Unbundling cars to daily use and infrequent use vehicles—the potential role of car sharing

Abstract

Car sharing is seen as an alternative to car ownership; however, for many households, this option may be unthinkable. In this study, we explore the idea of combining car sharing and vehicle ownership in order to change car purchase behavior to improve the environmental performance of the fleet. We consider the personal vehicle as a bundle of attributes. We look at the distinction between “daily use” and “infrequent use” attributes. “Infrequent use” features are those that are only needed occasionally, e.g., a larger trunk, all-wheel drive, seating for 7, and long vehicle range. If the vehicle attributes could be unbundled, the personal vehicle would include only those features needed on a daily basis, with car sharing providing the “infrequent use” features. We qualitatively explore what the car-sharing service would need to look like to cover the “infrequent use” needs and analyze if the existing services can provide these needs. We base our analysis on literature and interviews with experts and representatives from car sharing and rental car companies in California and Sweden. We find that car sharing today does not cover the needs for unbundling the vehicle. There are not enough “infrequent use” vehicles available in these services. However, new business models and the growth of peer-to-peer car sharing are already begun to widen the vehicle models available.

Full text

ORIGINAL ARTICLE
Unbundling cars to daily use and infrequent use vehicles—the
potential role of car sharing
Frances Sprei &Diana Ginnebaugh
Received: 12 May 2016 / Accepted: 19 February 2018 /Published online: 9 March 2018
#
Abstract Car sharing is seen as an alternative to car
ownership; however, for many households, this option
may be unthinkable. In this study, we explore the idea of
combining car sharing and vehicle ownership in order to
change car purchase behavior to improve the environ-
mental performance of the fleet. We consider the per-
sonal vehicle as a bundle of attributes. We look at the
distinction between Bdaily use^and Binfrequent use^
attributes. BInfrequent use^features are those that are
only needed occasionally, e.g., a larger trunk, all-wheel
drive, seating for 7, and long vehicle range. If the
vehicle attributes could be unbundled, the personal ve-
hicle would include only those features needed on a
daily basis, with car sharing providing the Binfrequent
use^features. We qualitatively explore what the car-
sharing service would need to look like to cover the
Binfrequent use^needs and analyze if the existing ser-
vices can provide these needs. We base our analysis on
literature and interviews with experts and representa-
tives from car sharing and rental car companies in
California and Sweden. We find that car sharing today
does not cover the needs for unbundling the vehicle.
There are not enough Binfrequent use^vehicles
available in these services. However, new business
models and the growth of peer-to-peer car sharing are
already begun to widen the vehicle models available.
Keywords Car sharing .Ve h i c l e s .Consumer welfare
Introduction
Consumers often purchase vehicles that meet or exceed
all of their needs—from the daily, commute needs to the
rare peak needs. A vehicle that meets all usage cases
likely has higher operating costs (higher fuel usage) and
capital costs (larger vehicle, more features) than a vehi-
cle that would meet only the daily usage cases, because
it has features that are only needed occasionally—such
as additional seating, range, cargo, and all-wheel drive.
The extra fuel usage and expenses are a burden on
consumers. The extra energy usage is detrimental for
society through additional air pollution, climate change,
and energy security impacts. However, consider a busi-
ness model where consumers would purchase a vehicle
to meet their average (daily) needs instead of their
occasional (infrequent) needs, with the option to borrow
a variety of vehicles for infrequent use times. This could
be a welfare enhancing for the consumer (lower costs,
access to a variety of vehicles/features) and for society
(reduced externalities). For the car-sharing operators,
this may imply a broader market. So far, car sharing
has mainly been attractive for consumers that are not
dependent on cars on a daily basis. This perspective
would allow them to broaden their customer base. For
Energy Efficiency (2018) 11:1433–1447
https://doi.org/10.1007/s12053-018-9636-6
F. Sp r ei (*)
Physical Resource Theory, Chalmers University of Technology,
412 96 Gothenburg, Sweden
e-mail: fsprei@chalmers.se
D. Ginnebaugh
Precourt Energy Efficiency Center, Stanford University, 473 Via
Ortega, Stanford, CA 94305, USA
e-mail: moongdes@stanford.edu
The Author(s) 2018. This article is an open access publication
Content courtesy of Springer Nature, terms of use apply. Rights reserved.

auto manufacturers, the benefits might be less obvious,
though sales of smaller vehicles might make it easier to
meet more stringent environmental regulations. Con-
sumers would only consider this option if their welfare
stays the same or is increased with this option.
Consider the vehicle as a bundle of functional attri-
butes (such as safety, seating, luggage space, perfor-
mance, all-wheel drive (AWD), towing, roof rack) and
symbolic attributes (such as vehicle brand, new technol-
ogy, environmental friendliness). If the vehicle attributes
could be unbundled into the features needed for daily
use and the features needed for infrequent use, the
consumer could choose to only invest capital in the
Bdaily use^features and pay as needed for the
Binfrequent use^features, as shown in Fig. 1.BDaily
use^activities are the ones the consumer engages in
most days—e.g., commuting, transporting children to
school, and grocery/small item shopping. BInfrequent
use^activities only occur occasionally and might in-
clude vacations to the mountains or snow, transporting
large items, towing a boat or camper, and hosting visi-
tors. The vehicle attributes, either functional or symbol-
ic, that are essential to the consumer are present in both
the consumer-owned Bdaily use^vehicle and the shared
Binfrequent use^vehicle, while features that are not
essential to Bdaily use^activities are present only in
the Binfrequent use^vehicle. In Fig. 1,the(−)means
this feature is decreased while (=) or (+) means the
feature stays the same or is increased. Vehicle price,
luggage space, and engine size are likely to decrease
from the bundled vehicle to the Bdaily use^vehicle,
while the number of seats could decrease or stay the
same (for example, if five seaters are needed daily).
Safety and symbolic values would remain the same or
increase to avoid decreasing consumer welfare. With
shared Binfrequent use^vehicles, consumers could see
an increase in available features with the variety of
models available to borrow.
A key component to the success of this type of
business model is to keep the service convenient. It is
difficult to compete with the convenience of owning a
vehicle and having it available all the time—so the total
cost savings would have to be large enough to balance
out the inconvenience of borrowing a vehicle. The busi-
ness model would need to consider the convenience of
getting the borrowed vehicle, the availability of partic-
ular vehicles on short notice, and the reliability and
cleanliness of the vehicles. Additional perks may be
necessary to offset the inconvenience, such as a large
variety of Binfrequent use^features available on the
shared vehicles and access to luxury or sports vehicles
that many consumers would not have the capital to
purchase.
One method of unbundling the vehicle features
would be to offer a car-sharing service when purchasing
small, fuel-efficient vehicles. We will next explore what
that car-sharing service would need to look like for the
savings of the service and Bdaily use^vehicle to out-
weigh the capital investment and operating costs of a
bundled vehicle for the consumer, and whether such a
service exists today. The aim of the study is to develop a
framework that analyzes the consumer welfare implica-
tions based on a literature review and interviews with
experts within the car-sharing space. The study focuses
on the readiness of the car-sharing operators rather than
the user perspective. Testing on consumers is the next
step in investigating this framework and should be the
focus of future research, but is outside the scope of this
paper.
Literature review
The car as a bundle
In this paper, we conceptualize the car as a bundle of
attributes and services. It is thus warranted to look at
what may be included in this bundle. The answer will
depend on what perspective is taken and what literature
is reviewed.
Traditionally, car-choice studies have mainly includ-
ed attributes of technical-economic character such as
vehicle price, size, number of seats, luggage space,
engine size, and horsepower (see Choo and
Mokhtarian (2004) for a review of car-choice models).
Recently, car-choice studies have started to incorporate
other aspects as well—mainly behavioral and attitudinal
aspects of the purchasing household; some of these
attributes imply that the car has some other values than
purely functional. Typically, the attitudes to new tech-
nology are included when studying the uptake of alter-
native fuel vehicles, including hybrids and electric ve-
hicles (Bolduc et al. 2008;Eppsteinetal.2011;Ewing
and Sarigöllü 2000;Hidrueetal.2011). There is thus an
implication that new technology can have a value for the
consumer that is separated from the pure functional
value of the car. Environmental attitudes are also
1434 Energy Efficiency (2018) 11:1433–1447
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included in some of the car-choice models (Ewing and
Sarigöllü 2000;Hidrueetal.2011).
Most traditional car-choice models do not take into
consideration how the vehicles are used. However, in
studies that look at the uptake of electric vehicles, the
range of the vehicle and driving habits enter the models
directly or indirectly (Mau et al. 2008;Sullivanetal.
2009). The usage can enter these models indirectly
through attributes like express or High Occupancy Ve-
hicle (HOV) lane access (Horne et al. 2005), implying
that the usage of the vehicle for commuting may have
importance for the purchasing decision. Another ap-
proach is the cost and time for commuting (Ewing and
Sarigöllü 2000).
Driving patterns and car usage have come to the
attention of studies that are trying to evaluate how to
dimension electric vehicles (EVs) and plug-in hybrid
electric vehicles (PHEVs) (Gonder et al. 2007; Pearre
et al. 2011). In these studies, the driving pattern and the
range of the EVs are the main focus and driving point
for assessing the feasibility of the vehicle. Bjornsson
and Karlsson (2015) also look at the economic aspects
of the vehicles. These types of studies are very useful to
determine how one can unbundle the vehicle purely on a
usage base: by identifying the usage pattern, the average
use can easily be identified as well as the infrequent
need for which a car-sharing service might be needed.
However, they might miss other dimensions such as the
size of the vehicles (occupancy and purpose are not
tracked) as well as the more symbolic value of car
ownership.
Following the ideas of Dittmar (1992)onmaterial
possessions, cars can be seen as having both an instru-
mental and symbolic meaning. The instrumental is
mainly concerning the functional uses of the possession.
In the case of the car, it is a means of transportation that
can take you and your things from A to B, but even the
use-related features can have symbolic elements since
they make certain activities possible, such as visiting
friends and family and going on leisure trips (Bergstad
et al. 2010). The symbolic meaning is connected to the
owner expressing who he or she is. From an economic
point of view, a car can symbolize wealth and status.
Vehicles are a prime example of a positional good and
thus conspicuous consumption (Veblen 1899). This is a
limiting way of looking at the symbolic value of
the car since it only captures one aspect—that the
car can communicate wealth (and possibly status)
Fig. 1 The bundled vehicle splits into a consumer-owned daily use vehicle and a shared infrequent use vehicle
Energy Efficiency (2018) 11:1433–1447 1435
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(Heffner et al. 2006). The type of vehicle owned
can signal identity, beliefs, and values as well
(Heffner et al. 2006). The symbolic value of a car
is not only a part of an expression of the self but also
plays a role in the consumer’s social position or mem-
bership in a group (Dittmar 1992). To be able to show
off the symbolic value, there must be awareness from
others on the symbolic values. New technology in
new vehicles can embody new meanings that have
not existed earlier as Heffner et al. (2007) find among
the early adopters of hybrid vehicles in California. In
this case, more than communicating an environmen-
tal awareness, the ownership of a hybrid vehicle also
showed off intelligence and moral considerations for
other people (Heffner et al. 2007).
Car manufactures are aware of this and at times strive
to take it even one step further when their brand or
product becomes a signifier, i.e., when the product itself
can communicate certain concepts without needing any
assistance from other sources. Volvo and its connection
to safety is a prime example (Heffner et al. 2006).
When studying car use motivations, Steg (2005)
refers to the emotions related to driving a car along with
instrumental and symbolic motives, and how these emo-
tions can influence travel choices. Sprei and
Wickelgren (2011)alsofindanemotionalargument
beside instrumental and economic factors behind
vehicle choice.
The functional/instrumental and symbolic meanings
are of course not separated and can interact with each
other. Fuel economy for example is a more functional
aspect and might influence vehicle choice from a pure
economical point of view, but may also have symbolic
value such as environmental awareness and concern or
in the case of the US even patriotism (Heffner et al.
2007). The role of symbolic value is highlighted in
studies of EVs and the early adopters of these
(Noppers et al. 2014; Schuitema et al. 2013;Skippon
and Garwood 2011).
From the literature review, we can conclude that ifwe
consider the vehicle as a bundle, this bundle includes
functional as well as symbolic aspects. None of the
literature addresses how these would be affected by
unbundling the vehicle attributes based on daily and
infrequent usage as is done in this study. One question
is how interwoven are these functions? One of the
conclusions that we draw is that the daily use vehicle
should to as large extent as possible keep the symbolic
value of the bundled vehicle. For example, if the
bundled vehicle was a high status vehicle, this should
be exchanged with a smaller, more fuel-efficient luxury
vehicle. The younger generation, for whom
smartphones and constant connection is more important,
may place less emphasis on the status attributes associ-
ated with car ownership (Delbosc and Currie 2013;
Kuhnimhof et al. 2012). Another example is EVs which,
even when small, have the possibility to carry a high
symbolic value (new technology, higher prices, environ-
mental concern) (Noppers et al. 2014; Schuitema et al.
2013; Skippon and Garwood 2011).
The car-sharing space
Car sharing is a relatively new mobility option, which
began to gain popularity in the early 2000s in North
America (E. Martin et al. 2010) and slightly earlier in
Europe (Jorge and Correia 2013). There are several differ-
ent models of car sharing available today: Btraditional^or
A-to-A; Bone-way,^Bfree-floating,^or A-to-B; and peer-
to-peer or personal vehicle sharing (note on-demand ser-
vices or transportation network companies (TNCs), such
as Uber, are not considered car sharing in the literature).
1
There are also different business models, for example for
profit and non-profit companies, or all EV fleets. Cars are
usually rented for short periods of time—minutes to
hours—but can be rented for days or weeks, especially in
the case of peer-to-peer rentals. Reservations can be made
a short time before using the vehicle, and access to the
vehicle is often provided remotely, using a special card,
key fob, or through a smartphone app.
The traditional car-sharing model provides members
with access to a fleet of vehicles which have designated
parking spots. The member can reserve the vehicle a
short time before using it, use it for hours to days, and
then return the vehicle to its parking spot. As of January
2014, there were approximately 1.23 million car-sharing
members (traditional and one-way) with access to over
17,000 vehicles in the USA (Le Vine et al. 2014; Susan
Shaheen and Cohen 2013; Susan Shaheen and Cohen
2014). Based on surveys in 2005 and 2008, research in
the USA has found that overall traditional car sharing
reduces or delays car ownership, removes 9–13 cars
from the road with each car-sharing vehicle, increases
1
TNCs and on-demand services have the potential to have a large
impact on car ownership; however, they will not replace the
Binfrequent-usage,^and thus we have decided to exclude them in this
study.
1436 Energy Efficiency (2018) 11:1433–1447
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fuel economy of vehicles driven, reduces greenhouse
gas emissions, reduces vehicle miles traveled (VMT),
and reduces public transit use while increasing walking,
biking, and carpooling (Cervero et al. 2007;Martinetal.
2010; Martin and Shaheen 2011a; Martin and Shaheen
2011b,c). The number of cars removed from the road
may be lower when looking at a larger share of the
population and taking into consideration self-selection
bias in the analysis (Clewlow 2016). Mishra et al.
(2015) take into consideration the bias and still find
significant lower vehicle ownership, but the magnitude
of the effect is smaller. Also, car-free households tend to
increase VMT and decrease public transit use while
members with an existing household vehicle exhibit
the opposite behavior (Martin and Shaheen 2011c).
One-way car sharing, also called A-to-B or free-
floating, allows the user to pick up the vehicle in one
location and drop it off in another after the reservation
has concluded. Often, the vehicles can be dropped off
either on the street (sometimes with special street
parking permits) or at designated parking lots. The
energy and VMT impact of this mode of car sharing is
not clear—it may be supporting a car-free lifestyle and
reducing VMT by monetizing trips directly—or it may
be providing an easy mobility option to use instead of
walking/biking/public transportation. Very little peer-
reviewed research has been done on one-way car shar-
ing. Seattle and San Diego have pilot programs under-
way to study one-way car sharing (SDOT 2014;
Services 2011). In the first phase of the Seattle program,
3 to 4% of members reported shedding a car after
joining the free-floating car-sharing program (700–
1100 vehicles) (SDOT 2014). However, VMT may have
increased, since 63% of respondents said they did not
change personal vehicle usage after joining one-way car
sharing (SDOT 2014). This is a concern in other cities,
like San Francisco, which excluded one-way car-sharing
models from their on-street parking pilot due to limited
research demonstrating their environmental and conges-
tion impacts (SFMTA 2013).
Peer-to-peer car-sharing organizations allow mem-
bers to loan or rent their own personal vehicles to other
drivers. It allows privately owned vehicles to increase
their utilization and is more able to penetrate areas with
lower population density (Ballús-Armet et al. 2014;
Hampshire and Gaites 2011; Shaheen et al. 2012).
Hampshire and Gaites (2011) found peer-to-peer car
sharing to be economically viable, but challenged by
public policy, trust, and car insurance. Optimizing
reservations can also increase revenue, making the
peer-to-peer system more viable (Sinha 2011). This type
of car sharing may be the best suited existing model to
provide the Binfrequent use^vehicle for several reasons:
individuals own the vehicles, making low utilization
less of a concern; there is no sunk capital cost on the
fleet by a company, so the fleet can theoretically grow
enough to handle high demand on weekends and holi-
days without worrying about low use during the work
day; and the vehicles could be located right in members’
own neighborhoods, providing a low transaction cost
for acquiring the vehicle. As quoted by the founder of
RelayRides (now Turo), a family could purchase a
smaller, more fuel-efficient vehicle that meets their daily
needs because they have convenient access to SUVs
when one is needed (Abdel-Razzaq 2011). The energy
and environment impact of the peer-to-peer model is
uncertain. It can increase the utilization of existing ve-
hicles, perhaps reducing or delaying vehicle purchases,
which has a positive impact on the environment. It may
also increase consumer welfare by providing access to
shared vehicles in more locations. However, these vehi-
cles may be older and less efficient than traditional car-
sharing vehicles. Also, it is unclear whether individuals
would purchase an additional car or hold on to an older
car because it can be used to make money in peer-to-
peer car sharing. More research is needed in this area.
An overview of the traditional car-sharing develop-
ment in Europe is given in the final report of the EU-
project momo car sharing (momo 2010)thatcoversthe
market in 14 different countries including the provider
structure and the spatial distribution of the services. At
the time of the report (2009), car sharing was just
emerging in many countries with the exception of Swit-
zerland, where more than 1% of the population was a
member of car sharing. The report also covers a survey
with 108 of the 205 car-sharing providers. They find that
the customer base is mainly private (84% of the users),
the rest being business users. The members are mainly
male (with the exception of Mobility in Switzerland
with a more equal gender distribution) and between 26
and 49 years old. Compared to the general public, car-
sharing members own fewer cars and are more likely to
own some kind of public transportation pass. Similarly,
Prieto et al. (2017) find that being male and above-
average educated increase the probability of adopting a
car-sharing service. The reported number of displaced
personal vehicles varies between 4 and 8 per car-sharing
vehicle. Compact cars are dominant in the car-sharing
Energy Efficiency (2018) 11:1433–1447 1437
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fleet, and only 4% of the providers have vehicles with an
environmentally friendly drive system. According to a
more recent report (Bert et al. 2016), there were over
two million car-sharing users in Europe in 2015 and
roughly 31,000 vehicles. Germany is being one of the
countries with the strongest growth (Bert et al. 2016).
There are a limited amount of studies of car sharing
in Europe. Traditional car sharing has been studied in
Austria (Prettenthaler and Steininger 1999), Germany
(Glotz-Richter 2012; Loose et al. 2006), Ireland (Rabbitt
and Ghosh 2013), and specific cities like Lisbon
(Baptista et al. 2014) and Rome (Musso et al. 2012).
One-way car sharing has mainly been studied through
simulated models (Jorge and Correia 2013), while free-
floating car sharing has been studied through user sur-
veys in Ulm, Germany (Firnkorn and Müller 2011,
2012), and other German cities (Kopp et al. 2015).
Studies concerning the Swedish car-sharing market
can be found in reports from the Swedish Road Admin-
istration (Trafikverket 2012,2013). The market consists
of one large commercial operator (Sunfleet) partially
owned by Volvo Cars and a large number of smaller
coops (27 of these where surveyed in Trafikverket
(2013)). What is specific for Sweden is that the vehicles
have a high environmental and safety standard. There is
a lack of studies of Swedish car-sharing members. The
existing reports rely on a few old studies, mainly from
other countries (Trafikverket 2012).
The available literature gives us some insights to car
purchase behavior and car sharing today, but only sep-
arately—information on this new area of how car shar-
ing influences the type of vehicles purchased is limited.
Therefore, we gathered further information through in-
terviews with key actors and experts.
Method
We first developed a framework for the consumer wel-
fare implications of unbundling the vehicle. The frame-
work, combined with results from expert interviews and
aliteraturereview,wasusedtoevaluateiftoday’scar-
sharing space can support an unbundling of the vehicle.
The literature review had two main focuses. The first
one is to analyze to what extent the car can be consid-
ered a bundle and what can be included in this bundle.
For this part, three different types of studies have been
included: car-choice studies and the attributes that they
include in the choice models, usage-centered studies
that mainly look at travel patterns, and studies that
include the meaning and more symbolic values of the
car. The second focus has been on the car-sharing space
covering various forms of car sharing both in the USA
and in Europe. Since this space is relatively new, we
included peer-reviewed papers, reports, and other gray
literatures.
In order to fill the identified gaps from the literature
and to get up-to-date information (the car-sharing space
is quickly evolving), interviews with relevant actors
were carried out in Sweden and in California, USA.
California was chosen due to the presence of the major
actors of car sharing as well as smaller providers. It is
also where some of the major peer-to-peer car sharing
started, providing an opportunity to gain insight on how
this innovative sector might grow elsewhere. The chal-
lenges in Europe are of slightly different character given
other urban structures and fuel prices. While other coun-
tries in Europe have come further when it comes to the
penetration of car sharing, e.g., Switzerland, Sweden
has a high adoption rate of mobile and net-based appli-
cation and is a car-manufacturing country with a tradi-
tion of purchasing larger vehicles (Sprei and Karlsson
2013), making it an interesting study when it comes to
changing car-purchasing behavior.
In total, 12 semi-structured expert interviews were
carried out: 7 in Sweden, of which one also had experi-
ence in Switzerland, and 5 in the USA. Interviewees
were chosen to get a sampling of the people working for
companies with different types of car sharing: car rental,
traditional (vehicles are returned to the same place
where they are picked-up), one-way (the vehicle is
picked up at one location and dropped off at another),
electric vehicle (EV)-only, peer-to-peer (vehicles are
rented from other private individuals), for profit and
non-profit, and coops (members own the car sharing),
both in the USA and Sweden. We also interviewed
experts from universities and from city and country
agencies. In Sweden, four interviewees were managers
and in car-sharing companies, three were experts. In
California, the division was three car share actors and
two experts (one university researcher and one city
government analyst).
The interview structure was based on a number of
themes: the customers, the fleet, the influence of car
sharing on vehicle purchase choice, how car sharing
can be supported, and future mobility. At the end of
the interview, the idea of unbundling the vehicle was
presented to the interviewee for comments. For a
1438 Energy Efficiency (2018) 11:1433–1447
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summary of the different themes from the interviews,
please see Sprei and Ginnebaugh (2015).
The interviews range from 41 min to an hour and
10 min. All of the Swedish interviews were carried out
in person, except one which was carried out by phone:
all in Swedish. They took place either in the inter-
viewee’sofficeoratChalmersUniversity.Threeofthe
US interviews took place in person in a University
office, at a café, and in a personal home. The two phone
interviews were conducted in a home office.
Interviewees are anonymized through initials with
their area of expertise, such as BDG-EVonly^and BSS-
expert^in the text.
Each interview was recorded and transcribed. The
transcribed interviews were analyzed through recursive
abstraction based on the different themes. The first step
of abstraction was performed by each author separately,
while further steps were done by both authors.
The literature and the interviews complement each
other: while the literature is more encompassing, it may
lack the actuality due to the fast-moving field, which can
be addressed by expert interviews. While the number of
interviews may be limited, the field is also relatively
small and the interviewees have been carefully selected
to capture the different types of car sharing. The con-
sumer and user perspectives were not the aim of this
study, focusing instead on the readiness of the car-
sharing operators.
Back-of-the-envelope calculations were made to es-
timate carbon dioxide emission and fuel savings of
unbundling the vehicle to determine the order of mag-
nitude savings possible. The calculations are based on
the following equation:
S¼C*Mave*Nrepl*Shkm *FCL–FC S
ðÞ ð1Þ
where Sis the saved carbon dioxide emissions (kg),
Cis the carbon content of the fuel (kg CO
2
/l), M
ave
is the
average annual driving distance of personal vehicles
(km), N
repl
is the number of vehicles replaced, Sh
km
is
the share of kilometers replaced (fraction or percentage),
FC
L
is the specific fuel consumption (l/km) of the
bundled larger vehicles, and FC
S
is the specific fuel
consumption of smaller vehicle. For the smaller vehicle,
two cases were calculated: one for an average smaller
vehicle and one for a hybrid vehicle.
For the US case, data for average vehicle kilometers
traveled, the share of urban and rural kilometers, the
number and type of on road vehicles, and the fuel
consumption were gathered from the Federal Highway
Administration, part of the US Department of Transpor-
tation.
2
For the Swedish case, data was collected from
Statistics Sweden for both specific fuel consumption
and average annual kilometers driven (Statistics
Sweden 2015). Calculations are made for both diesel
and gasoline vehicles and weighted based on the share
of vehicles in the fleet.
We use urban kilometers to approximate daily/
commute kilometers that can be replaced with a smaller
vehicle and assume the rural miles will still be driven by
a borrowed light-duty truck. In the Swedish case, this
corresponds to half of the miles traveled (see e.g.,
Jakobsson et al. (2016) for a distribution of miles trav-
eled). In the USA, approximately two thirds of the miles
driven by long wheel base vehicles (i.e., SUVs and
trucks) are urban (USDOT 2015).
A number of vehicles replaced are the authors own
estimates based on current levels of car-sharing mem-
bership in various countries and a moderate upscaling
(momo 2010; Shaheen and Cohen 2014).
Results
Framework for considering consumer welfare
implications
Consumer welfare normally refers to the utility that the
individual derives from the consumption of goods and
services (Khemani and Shapiro 1993). It will depend on
given prices and the individual’s income and prefer-
ences. Here, we create a framework to see how the
consumer welfare may be affected by different factors
in order to determine some general prerequisites for
consumer welfare to remain equal or higher in the case
of an unbundling of the vehicle.
In our framework, consumer welfare effects are the
sum of the following: capital or sunk costs, operational
costs, and other costs that include symbolic value, trans-
action costs, and convenience costs. Table 1summarizes
the potential changes in consumer welfare. In order for
unbundling the vehicle to work on a broad scale, the
items in the Bwelfare gain^row would have to offset or
exceed the Bwelfare loss^items. Lower vehicle capital
costs, reduced fuel usage, and the increase in the variety
2
The data is collected from www.fhwa.dot.
gov/policyinfromation/statistics/2013. Visited on 2015–09-08.
Energy Efficiency (2018) 11:1433–1447 1439
Content courtesy of Springer Nature, terms of use apply. Rights reserved.

of vehicles would have to be equal to or higher than the
sum of the membership charges, costs of shared vehicle
usage, and the harder-to-quantify potential inconve-
nience of a shared vehicle, including advanced plan-
ning, availability of desired vehicle, proximity of the
vehicle to customer’s location, and the lack of ability to
leave key items in the vehicle—like sunglasses and car
seats. Another potential welfare loss is a reduction in
driving due to pay-as-you-drive payment scheme in-
stead of sunk cost of owned vehicle. However, since
the customer still owns a vehicle in this case, this may
not be a large factor. Reduction in driving is also a
societal benefit even if it is a loss of consumer welfare.
A key feature for this business model to be broadly
successful is the symbolic value of the customer’svehi-
cle. It is necessary to maintain or improve the symbolic
value of the owned vehicle in order to maintain or
improve consumer welfare (Dittmar 1992;Steg2005).
Symbolic value can be maintained by, for example,
keeping the same luxury brand in the owned vehicle or
by providing some other symbolic values through new
technology such as EVs and hybrids.
From a societal welfare point of view, there are gains
in the form of less carbon emissions, less local pollut-
ants, and less fuel use. There might also be distributional
effects giving access to new vehicles and a larger range
of vehicles to lower income groups (point stressed by
JH-expert).
Can today’s system support an unbundling
of the vehicle?
In this section, based on the interviews and literature, we
analyze how the current state of car sharing can support
a consumer welfare gain if the vehicle would be
unbundled based on the framework developed in
BFramework for considering consumer welfare
implications.^
Possible welfare gain from unbundling the vehicle
The welfare gain is mainly achieved through the
lower cost of the purchased vehicle combined with
less money spent on fuel since the purchased vehi-
cle will be more fuel efficient (see, e.g., Koopman
(1995) for a calculation of consumer welfare of
vehicles). For our calculations, we consider two
scenarios—where we replace the bundled vehicle
with a smaller more fuel-efficient vehicle (35%
lower fuel consumption in the Swedish case, 27%
lower fuel consumption per vehicle in the US case)
and with a hybrid vehicle (60% lower fuel con-
sumption in the Swedish case, 66% lower fuel
consumption in the US case—the differences are
due to the difference in prevalent vehicles in the
two countries). For the hybrid, the purchasing costs
may not be that much lower, but the unbundling
may make a vehicle with more advanced fuel sav-
ing technology profitable. There is thus today a
potential for a welfare gain.
In the best case scenario, car sharing can give
access to a larger variety of vehicles such as convert-
ibles, sports vehicles, and AWD. This would imply a
welfare gain for the consumer. To better understand
to what extent this was available today, we surveyed
the types of models in different types of car-sharing
fleets (Table 2). Although this table does not show
the number of vehicles available in each category, it
does provide insight to the type of vehicles each
company emphasizes. The table provides illustrative
Tabl e 1 Framework for considering consumer welfare implications of unbundled vehicle
Capital/sunk costs Operational costs Other costs
Welfare gain Lower vehicle purchase costs Less fuel used Variety of vehicles
Welfare loss Membership costs Cost of shared vehicle usage Proximity of shared vehicle
Planning, reservation time and ease
(app, key exchange,…)
Availability of vehicles
General inconvenience
Ability to leave key items in vehicle
(i.e., car seats)
Equal Symbolic value of vehicle
Uncertain Less driving
1440 Energy Efficiency (2018) 11:1433–1447
Content courtesy of Springer Nature, terms of use apply. Rights reserved.

examples of operators within each category and is not
a full representation of all operators in the car-sharing
space. It is easy to see that the smaller coops do not
have that much variation, but even the larger tradi-
tional car-sharing firms are mainly dominated by
regular five seat vehicles. This is not surprising since
most of the demand is in this segment (PA-tradition-
al, PM-coop, NS-Car Rental; Martin et al. 2010).
However, this will make it harder for car sharing to
cover infrequent use needs. Peer-to-peer companies
in the USA have perhaps the best potential to cover
infrequent use needs with the largest variety of vehi-
cle attributes available to members (AB-p2p, SS-ex-
pert, Abdel-Razzaq (2011)).
The interview results also suggest that the access to a
large variety of vehicle models is still a limited option.
The majority of the vehicles are regular vehicles of small
to medium size since these are most popular and reflect
the average need for car sharing, i.e., shorter trips with
not much luggage (PA-traditional, PM-coop, NS-Car
Rental; Cervero et al. 2007;Kim2015; Martin and
Shaheen 2011a; Shaheen and Cohen 2013). Smaller
vehicles with higher fuel economy might also increase
the profit of the car-sharing company (Bellos et al.
2017). The exact composition of the fleet of the car-
sharing companies will depend largely on their business
model and their company goals. In both Sweden and
California, the non-profits focus on green vehicles
(AD-non-profit, MK-expert, PM-coop), but even
commercial car sharing incorporates green vehicles
in their fleet such as electric vehicles in Car2go and
ReachNow. In Sweden, the main commercial compa-
ny Sunfleet is owned by Volvo and thus their vehicles
dominate. Generally, it can be said that the larger the
car-sharing company, the easier it is to have a diver-
sity of models such as Mobility in Switzerland and
Zipcar in the USA that include more specific models
such as sport and luxury vehicles (MK-expert). The
car-sharing space is rapidly changing and there are
new actors moving into it, especially OEMs creating
their own car sharing such As GM’sMaven.This
might also allow for a larger variety of vehicle
models. Maven, e.g., offers a number of SUVs in
their fleet.
3
BMW’s ReachNow has also gone from
providing only one type of vehicle to up to six
models. Still, none of these are seven seaters or
transport vehicles. Interviewee AB-p2p mentions that
for peer-to-peer, the luxury vehicles were always in
demand. These are vehicles that members likely can-
not afford on their own or be able to rent elsewhere.
The utility vehicles, with the larger cargo space, were
also in high demand (AB-p2p).
Tabl e 2 Examples of car-sharing companies in Sweden and USA and number of models of different types of vehicles (2014)
Country Company Type of service Regular
cars
7+ seaters Transport
vehicles
AWD Total Source
Sweden Sunfleet Traditional 9 1 3 3 16 www.sunfleet.com
Göteborg Bilkoop Traditional
non-profit
61 1 8www.goteborgsbilkoop.se
USA Zipcar Traditional 18 3 7 3 28 www.zipcar.com
City Carshare Traditional
non-profit
19 0 4 2 25 citycarshare.org
a
ReachNow One-way 4 0 0 2 6 reachnow.com
Turo (formerly
RelayRides)
Peer-to-peer 286 23 155 215 464 Turo.com
car2go One-way 3 0 0 0 3 www.car2go.com
Enterprise
CarShare
Traditional
from car rental
20 1 1 1 23 www.enterprisecarshare.
com
Some vehicle models are both transport vehicles and all-wheel drive (AWD) but are not double counted in the total. Also, US numbers are
approximate—Zipcar depends on the location, and peer-to-peer Turo and Getaround may change frequently. Enterprise CarShare is for San
Francisco. The websites were visited in 2017 (expect Enterprise CarShare and City Carshare visited 03–2016)
a
City Carshare has since we have collected the data merged with Getaround and is no longer a non-profit. See https://www.getaround.
com/press/library/2016/11/10-Getaround-And-City-Car-Share-Join-Forces-Establishing-San-Franciscos-Largest-Sharing-Economy.
[Accessed 2017–08–23]
3
www.mavendrive.com [acc essed 2017–08-11]
Energy Efficiency (2018) 11:1433–1447 1441
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Possible welfare loss from unbundling the vehicle
Welfare losses are connected to the pricing structure of
the car-sharing service. Most car-sharing companies
have a monthly membership fee, and then there is a cost
per hour and distance traveled for the vehicles (AD-non-
profit, DG-EVonly, UF-EVonly, PA-traditional; momo
2010; Shaheen and Cohen 2014). This implies that for a
car-sharing service, capital costs are decreased and
mostly transferred to operational costs. In some cases,
this pricing structure can be perceived as a barrier
(Sochor et al. 2015), since these operational costs are
perceived as quite high and people are not always aware
of the total costs of ownership of their vehicles (Sprei
and Wickelgren 2011; Turrentine and Kurani 2007).
Higher operational costs may lead to less driving (SS-
expert). Both the interviews and literature on car sharing
refer to the fact that car-sharing members often drive
less after a while (Cairns 2011; Cervero et al. 2007;
Martin and Shaheen 2011a;momo2010) (even if the
exact cause of this has not been investigated). Decreased
driving may have societal benefit in lower emis-
sions, but for the individual, there may be a welfare loss
if they perceive that they have to give up activities and
trips that they otherwise would have partaken in
(Bergstad et al. 2010).
The other costs under welfare loss in Table 1are key
issues in making sure that the unbundling actually is
attractive to the consumer. One of these aspects is the
proximity to the shared vehicle. According to the inter-
views, customers often chose a vehicle close to them
(with the exception that they might walk further to get a
cheaper vehicle) (AD-non-profit, AT-expert, PA-tradi-
tional, UJ-EVonly, PM-coop). The relevance of strate-
gically situated parking to help promote car sharing also
reflects the relevance of location of vehicles (AD-non-
profit, AT-expert, MK-expert, PA-traditional, UJ-
EVonly, PS-expert). Another related aspect is the avail-
ability of vehicles. Interviewee MK-expert takes the
example of providing two car-sharing parking places
next to each other and how that increases the usage of
the vehicles at that specific location due to both the
perceived and the actual availability of the vehicles. de
Lorimier and El-Geneidy (2013) also find that the num-
ber of vehicles at a station increases in both availability
and usage. Also, membership in car sharing is related to
the density of vehicles (according to MK-expert taking
Mobility in Switzerland as an example). PA-traditional,
NS-Car Rental, and AD-non-profit point to the fact that
car sharing has a lower occupancy level than car rental,
since availability of vehicles is a key to keeping
members.
Practical issues such as ease of reservation, easy
working apps, and ways to access keys are important
as well (DG-EVonly). Interviewee AD-p2p says Bif it
wasn’teasyitwouldn’twork.^For peer-to-peer rental
making, the booking and key exchange easy is essential
(AD-p2p). Other practical issues, such as being able to
leave your personal belongings, such as sunglasses or
car seats in the car, have anecdotally been brought up as
a possible inconvenience (SB-expert).
The inconveniences of car sharing are reflected in the
fact that many social and economic groups are hard
recruit for car-sharing membership. While growing,
the penetration rate is still low in most countries, except
Switzerland (momo 2010; Shaheen and Cohen 2014).
The concept is still new and unknown to many people,
and if they do not perceive car ownership as trouble-
some, it is difficult to explain the advantages of car
sharing (AD-non-profit, DG-EVonly, PA-traditional,
NS-Car Rental). For some consumers, such as retired
people, younger working class, and high-income peo-
ple, vehicle ownership still has a high status factor and
car sharing may not be desirable (AT-expert, PA-tradi-
tional, NS-Car Rental, JH-expert). Paundra et al. (2017)
have suggested that the research on car sharing should
look closer at psychological ownership, i.e., feeling of
ownership related to objects that consumers do not
formally own.
Some interviewees mentioned the fact that people
might not be comfortable sharing vehicles with total
strangers (AB-p2p). Two interviewees (NS-Car Rental,
SS-expert) brought up the idea of having different levels
of openness of car-sharing circles or fractional owner-
ship to address this. A first step in that direction is being
tried by Audi in Stockholm that provides the key and
software needed for sharing your vehicle with four other
people of your choice.
4
Interviewees’view of car-sharing vehicle as infrequent
vehicle
When car-sharing practitioners and experts were asked
if car sharing can affect car purchase choice, the answer
was likely yes—people are more likely to purchase the
same type of vehicle they typically use in car sharing
4
https://www.audiunite.com/se/service/sv_unite.html
1442 Energy Efficiency (2018) 11:1433–1447
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(AD-non-profit, DG-EVonly, SS-expert, AT-expert). Al-
though the interviewees did not have quantitative evi-
dence of this phenomenon, they all invariably had an-
ecdotal evidence to support this claim. AD-non-profit
mentions one customer telling her she bought a Scion
because she really liked it when she used it in the car-
sharing service. There is also evidence from the litera-
ture that car-sharing members will be more likely to own
an alternatively fueled vehicle (Clewlow 2016).
When the idea of grouping together car sharing with
the purchase of a fuel-efficient commuter vehicle was
presented to the car-sharing practitioners and experts,
the reaction was cautious—they generally agreed it was
a great idea in theory, but really hard to implement, and
not being done today (AD-non-profit, DG-EVonly, AB-
p2p). Several interviewees mentioned that if such a
service existed, the dealers would be in the ideal position
to run such a program (SS-expert, AB-p2p, UJ-EVonly,
MK-expert, PA-traditional). The dealers could utilize
excess capacity on their lots while supporting the sale
of more fuel-efficient vehicles. This type of service is
already being tried by some automobile manufacturers,
such as BMWoffering use of an X3 with the purchase of
their all electric i3 and Nissan for the Nissan Leaf.
5
Some of the interviewees however did mention with-
out being prompted that there is a chance that car shar-
ing could work as the Binfrequent use^vehicle (JH-
expert, PA-traditional, PM-expert, NS-Car Rental). JH-
expert even stated a term that summarizes the idea quite
well: mobility insurance, i.e., a service that provides you
with the mobility needed. None of the interviewees
however had any evidence that this was actually
happening today. While it might seem like an attrac-
tive option, some key issues were seen as problem-
atic. For example, there might be a peak demand for
larger vehicles during weekends and vacation periods
(AB-p2p, AD-non-profit). Also, for a longer trip,
such as a 1-week vacation, car sharing becomes too
expensive and the rental car is a better option (JH-
expert, PM-coop, MK-expert).
Theoretical energy and carbon emission implications
To test if this new vehicle ownership/vehicle sharing
model can help address energy security, air pollution,
and climate change, we do a back-of-the-envelope
calculation of potential fuel savings and carbon di-
oxide (CO
2
) emission reductions. First of all, it
should be noted that we here only look at the user
phaseofthevehicleandthatthereisasmallchance
that the total number of vehicles could increase if
consumers continue to own one vehicle in addition
to the shared vehicles. However, the user phase of the
vehicle life cycle stands for the main environmental
impact (Hawkins et al. 2013; Sullivan et al. 1998)
and is thus the focus of our calculations. To put these
numbers in perspective, we also calculate the number
of vehicles these emissions would represent as
Bvehicles taken off the road.^The answer depends
on the extent of the adoption and usage of this system
and the type of vehicle the light-duty truck is being
replaced with for daily use cases. As shown in Ta-
ble 3, for the US case, we consider replacing a small
percentage (0.5%) of the light-duty truck (17 mpg,
14 l/100 km) stock with either an average vehicle
(23 mpg, 10 l/100 km) or a hybrid vehicle (50 mpg,
5 l/100 km) for urban miles. We use urban miles to
approximate daily/commute miles and assume the
rural miles will still be driven by a borrowed light-
duty truck (USDOT 2015). Even this small adoption
level leads to substantial improvements for energy
security and the environment, especially with the
hybrid vehicle where gasoline is reduced by 540
million liters per year and CO
2
emissions are reduced
by 1.3 million metric tons per year. This is equivalent
to taking approximately 270,000 average vehicles off
the road.
For the Swedish calculations, we consider large
vehicles to be those with a curb weight above
1700 kg. Five thousand of these vehicles are pre-
sumed to be replaced with an average car or a hybrid
forhalfofthemilesasaproxyforcommutingor
daily use. Given the lower number of vehicles, the
annual savings are much smaller. However, it would
still correspond to up to 1500 vehicles taken off the
road and 1.5 million liters of fuel saved.
Conclusions
Our conclusion is that car sharing as it works today
could not serve as an Binfrequent use^vehicle to
support the unbundling of the vehicle. The main
reason for this is the lack of models in the car-
sharing fleets that meet the infrequent use vehicle
5
http://www.nissan.co.uk/GB/en/vehicle/electric-
vehicles/leaf/discover/owner-benefits.html
Energy Efficiency (2018) 11:1433–1447 1443
Content courtesy of Springer Nature, terms of use apply. Rights reserved.

requirements. This is likely due to a combination of
factors, including the usage patterns of these infre-
quently used vehicles might reduce profitability for
the operators under the existing pricing schemes
and business models by creating over demand dur-
ing, e.g., weekends and holidays. However, consid-
ering that the mobility space is changing rapidly,
we can see that there is a chance for a new service
model to develop, either through expansion or
through diversification of car sharing or other actors
such as car dealers or car rental companies further
joining the space. Combinations and collaborations be-
tween the different actors and development of new
business models are additional ways forward.
If more actors in the mobility space were to shift
toward a discourse highlighting the connection be-
tween vehicle attributes and their specific usage,
there could be a move toward an unbundling of
the vehicles. This would allow for a diversification
of modes and hence a reduction of environmental
impact. This could also benefit the diffusion and
acceptance of electric vehicles as personal vehicles
that work perfectly fine for daily use but where the
limited range makes them less suitable for those
infrequent longer trips.
One of the prerequisites for an Binfrequent use^
car-sharing service to work is a high variety of
vehicle models in the car-sharing fleet, i.e., not
only mid-size vehicles, but also larger vehicles such
as 7-seaters, mini-vans and AWD. According to the
literature and our interview results, for car-sharing
companies to achieve such diversity they need to
achieve a certain size and customer base. Thus
supporting car sharing is an important step for
enabling the possibility for it to provide Binfrequent
use^services.
One limitation of our study is that the consumer
perspective is solely based on literature on vehicles
or car sharing. There is a need to test the idea of
unbundling the car into a Bdaily use^vehicle and
an Binfrequent use^service from a consumer per-
spective. Is it at all attractive for consumers? To
validate this, there are a number of questions that
should be addressed in future research. One area is
to better understand what the Binfrequent needs^
are both when it comes to how often they actually
occur, for how long they are used, and what attri-
butes are needed. The attractiveness, design, and
better understanding of the business model of an
unbundling of the vehicle could be addressed
through constructing choice experiments and stated
preferences. Issues that would need to be studied
are willingness to pay, convenience, distance to
shared vehicle, and pricing schemes. This might
also be useful to better understand what kind of
services and vehicles the consumer would want and
what combinations are most attractive—more re-
search is needed on the consumers’attitude and
experience relative to the framework presented
here. There is also a need for more research on
the connection between vehicle use and vehicle
choice both related to conventional vehicles but
also in the context of car-sharing research. This
connection and the role of vehicle attributes related
to choice could be incorporated in more user-based
surveys and studies.
Tabl e 3 Theoretical energy and carbon emission impacts for replacing light-duty trucks with more fuel-efficient vehicles for urban/daily use
miles
Replacement vehicle
U.S.
If 500,000 light duty
trucks (0.5% of the US
light truck vehicle stock)
are replaced for urban
miles only (65% of total
miles - as a proxy for
commung / daily use)
Reducon / year Average Car Hybrid Car
Gasoline (l) 220 million 540 million
CO2 (metric tons) 0.5 million 1.3 million
No. of Vehicles taken
off the road 110,000 270,000
Sweden
If 5,000 heavy (>1,700
kg) vehicles
are replaced for half of
the miles (as a proxy for
commung / daily use)
Fuel (Gasoline +
Diesel) (l) 810,000 1.5 million
CO2 (metric tons) 2,000 3,700
No. of Vehicles taken
off the road 800 1,500
1444 Energy Efficiency (2018) 11:1433–1447
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Acknowledgments Area of Advance Transport at Chalmers and
the Precourt Energy Efficiency Center are acknowledged for
funding of the project. We would also like to thank all our inter-
viewees for participating in the study.
Compliance with ethical standards
Conflict of interest The authors declare that they have no con-
flict of interest.
Open Access This article is distributed under the terms of the
Creative Commons Attribution 4.0 International License (http://
creativecommons.org/licenses/by/4.0/), which permits unrestrict-
ed use, distribution, and reproduction in any medium, provided
you give appropriate credit to the original author(s) and the source,
provide a link to the Creative Commons license, and indicate if
changes were made.
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