This is particularly popular within apartment complexes, companies and retirement villages.

Ask us about the ways you can run your car sharing service. We’ve worked with many individuals and companies requiring such a product and will have a solution and advice that’s right for you.

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