Bacon's Rebellion

Democracy Thrives in Sunlight

Zipcar to Invest $25 Million in D.C.-Area Car Sharing

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by

James A. Bacon
in

I’ve long advocated “car sharing” as one of the many small-bore solutions that, collectively enacted, can relieve traffic congestion in Virginia. (See “Step up to Flex,” May 10, 2004.)

The concept of flex cars, in which subscribers make Internet reservations to rent cars by the hour for short trips, was easy to ridicule a couple of years ago. The number of cars and subscribers in the early pilot projects seemed ludicrously small. But the idea, it appears, is taking off. People are saving big bucks and eliminating major hassles by trading in their cars and relying instead upon mass transit and car sharing. Reports Eric M. Weiss with the Washington Post:

Yesterday, one of the two major car-sharing companies that operate in the Washington region, Zipcar, announced a $25 million investment that will allow it to possibly double the 350 vehicles it already puts on area streets. In June, Zipcar’s rival, District-based Flexcar, announced a major investment by a company started by AOL co-founder Steve Case.

That could set up the Washington area — one of only two major markets where the two companies compete — as a testing ground to see just how far car sharing can go in reducing congestion, pollution and parking woes.

“Some of the highest adoption neighborhoods in the country are in D.C.,” said Scott Griffith, chief executive of Zipcar, based in Cambridge, Mass. He said that in the Dupont Circle and Capitol Hill neighborhoods, where parking can be difficult to find, more than 10 percent of residents older than 21 use the service.

Let’s hear it for the free market, baby!

There is no hope of solving Virginia’s transportation woes through government action only. The government is slow, plodding, bureaucratic and prone to political meddling. We need to open up the transportation market to more innovators like Zipcar and Flexcar. The principle extends to buses, vans, jitneys, taxies and other forms of shared ridership… and to private-sector consortia building new road and transit infrastructure… and to inventors of Intelligent Transportation System services such as those that transmit video/radar traffic data to commuters.

Sadly, most lawmakers are stuck in the mindset that transportation is a problem that only government can solve — with higher taxes. Only a handful of legislators seem interested in unleashing the potential of entrepreneurs and free markets. Maybe Zipcar’s $25 million investment will change a few minds.

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16 responses to “Zipcar to Invest $25 Million in D.C.-Area Car Sharing”

  1. Scott Avatar
    Scott

    Would love to see this in downtown Richmond, especially around VCU.

  2. James Atticus Bowden Avatar
    James Atticus Bowden

    Are there any legal or regulatory barriers to this?

  3. Larry Gross Avatar
    Larry Gross

    The current multiple innovations are proceeding at a FAST pace and is not only dynamic but there are interactions that may not be fully anticipated.

    So.. I take this opportunity to post the concept of FAIR Lanes as part of Congestion Pricing.

    “FAIR” is an acronym for “Fast and Intertwined Regular Lanes”

    FAIR lanes involve separating congested freeway lanes, using plastic pylons and striping, into two sections: Fast lanes and Regular lanes – (lcg comment – this sound pretty mickey mouse to me).
    •
    The Fast lanes would be electronically tolled, with tolls set in real time to ensure that traffic moves at the maximum allowable free-flow speed.
    •
    Users of the Regular lanes would still face congested conditions, but would be eligible to receive credits if their vehicles had electronic toll tags. The credits would be a form of compensation for giving up the right to use
    the lanes that had been converted to Fast lanes.
    •
    The credits could be used as toll payments on days when a traveler chooses to use the Fast lanes, or as payment for transit or para- transit services, which would be subsidized using toll revenues from the Fast lanes.

    http://tinyurl.com/y6gtnd (page 4)

  4. Larry Gross Avatar
    Larry Gross

    re: zip cars

    I think I mentioned this before – but if zip cars become ubiquitous and the price includes parking AND free travel on TOLL lanes AND they’re available in commuter lots where SLUGs can get to them.. you’re gonna see some interesting things happen.

    How about with the new proposed METRO development – that Zip Cars are a big part of the equation and parking is NOT provided to much of the residential as included but rather extra cost.

  5. Jim Bacon Avatar
    Jim Bacon

    Jim W…. Very interesting. Can you cite an online source that fleshes out these ideas? If I understand you correctly, “Fare Roads” could eliminate a lot of the political resistance to congestion pricing.

  6. E M Risse Avatar
    E M Risse

    Free Advice:

    Zip Cars needs to go after the second car in the household market with special vehicles:

    A vehicle that will hold all the members of a family or family and friends when they need it, not just have it in the driveway in case they need such a vehicle.

    A vehicle that provides “Freedom” see Toyota’s insane ad campaign about having your “freedom” preserved by buying a new Toyota SUV.

    A vehicle that allows one to “meet all challenges, including Mother Nature” as per the insane Lincoln ad.

    A vehicle that is safe to drive when you have no alternative but to get on an Interstate with 40,000 pound, thirteen foot high, 18 wheelers.

    A vehicle you can use one day in two weeks to use in your big car pool.

    You get the idea.

    Footnote.

    In the mid 70 we had two rabbits and rented cars for travels outside the New Urban Region because all of us would not fit in one of the rabbits.

    We now have two SUVs because our driving meets some or all of the above criteria.

    EMR

  7. Larry Gross Avatar
    Larry Gross

    “fare roads” appear some things in common with the airline industry….in terms of efficiency, incentives and inducements.

    this level of sophistication is … beyond VDOT …. and for that matter most entities with an asphalt heritage.

    Folks still think… “more miles of asphalt = more capacity”

    The technology to do all of these things Wamsley points out – exists and is in use right now in various forms and venues but as far as I know – not one integrated system (except for the airlines)

  8. Ray Hyde Avatar
    Ray Hyde

    “….parking is NOT provided to much of the residential as included but rather extra cost….”

    “Sadly, most lawmakers are stuck in the mindset that transportation is a problem that only government can solve….”

    Isn’t restricting parking a tax on people who choose to travel in a way we don’t approve of? Isn’t that a government iniitiative?

    What if some entrepreneur wants to build a metro based development that ALSO offer plenty of free parking? What ever happened to the free market?

  9. Ray Hyde Avatar
    Ray Hyde

    For once, EMR and I agree.

    Zipcar would be better off offering heavy high speed vehicles for occasional road use, and let the rest of us simply own some glorified golfcart for everyday mobility.

    Zipcar seems to have found a nice niche market, but I can’t see it has wide applicability. I also don’t see that ten people using one car results in less travel than ten people using ten cars.

    However, since all ten cannot use it at the same time, it does reduce congestion.

    I wish them luck, but it isn’t THE answer.

  10. Larry Gross Avatar
    Larry Gross

    re: “Isn’t restricting parking a tax on people who choose to travel in a way we don’t approve of? Isn’t that a government iniitiative?

    What if some entrepreneur wants to build a metro based development that ALSO offer plenty of free parking? What ever happened to the free market?”

    As long as those cars stayed on that private lot – fine….

    when they leave that lot – they’re traveling on very expensive infrastructure that is even more expensive to add additional capacity to – and even if we wanted to – the current level of per auto revenue comes nowhere close to paying for the infrastructure.

    This is the fundamental issue – no matter what kind of residential is being considered – because it means at least one car per unit – no matter whether it is an apartment or a SFD – both will likely have a parking space.

    I actually tend to agree with you on free enterprise – as long as free enterprise results in the money-in-hand needed to provide the expanded facilities that will be needed for the additional vehicles.

    We actually do this.. for schools and water/sewer for the most point – at least the equation is somewhat balanced.

    But that does not happen with roads.

    And because it doesn’t you are presented with two choices:

    1 – either start collecting the money that is needed so that infrastructure can be built

    2 – restrict development that demonstrates it will result in deteriorated levels of service.

    OR let the developer CHOOSE how they want to respond… with a development proposal that adequately mitigates

    I think the option that no longer is acceptable is to go ahead with the development no matter what the consequences are in terms of degraded Levels of Service.

    We’re starting to see this across Virginia.

    In Spotsylvania – they’ve had a defacto moratorium for several years. Their moratorium is NOT to wait one year but to “consider” each proposal but to ABSOLUTELY REQUIRE full disclosure of the level of service impacts – and once those impacts are KNOWN – then the BOS uses those impacts as the reason to turn it down if they are not to be mitigated.

    Any locality can do this. All they need to do is require developers to provide the actual LOS impacts of their development and the costs required to mitigate .. and a plan from them to provide the money for mitigation.

    The law provides ANY locality with the right and the authority to maintain existing levels of service. In fact, it’s actually a responsibility and duty. To approve development that they KNOW will result in deteriorated levels of service is, in fact, irresponsible.

  11. Larry Gross Avatar
    Larry Gross

    I think .. if the Feds set up their parking lots so that Zip Cars had priority reserved parking spaces AND zip cars where available at commuter lots and metro lots – as well as at local shopping centers AND they could use HOV and toll lanes for FREE…

    then I’ll add this.. Zip Cars become plug-in Hybrids where they can be taken home at night and plugged in to recharge. (but during the day.. fair game for others to rent – so you’d never be taking the same car to recharge).

    I’m betting .. there would be changes…

    With respect to what kind … like any market… demand would dictate… but I don’t agree with folks about the SUV angle… plain ordinary econoboxes … and smaller “smart” cars

    what this is about – is not weekend family jaunts… it’s about peak hour regional commuting…

    The idea that folks will sell their SUVs .. use their own cars for commuting… and rent a ZIP SUV for weekends …

    do I understand that is what is being advocated?

    If so.. then I’d ask .. in that situation .. what would be the difference between that and a Hertz Rental?

    People ALREADY have this option – correct?

  12. Jim Bacon Avatar
    Jim Bacon

    Ray, No one, absolutely NO ONE, says that Zipcar is “the” answer to congestion. But if it can address one percent of the problem, or even one half of one percent of the problem, it is worth pursuing — along with dozens of other solutions that solve “only” one or two percent of the problem but collectively can make a huge difference.

    Let me resolve some confusion on the issue of who uses Zipcar and how that reduces traffic. Zipcar is a viable business model only where there is mass transit. The expectation is that two-car families will keep one of their cars for every-day driving around, hauling around the kids, going on long vacations. Those families will save money by selling a second car used mainly for commuting. Many (not all) people would use mass transit to go to work, but they occasionally need a car for purposes that a bus or subway cannot fulfill. So, they buy the second car. Since they have the car, they use it instead of riding the subway. Zipcar and Flexcar fulfills the need for a car for occasional use.

    Thus, as Zipcar and Flexcar spread, we would expect to see the following: (1) more two-income families doing without a second car, (2) more people using mass transit to commute, and (3) people using Zipcar/Flexcar for those occasional needs where a bus just won’t do.

    Zipcar and Flexcar fully understand that their business model works only in communities with vigorous mass transit systems. That’s why they haven’t expanded to cities like Richmond or Hampton Roads.

  13. Jim Bacon Avatar
    Jim Bacon

    Ray, Sigh, here I go again, knocking down another straw man. I don’t believe in restricting peoples’ freedom to build parking lots — or to give away free parking if they wish to. (The extent to which municipal governments should restrict parking on public streets is a separate question.) What I DO object to is municipal ordinances that require businesses and developers to provide as much parking as they do. The result is that Virginia dedicates far more space to parking than it needs, especially in the suburbs, and the cost of providing that parking is reflected in a higher cost for real estate.

    What I also believe is that we would all be better off if we could develop a pricing mechanism to allocate finite parking capacity. How we do that, I have not fully thought through. But I’ll have something to say about this on Monday.

  14. Larry Gross Avatar
    Larry Gross

    I wonder … what would happen … if Fairfax… or other localities offered incentives to developers who provided a single parking spot… and allocated space for several zip cars…for residents with one parking spot?

    or is this… the dreaded “social engineering” path?

  15. Ray Hyde Avatar
    Ray Hyde

    I only offer it as a hypothetical, “what if”. We are not going to be able to provide more infrastructure to support cars in anyplace that is Metro acessible, therefore there can be no added cost.

    There is an added benefit to the guy who is trying to sell metro oriented accomodations, if he can offer the “alternative” to mass transit.

    The fact that those who avail themselves of it may find themselves in gridlock locally is not his problem. On the other hand, his customers may like to travel to go skiing, or someplace else out of town.

    Unlike roads, parking capacity is mostly privately owned, and operated at a profit. All I’m saying is that it is inconsistent to claim that government thinks only government can solve our transporttion problems, and then turn around and ask government to artificially restrict what is normally run as a private enterprise.

    As much as we hate it, congestion is a least egalitarian, and probably self limiting, which is more than I can say for most of the proposed solutions.

  16. Larry Gross Avatar
    Larry Gross

    re: Unlike roads, parking capacity is mostly privately owned, and operated at a profit. All I’m saying is that it is inconsistent to claim that government thinks only government can solve our transporttion problems, and then turn around and ask government to artificially restrict what is normally run as a private enterprise.

    As much as we hate it, congestion is a least egalitarian, and probably self limiting, which is more than I can say for most of the proposed solutions.”

    Actually you’re wrong. Governments REQUIRE that the developer provide parking. If Government did not require parking – then the developer WOULD BE FREE to utilize market forces with respect to what was provided for what cost.

    Some would then CHOOSE to provide NO Parking.. and leave it up to the buyers at which point those buyers WOULD use parking spaces that did not belong to them…. Govt then could set up each space with a charge… like parking meters.

    The point I am trying to make is that you’re claiming that government should leave developers alone – and I AGREE but then am asking you .. what would happen if Government DID leave them alone?

    And one step further… why leave taxpayers alone with regard to congestion and road capacity?

    Can we not let people choose for themselves in the marketplace whether or not they want to use congested roads or pay for a less congested one?

    Marketplace? No… what we have .. is government doing the bidding of private enterprise and financing it on the backs of folks who would prefer to choose rather than have their pockets picked…..

    Treating roads like schools is BAD public policy… and the reason is that with “kids”, parents own enough of the actual costs that it does not benefit them to have unlimited kids…. but with roads…the taxpayers own “too much” of the equation to the point where anyone can use unlimited amounts of road capacity.. and it costs them virtually nothing extra over and above what they already pay in taxes.

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