Here are the key steps and decisions you’ll need to make if
you start your own carsharing program.
Carsharing Membership Requirements
Most carsharing organizations require only that members have
a driver's license and a decent driving history. Your insurance company will
likely require you to check driving histories because a member with a poor
driving record could raise insurance premiums for everyone. You could either
check the driving history of prospective members or require them to submit a
copy of their record with their application.
Where to Keep the Cars
Figuring our where to put the cars can be an initial
challenge. If your carsharing club is composed primarily of neighbors, you
could probably just designate one person's driveway or park on the street, if
available. If members are more spread out, you should park shared cars in a
location served by public transportation so people can get to and from the car
easily if they don't live nearby. Here are some options:
- Find a
nonprofit or business that will donate a designated parking spot for you
in its lot.
- Ask a
local bus or train station to give you free parking.
your city to create designated on-street parking for carsharing
someone's private driveway, either free or for a small monthly rent.
with an existing business to oversee use of a specific car. For example,
you could work out a deal with the local video rental store to park the
car in its lot, and even have its staff check the car in and out.
Procedures for Using Cars
There will be procedural issues to work out for your
carshare club, including:
the car. If your group is small, you could just schedule use of
the car with an online calendar to which all members have access. Larger
groups typically use online reservation software. Carsharing nonprofits
are usually generous about sharing software they develop, so ask around.
to the car. If your carsharing club is small, you could just give
each member a key (though in newer cars, keys are expensive). For larger
groups, here are some options (see CarSharing.net for
information on businesses that provide these devices and more):
the car key in a coded lock box where the car is parked and give members
a numerical entry system on the car. This can cost $500 or so. You could
put a lockbox in the car and keep the ignition key in that box, or
install a numerical ignition system as well.
your shared car is kept at an apartment complex with 24-hour staffing,
drivers can pick up and drop off keys with the staff.
the car parked at a store or other business with long hours. Come up with
an agreement with that business to provide the key to members upon
for drivers. Decide whether you'll ask drivers to do anything
once they're in the car. Some carsharing programs keep a defects list in
the car and ask drivers to inspect the car and note any new defects. You
should also come up with procedures for drivers to follow if the car
the car. Most carsharing clubs require drivers to return the car
with at least a quarter or half tank of gas. Here are some options for
having drivers fuel the car:
a credit card in the car to be used only for gas.
an account with a local gas station (often the station nearest to the
car's parking spot).
drivers fill the tank and submit receipts for a credit to their
drivers fill the tank completely at the end of every trip, so they pay
for the exact amount of gas that they used.
Funding Your Carsharing Program
Your group will need to raise money to buy its car(s). There
are many options: grants, individual donations, investments, member
contributions, and so on. The type of funding available will depend on whether
you start a nonprofit or for-profit group.
Many carsharing groups have gotten started by partnering
with local transit agencies, city governments, or other entities that would
benefit from the presence of a carsharing program. Through these partnerships,
carsharing organizations have obtained grants, free parking, assistance with
marketing, and other benefits.
Pricing and Cost Sharing
There are all kinds of ways to arrange for pricing or cost
sharing for your carsharing club. If your group is small, you could create a
group account into which everyone pays a fixed amount each month and have
everyone pay for their own gas. However, if your group is larger, you'll
probably want to charge members based on how much they use the car(s). Here are
you charge per mile, per hour, or some combination of the two? For
example, you might charge $3 per hour and $0.30 per mile. Or you could
charge $6 per hour and allow up to 10 miles for that hour, then charge for
any additional miles driven.
you have discounted rates for non-peak hours, such as the middle of the
you also include monthly fees? Initial membership fees? A security
deposit? Some carshares keep these fees low to make it cost-effective for
infrequent users to join.
you have different plans based on how often people use the cars? For
example, frequent users could pay a higher monthly fee and lower mileage
and hourly rates; infrequent users could pay a low monthly fee, but higher
mileage and hourly rates.
if members need a car for a day-long trip? Should reduced rates apply?
you charge penalty fees for late return of the car, late cancellation,
failure to fill the gas tank, losing a key, and so on?
Insurance and Loss
You should expect to pay somewhere between $150 and $300 per
month per vehicle for insurance. Your rates will vary based on the age and
driving history of your members, where the car is parked, how it is used, and a
variety of other factors. We strongly recommend obtaining a high limit of
liability, such as $1,000,000 per accident. This will protect the whole club
from folding if one member causes an accident.
You may have to shop around for insurance, and it could help
to talk to other carsharing programs to find friendly insurance companies. Some
companies will be unfamiliar with carsharing groups. Others might treat you
like any other nonprofit or business that insures a company car or fleet of
vehicles. Your insurance company will likely require you to provide and update
a list of members and their driving histories.
You should also decide what to do if a car is involved in an
accident. For example, if a member is at fault in an accident, you may want to
have the member pay the insurance deductible (or pay for any repairs that are
less than the insurance deductible), as well as any costs that are not covered
Other Questions to Consider When Starting a Carsharing Program
Here are some other issues your group may want to discuss:
kinds of cars should we have? Any stick-shifts? Hybrids? Electric
vehicles? Trucks or vans?
someone other than a member drive the car if a member needs a ride and is
not physically able to drive for some reason?
are members' responsibilities with regard to checking fluids, tire
pressure, and so on?
what point might it make sense to purchase an additional car?
rules do members want to have about using the cars? No food? No pets? No
smoking? Keep cars locked to prevent theft? No hazardous materials?
if a member damages the car's interior, by spilling coffee, for example?
should a member do if a car breaks down? Some groups authorize members to
make repairs only up to a certain cost ($200 or $300); the member must get
permission from the group for more costly repairs.
what circumstances will you terminate a membership?
you offer membership to businesses as well?
you try to grow membership? If so, how will you market the group or do
outreach to the public?
Documents Every Carsharing Program Needs
In addition to the formal paperwork you may need to file
with the government to create an intermediate entity (for example, articles of
incorporation or a 501(c)(3) tax exemption application), your group may want to
create some documents that you'll use over and over, such as:
or agreement for new members to sign
log for drivers to complete at the end of each drive, and
documents to be kept in the car (such as instructions on what to do if
there's an accident).
For help getting started, contact an existing carshare
to find out what documents it uses and whether you can adapt them for your own