As much convenience personal four-wheelers give in the daily-life for transport, the future might frown at you for being naïve enough to own one of them now. Especially considering the following factors.
It is twice the trouble on the road. Meaning, a fleet of four-wheelers are bound to welcome emission and traffic pollution. And while environmental concerns are in its place, owning a four-wheeler might also set you back by more capital than you asked for.
Let’s take Australia’s case for example. The household cost of operating a car in the cities rake in hundreds and thousands of dollars. In Sydney, it is $419 per week, a total of $21,788 per year, which is the highest cost among the Australian cities. The lowest cost is in Melbourne with $271 per week and $14,092 per year. Though the figure includes the cost of the vehicle, its maintenance, insurance, and fuel spread over 10 years – the average lifetime of a car as recorded in Australia – this figure could still have been better.
Adding to that equation is the cost of owning car space. With the purchase of cars and the added cost that it is likely to incur, it is estimated that a car owner in big cities in Australia can save up to $30,000-$50,000 a year in the charges for car space and the 5% mortgage for it. One can easily invest in the stocks or get residency in Australia with that amount!
Hence, alternatives have arisen.
Australians are quickly driving towards adopting car sharing as their main means of mobility. The market is concentrated especially in states like New South Wales, Victoria, and Queensland, together these are responsible for more than 80 percent of the car sharing market in Australia.
Car sharing services have already proven to be beneficial in reducing traffic congestion, pollution, road accidents, and other management fees. Users and mostly the community can save tons of money from it. It is estimated that a car sharing vehicle represents $48,000 to $58,000 in value to the community, particularly in Sydney. This figure rises up to millions all over Australia. The market has been forecasted to rise at a CAGR of over 20% by 2025, meaning lucrative revenue for car-sharing.
Companies like GoGet, GreenShareCar, and Hertz have the upper hand as they occupy close to half of the market. They have even introduced attractive membership offers to lure the clients. GoGet has a model called GoFrequent, which allows more than four trips per month for up to 3 drivers at $6.35 per hour. Even Flexicar has a membership model called intro, light, moderate, and regular with price ranging from $13.50/hour to $8.95/hour.
Perhaps the most compelling argument in favor of car sharing is the effect of congestion on the Australian roads and the subsequent results. It is reported that in 2016, Australian economy took a hit of $16 billion because of congestion and this figure is likely to treble to $53 billion by 2031. This seems like an unnecessary price to pay for an issue where companies are actively coming up with a solution.
Government’s drive to promote a better intra-city public transportation will surely play its part for the users’ to pick up alternative sources rather than owning a car. But perhaps car sharing, with its growing advantages and popularity, is the ultimate long-term solution that might just please everyone and earn millions of dollars for everyone.
Sachi Mulmi is a researcher with Frost & Sullivan. She can be reached at email@example.com
Sapan Agarwal drives content and marketing for Frost & Sullivan. Sapan is based out of Kuala Lumpur Malaysia and can be reached at firstname.lastname@example.org | +603 6204 5830