USA - Oregon (Portland) - Flexcar: A Model of For-Profit Carsharing

Private automobile ownership has locked North Americans into a physical and social infrastructure which places high demands on public budgets and private wallets. Meanwhile, the social and environmental costs of sprawling development are manifold. In the move toward “livable” urban regions, planners are looking for strategies to diversify the overall mix of transportation options.  Carsharing has become one such important alternative, either through cooperatives or through the private sector. As competition in commercial carsharing heats up, Portland-based Flexcar is emerging as one of North America’s top contenders.

In “Carsharing and Mobility Services: An Updated Review”, UC Berkeley carsharing researcher Susan Shaheen calls automobile use an “extravagant use of resources to move individuals”, going on to say that “In most cases, individuals are transported in vehicles with 10-20 times greater mass than the person being transported and a footprint at least 100 times larger”. If nothing else about the environmental, social and financial costs of North America’s car culture appears absurd, the above statement should tell us that the time for sensible mobility design is long overdue. Carsharing is one tool that can help to bring us into a smarter and more cost-effective era of mixed mobility options. Portland-based Flexcar, as the oldest and second-largest carsharing operation (behind Boston-based Zipcar) in the US, is a good example of a successful model of for-profit carsharing.

What is Carsharing?

Carsharing is essentially a fleet of vehicles, mostly cars and vans, which are owned and operated by a central body known as a carsharing operation (CSO). The system is intended to intensify the use of cars which are underutilized and estimated to be parked 95% of the time. In doing so, various social and environmental benefits emerge, such as a reduction in demand for all the infrastructure needed to accommodate cars, both mobile and stationary, as well as a reduction in greenhouse gases, and the incentive to redesign communities with other mobility options in mind. For carsharers, the system is intended to transfer the costs of owning, operating and maintaining a car to the CSO for those who do not depend on cars for daily use (usually estimated as those who drive less than about 12,000 km per year). It fits into an emerging paradigm among manufacturers which states that ownership of certain large capital-intensive goods or appliances is more environmentally responsible and cost-effective if less of these goods are made and use of them is shared, rented, leased, etc. instead of owned (see below). Through carsharing, users are rewarded for using a car when they need it and are not saddled with the responsibility car ownership involves, such as insurance, maintenance, parking, and gas. 

There is sometimes confusion over the term “carsharing,” as it is sometimes mistaken for carpooling or car rental. Carsharing is different from car rental because:

  • Reservation, pickup, and return are self-service.
  • Cars can be rented not only by the day but by the hour.
  • Carsharing works on a membership basis, where members must first go through an approval process (background driving checks) after which a payment mechanism is established.
  • Members must pay annual and/or monthly fees.
  • Car locations are distributed throughout the service area.
  • Rates include insurance and fuel costs.
  • The reservation process is streamlined (usually by internet, phone, or increasingly by mobile phone) and is simple, unlike the more paperwork-intensive process of rental agencies.

Although there is a great variety of possible ways carsharing operates around the world, CSOs generally share these elements:

  • One or more shared vehicles available to all members.
  • Vehicles are accessed on an as-needed, self-service basis.
  • Reservations are usually booked in advance, but there is some flexibility depending on availability and back-office software for last-minute reservations.
  • Both short-term (increments of one hour or less) and longer-term rentals.
  • Locations where cars are picked up and dropped off, known as “pods.” Smaller CSOs may have one or two locations, while larger ones may have a larger network of locations around the region.

Basically, the distinction between rentals and carshares is that the latter is an alternative to car ownership and not simply a replacement for when the owner’s own car in the shop, or for car owners visiting another city. Studies (see below) provide supporting evidence for people who become carsharing members either selling their car or choosing not to buy one in favor of sharing.

CSOs may be for-profit, non-profit, public agencies, or cooperatives, and there is much debate and strong arguments in support of each of these models. In North America, there are more not-for-profit than for-profit CSOs; however, for-profit CSOs are capturing a larger market share. There are many reasons for this, for example, non-profits may be more organizationally limited and have more modest goals, while commercial operations would be more entrepreneurial and aggressive about expanding their markets. (In fact there is concern among not-for-profit or cooperative CSOs that they will not be viable in a more aggressively competitive market. See more about this in Not-for-Profit vs. For- Profit Carsharing below). The market trend in Europe has been toward increasing consolidation of for-profit carsharing and the same trend is predicted for North America, which has seen competition heating up between the largest companies (see recent developments below).

Although there is a great variety of operational procedures, carsharing essentially follows the above standards, though there are some differences, including deposits (some providers have one-time buy-in fees ranging from $25 to $115), monthly fees ($10-$20), and annual membership fees ($35-$100), and mileage (some have unlimited mileage while others have a limited number of free miles).

Technology is another important aspect of carsharing, as flexibility and streamlined reservation processes are important features of its appeal. Most use some level of electronic and wireless technology.

Insurance remains an industry-wide obstacle, especially since 9/11 and the resulting shift toward higher insurance premiums.  As well, because of the insurance challenges for younger drivers, the age limit for carsharing members in the US is 21 (25 in Canada). This limits the potential for partnerships with universities, for example, though there is interest among CSOs in finding a cost-effective insurance solution that allows those under the age of 21 to become members.

There are some demonstrated examples and aspirations among CSOs for partnerships, i.e., with public agencies supplementing their fleets, or partnerships with universities, for example (if the issues described in the preceding paragraph are resolved).

The History of Carsharing

Carsharing has existed in various forms for the past 60 years (mostly in Europe), but the concept did not “take off” until the 1980s and 1990s.

Carsharing in Europe has a more established history than anywhere else in the world, with the first recorded example appearing in 1948. Setting up the Zurich, Switzerland-based cooperative “Sefage” was mainly motivated by the economic interests of a group of people who wanted the benefits of automobiles but couldn’t afford them. Other notable experiments were the French “Procotip” in 1971 and the Dutch “Witcar” in 1973.

Before the 1980s, European carsharing was experimental and local. Most of these were smaller, non-profit operations in Switzerland and Germany. These early CSOs were grassroots, community-based projects that found it difficult to make the leap to becoming viable businesses, and many failed or were subsumed by larger organizations. The idea began picking up steam in the mid- to late-1980s. Until the late 1990s, most European CSO start-ups were publicly (and occasionally privately) subsidized.

Switzerland is often credited with spearheading the launch of “mainstream” carsharing in 1987 with Mobility Carshare, which now has 50,000 members. At around the same time other operations began to emerge, such as Statt Auto in Germany, and Greenwheels in Holland and several operations in North America such as Commun Auto, Auto Share (both in Canada), Flexcar, and Zipcar (in the US).

Just before the launch of Mobility Carshare, two US-based demonstration programs began with Mobility Enterprise (a Purdue University research project) and Short-Term Auto Rental (STAR) in San Francisco, which both began in 1983 and ended in 1985-86. Then in 1994, carsharing in North America re-emerged in Canada with CommunAuto (then Auto-Com) in Montreal, a cooperative that later became commercial, followed in 1997 by Cooperative Auto Network and Victoria Carshare and Dancing Rabbit Vehicle Cooperative in the US.

By 1998, there were four CSOs in Canada and four non-profit CSOs in the US. In North America, since 1994, some 40 carsharing programs have been deployed, 28 of which were in urban areas (12 have since gone defunct) with more being launched, along with public-private partnerships or variations on the carsharing model by car-rental agencies or other businesses. Lufthansa, Swissair and Volkswagen are all corporations who have developed their own spin-off models for their employees.

Carsharing in North America has tended to look to the European experience for guidance in the sector, despite the fact that North America will never totally replicate what has gone on in Europe since the two regions have different histories, urban infrastructure, needs and conditions. However, the general trend for carsharing in Europe is toward increasing consolidation of the sector, and North America is expected to follow suit. 

Currently in North America, 95% of the carsharing market is occupied by the three largest providers. Zipcar is the largest, with 40,000 members in 21 cities, while Flexcar is its closest competitor with 28,000 individuals and some 500 companies. There is little difference between the two companies except that Zipcar’s insurance coverage is lower and there is a slight difference in image. (Dave Brook describes Flexcar as the dependable “you can count on it” service and Zipcar as targeting a little younger and “hipper” market). Both have received substantial investments in the last few years.

Worldwide, there are currently 300,000 individuals who belong to CSOs.

Not-For-Profit vs. For-Profit Carsharing

This section is based on a telephone conversation with Tracey Axellson of the Vancouver-based Cooperative Auto Network, a not-for-profit CSO which also does outreach, information sharing, education and advocacy on the carsharing model.

Tracey emphasizes the distinction between “non-profit” and “not-for profit.” In other words, as a cooperative, the Cooperative Auto Network does charge fees and earns money but as a cooperatively owned organization with shared assets (and risks) among members, it is not a commercial profit-making venture in the same way Flexcar and Zipcar are.

She believes the marketing strategies of commercial CSOs fall outside of the sphere of sustainability because the competitive nature of these companies prevents them from sharing information and expertise with other CSOs and ultimately in squeezing other, less commercial CSOs out of the market. For her this goes against the philosophy of carsharing: cars to be “shared” under a collective of owners with a common stake in them. As well, she questions this model as the best way to democratically bring another option to the transportation mix if these choices are ultimately dominated by two or three for-profit ventures. 

Moreover, she questions whether the for-profit CSOs serve another major purpose of carsharing, which is about encouraging people to drive less in favour of other sources of transportation. This is because one main difference between more commercial CSOs and cooperatives/not-for-profits is the former’s “decoupling of mileage and hours.” In other words, Flexcar offers hourly only rates, which does not send the complete price signal to the driver the way it would be when mileage is extra. She explains that when mileage is extra, as not-for-profit CSOs tend towards, people tend to do “trip bundling,” where they will accomplish as many errands as possible in the same place in order to save mileage. This results in smarter driving choices and encourages people to use the car more efficiently and judiciously. 

She believes the cooperative is an ideal model because the fleet of cars becomes a “commons” or communally owned resource. Given the high risks and capital costs associated with carsharing, assets are shared and risk for any individual is minimized. 

More information about Cooperative Auto Network can be found on its website at

Partnerships and Replication

The carsharing sector has taken advantage of various types of partnerships, and as well, various companies and car rental agencies have been influenced by the model and set up their own small-scale projects both in North America and Europe. These alliances often lead to complementary marketing strategies which target certain markets. 

Local transit authorities and municipalities throughout the US have beefed up efforts to bring carsharing opportunities along public transportation routes (i.e., Atlanta, New York City, Washington DC and the Bay Area). Municipalities have also provided public funds for start-up costs to new CSOs, or offer other incentives, such as Portland’s quota of free parking available around the city to carsharing members (although, due to lost revenues from metered spaces, the city is rethinking this in the face of the recent growth of the carsharing market).

For automakers, certain laws may act as incentives. For example, revisions to the California Zero Emissions Vehicle Mandate (ZEV) would award automakers additional ZEV credits for placing clean fuel vehicles into shared-use systems. 

For housing developers, the mutual benefit with CSOs is realized through parking variances that allow them to construct more housing with fewer designated parking places, for which developers would benefit financially. For their part, CSOs stand to receive increased market share from residential communities. Examples of this include City Carshare partnering with developers to locate vehicles in a tenant garage or Zipcar launching carsharing services at an elderly home. 

A Few Statistics

A study published in November 2005 (Shaheen, Cohen & Roberts) revealed the following: 

In 2001, a whopping 92.1 % of US households (78.2 % in Canada) owned at least one vehicle, and over 60% of US households (36% in Canada) owned two or more vehicles. Predictably, transportation amounts to the second and third largest consumer expenses in the US and Canada respectively (19.1% of total household income in US and 13.66% in Canada). 

Canadian studies/member surveys suggest that 15-29% of carsharing participants sold a vehicle after becoming members and 25-61% delayed or cancelled plans to buy a new vehicle. US studies and surveys suggest that 11-26% of members sold a vehicle and 12-68% postponed/avoided car purchases.

Obviously location specific variations exist for all these statistics. A reduction in private ownership means fewer vehicles/km travelled (VKT) and increase in public transportation ridership. VKT is down 7.6-80% of a member’s total VKT in Canada and the US averages a 44% reduction in VKT per carsharing user across North American studies. Carsharing members also report a higher degree of environmental awareness after joining a carsharing program. 

US and Canadian data also show that each carsharing vehicle removes 6-23 cars from the roads. European studies show that 1 carshare car reduces the need for 4-10 private cars. While this may sound suspect, a National Personal Transportation study was cited in “The High Cost of Free Parking” by Donald Shoup stated that the average privately-owned car is parked 95% of the time, which highlights the potential to intensify the use of cars, which would render many of them redundant.  

It is estimated that the maximum mileage up to which carsharing is cost-effective is 10,000-16,093 kilometers/year; in other words, private car owners with mileage below these numbers can expect to have higher expenses than their carsharing counterparts who drive the same amount. 


There is less potential for carsharing to work in already suburbanized areas because locations for pick-up and drop-off would be less accessible. In other words, carsharing works best with individuals who have access to other transportation options (which would then encourage use of those other options). 

There is an experimental project in Berlin which is a suburban car-sharing model where privately owned cars could be put into an existing carsharing fleet for a couple of days and shared with CSO operators.

Relevant Concepts

The New Mobility Agenda is an emerging paradigm in transport policy which takes a broader systemic approach to transportation issues. Transport “efficiency” is traditionally interpreted in narrow engineering terms, as in speed and volume of the vehicle throughput. New Mobility, on the other hand, emphasizes resource efficiency, public health, public spaces, quality of life and social justice. It proposes a “bouquet” of overlapping alternatives that supplement the car-oriented social and physical infrastructure that characterizes industrialized cities, such as carpooling, carsharing, high-occupancy vehicle lanes, bus lanes, and bike trails, as well as eliminating the need to commute altogether by encouraging telecommuting. It also emphasizes the short term, even 2 to 4 years. While not ignoring the longer term, it focuses on short- and medium-term solutions in response to municipal electoral periods, and an increasing urgency to find solutions now to transportation issues. 

New mobility focuses on clustering of intermodal and conventional technologies, information technologies, creation and management of partnerships, and market incentives, to create economically attractive alternatives to automobile ownership.

“Old Mobility” is characterized by hierarchy and the reliance on experts and engineering, technological and infrastructural solutions for increasing speed and throughput capacity in specific links and key points, such as bottlenecks. In other words, it espouses “forecast and build,” with the assumption that the only limiting factor in providing more capacity increases within the system is public funding. 

A disruptive technology is a new technological innovation, product, or service that eventually overturns the existing dominant technology or product in the market. According to Susan Shaheen’s report, “Carsharing and Mobility: An Updated Review,” the developing technology (such as computer chips, smart cards, GPS and other communication/ information services) characterizing newer CSOs are “system innovations that transform ‘eras’.” She writes:

Three major system innovations have transformed transportation in the past two centuries, with profound and far-reaching impacts. First came the widespread adoption of inter-urban railroads in the mid 1800s, several decades later came the introduction of electric urban rail, and then automobiles in the early 1900s. Railroads transformed the nature of business; electric rail transformed collections of neighborhoods into metropolitan regions; and the automobile transformed lifestyles. These innovations not only shaped transportation, but also much of our society. The next transportation era will reflect the integration of information and communication technologies into lifestyles and modal choices. The catalysts of these three earlier transportation transformations were the steam engine, electricity, and internal combustion engine (respectively); the catalyst for the coming era of "smart transportation" will be electronic and wireless communication systems.

Selling “services” instead of goods: This is a new industry paradigm described by Lovins and Hawken in Natural Capitalism (and elsewhere). It emphasizes providing services or functions instead of the products themselves. This is based on the recognition that consumers don’t always want or need the products, but the services or functions they provide. In fact, consumers may not want the cost and responsibility of ownership, but do not question this because of cultural assumptions that there is no other way to access these services, and so are forced to buy appliances since the conventional economy is not designed to provide alternatives to ownership. Some examples of services companies are providing now are “cleaning” (rental of vacuums, mops, buckets), “warmth” (rental of heaters and fans), “lighting” (rental in an office of fluorescent lights). This is a “win-win model” because it is both a business opportunity and a cost-effective option for consumers. Carsharing also naturally falls under this category. 

The History of Flexcar

Dave Brook is a transport and social engineering consultant and founder of Flexcar’s predecessor, Carsharing Portland (today Flexcar’s CEO is Lance Ayrault). A self-named “serial entrepreneur,” he had been involved with the energy products business, promoting and publicizing energy efficient technologies. Through his work he began to notice that although there was interest in energy efficiency for financial and environmental reasons, as he says, “no one seemed to be talking about energy and transportation.” 

He had heard about carsharing in Europe and the concept intrigued him for its ability to reward people for doing the “right” thing as opposed to market signals in a globally competitive economy which have come to reward destructive behaviour. He was also interested in its ability to encourage people to rely on other transportation options besides driving, therefore reinforcing the many other choices available to those without cars. From this followed a series of public meetings, and the launch of a feasibility study, which included public opinion surveys and focusing (to gauge consumer demand), as well as cost-benefit analysis. There was also considerable discussion as to the best approach to take (i.e., cooperative, for-profit or non-profit). Brook strongly supported the for-profit model, and so Carsharing Portland became the first commercial carsharing service in the US.

While this was going on in Portland, a public-private partnership was developing that was led by neighboring Seattle’s transit authority, King County Metro and the City of Seattle. Flexcar emerged out of this partnership. In the year 2000, it acquired Carsharing Portland and has continued to expand ever since. Today, Flexcar has 35,000 members nationwide and operates in seven cities (Seattle, Portland, Los Angeles, San Diego, San Francisco, Chicago, and Washington DC). 

How Flexcar Works

Flexcar’s application process is relatively straightforward and can be completed online. All applicants pay a one-time membership application fee of $35. There is an annual $40 membership fee. After completing the application, there is a five- to seven-day wait while a background driving and credit check is completed. Members must be at least 21 years of age and have five years’ driving experience.

Much in the same way that mobile phone service providers have different plans for different types of users, Flexcar also offers several different plans depending on how frequently members intend to use the service. While rates vary according to location, the standard plan in Portland for members who plan to use a vehicle less than 10 hours per month does not include a monthly fee, and users are charged an hourly rate of $9 for unlimited miles, going up to $60 for the full day. Several other plans are available for heavier users, with monthly rates increasing with use but reduced hourly rates. All rates include gas, insurance, maintenance, etc. Members are expected to fill up the tank if it is less than a quarter full, but Flexcar pays for the refill and credits members who do so for their trouble. If a vehicle is not returned by the scheduled time, a high fee is charged, since it may interfere with other drivers' reservations. 

Members reserve cars by web or telephone, or increasingly by mobile phone. After making a reservation, members receive confirmation where the nearest cars are available. Each member is given a “smart card” with an imbedded computer chip that unlocks the door. The keys are stored in the glove compartment. Vehicles must be returned to their home location, which is known as two-way service. Currently, there is no one-way service, where cars can be picked up and dropped off at different locations, although developments in technology might allow this service to be available in the future. 

About 40% of Flexcar’s national fleet is hybrid vehicles (Civics, Priuses, or Accords). Other models include sedans, pickups, SUVs, minivans and sports cars. In 2003, the company became carbon-neutral through a partnership with American Forests, in which trees are planted to offset its carbon emissions. Flexcar nationally has won at least 11 awards, notably the Environmental Excellence Award by the Association of Washington Businesses.

A substantial portion of Flexcar’s members are businesses, including the Nature Conservancy, Starbucks and Nike. Flexcar offers business plans, as with the individual plans, an array of choices based on Flexcar’s analysis of the company’s needs. Before making a contract with an organization, Flexcar completes a complimentary “mobility analysis” which determines, for example, how the company uses cars to accomplish its goals by looking at costs, unmet needs and challenges. Sometimes the analysis will identify whether some cars in the company’s existing fleet, if it has one, could be more profitably replaced with a shared car. Based on the results of this analysis, Flexcar develops a proposal and estimate of costs. The array of plans for companies include shared vehicles, semi-exclusive vehicles (where businesses have exclusive access to designated cars during business hours), and exclusive (where businesses have 24-7 access to designated vehicles). 

Creative Partnerships and Collaboration

In addition to the individual and business plans, Flexcar actively collaborates with organizations, agencies and companies on various mobility projects. Some organizations offer their employees free Flexcar membership and use during the business day in exchange for their turning in their parking pass (this gives companies the opportunity to save money on parking spaces for staff). Flexcar also works with public transit authorities in its location cities to find incentives to motivate employees to leave cars at home, such as through the Portland region’s Employee Commute Options (ECO), which obliges employers with more than 50 employees at a single location to provide incentives for alternative commute options. In addition, there are also partnerships with transit authorities around the country to have Flexcars parked near Metro stations.

For planned buildings currently seeking LEED certification, Flexcar offers LEED credit for plans which include parking spaces designated for hybrid Flexcars. There is also a vanpooling option where a Flexcar van starts at the home locations of a given group of employees and ends up at their place of employment, where it is then available to members for use during business hours. This is part of an ongoing plan to jointly serve individual commuters and fleets during work hours in order to intensify the use of cars. 

One example of a partnership with another carsharing company is Flexcar’s collaboration with Chicago-based I-Go. I-Go uses Flexcar’s technology for unlocking doors and identifying drivers, while Flexcar members can make use of its cars. This is similar to a “franchiser-franchisee” relationship.

Recent Developments

In Europe and the US, commercial carsharing competition is heating up. There have been some major boosts to the visibility of both Flexcar and Zipcar due to acquisitions by venture capitalists of Flexcar and Zipcar, which has pumped both with investor dollars.

In April 2005, controlling interest (60%) of Flexcar was obtained for an undisclosed sum by an investment group called Revolution, led by AOL co-founder Steve Case and celebrity auto executive Lee Iacocca, who will have a smaller stake in the company. As quoted from Revolution’s website, it “seeks to drive transformative change by shifting power to consumers.”

It also describes several other aspects of its vision which are relevant to our interest in business cases:

Many industries are on the brink of disruptive change, and we aim to build insurgent companies to capitalize on the emerging opportunities. Consumer needs are often not being met, usually because the incumbent companies are risk averse, looking to defend the status quo, and reluctant to embrace new approaches. Opportunities for innovative new products and breakthrough ways of doing things are thus left undiscovered, under-financed, or undone -- and consumers are left under-served.

Change will come, and we aim to accelerate it. Tipping points can be postponed but they can't be stopped. Revolution focuses on building companies that can hasten tipping points and benefit from change…. [emphasis added]

This investment money gave Flexcar the means to work toward its near-term goals of doubling its fleet of 450 cars and expanding into up to five new cities in 16 months, with the hope of doubling its membership to 60,000 by the end of 2006. This will allow Flexcar to increase its cars and locations by 50% in Washington, Los Angeles and San Diego, in addition to the 350 cars in five cities already added. 

This development occurred just over a month after Flexcar’s primary competition (Cambridge, Massachusetts-based Zipcar) raised $10 million and announced an aggressive West coast expansion that includes Seattle, Portland and San Francisco. The investment from Case, Iacocca, Bristol Bay Native Corporation and an undisclosed fourth investor surpassed Zipcar’s $10 million dollars. 

On April 29, 2006, Flexcar set a single-day record for nationwide usage, two weeks after its previous record. 

The Future of Carsharing

In carsharing’s short history, the technology it relies on has evolved quickly. When Flexcar was still Carsharing Portland, the method of reservation was still done by clipboard, pen and paper. Today, many CSOs use chips imbedded in swipe cards to automatically unlock doors, and automated systems to keep track of billing and reservations. Meanwhile, automated vehicle location technologies track fleets over cell communications or radio frequency networks, which can improve customer service, billing, and security. However, technology can be expensive in an already capital-intensive industry. This means that the investment needed for the technology alone (besides the insurance and financing for the cars themselves) puts pressure on CSOs to expand in order to pay off these capital investments. Once better technology allows for one-way rentals (where cars are picked up and returned at different locations), this could be a major “disruptive technology” that changes people’s choices, because it will increasingly fit into people’s lifestyles. 

Many questions remain about how big an impact carsharing will have on overall car usage, infrastructure investments, air quality and other social and environmental costs. Will automakers support or sabotage the growth of carsharing? Will increasing consolidation of commercial CSOs lead to a monopoly among CSOs or even automakers? Culturally, how many people are willing to let go of the assumption that they must own a car, and would be willing to share one? How much convenience are people willing to sacrifice for reduced costs? Will it ever become more than a niche market? Will it ever generate significant economic, ecological, and transport benefits? 

EcoTipping Points Analysis

Ecotipping Points are levers that switch environmental decline to a path of restoration and sustainability. They’re catalytic, setting in motion a cascade of far-reaching changes. But it takes more than that. And here we come to the crux of the matter: It’s all about feedback loops. When environmental decline is driven by vicious cycles, the decline will be turned around only if the vicious cycles are themselves turned around.

Carsharing could help to reverse the vicious cycle of sprawl and automobile congestion so characteristic of urban growth today – a cycle driven by interconnected and mutually reinforcing feedback loops like those in the diagram below:

  • More cars > Greater capacity to live far from work and urban centers > More sprawl > More need for cars > More cars
  • More cars > More sprawl > Less alternative transportation > More need for private cars > More cars
  • More cars > More traffic congestion > More demand for car-related infrastructure such as parking garages, parking lots, and highways > Construction of more car-related infrastructure > People encouraged to have more cars > More cars
Flexcar Negative Loop

Turning this vicious cycle around isn’t easy. It’s powerful. But sprawl and congestion will be turned around only if the feedback loops responsible for the process are themselves turned around. Carsharing could help to do this by connecting to the feedback loops in several ways to give them a kick in reverse:

  • Provide an alternative to private cars.
  • Reduce traffic congestion.
  • Reduce the need for car-related infrastructure.
  • And with streamlining of the reservation and billing process, carsharing could link with other transportation options such as foot, bicycle, and public transport to make all of them together a more viable alternative to private cars.
Flexcar Positive Loop

The impact of carsharing alone would probably not be sufficient to turn sprawl and traffic congestion around. However, a comprehensive alternative transportation package that includes carsharing might connect to the vicious cycle in enough ways and with sufficient force to make a substantial contribution toward reversing it. Once reversed, the very same feedback loops can work just as powerfully to drive change in a healthier direction. And as we’ve seen with EcoTipping Point success stories that have had time to play themselves out, the reversal spins off new feedback loops of “success-breeds-success” that accelerate the process and lock in the gains.


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