Is Zipcar really that good for the environment?

By Katie P.

Many people hail the car sharing company Zipcar as a great environmental innovation. Zipcar themselves tout their own horn on their Green Benefits page. At first glance, this sounds intuitive: carsharing = less cars per person = less gas and energy used = good for the environment. Right?

Not necessarily.

Do people drive less? Probably not.

A major assumption is that upon joining Zipcar, users drive vehicles less than they otherwise would have. Zipcar dances around this statistic by saying that “90% of our members drove 5,500 miles or less per year. That adds up to more than 32 million gallons of crude oil left in the ground—or 219 gallons saved per Zipster.” With average fuel efficiency of 23.3 mpg of an American vehicle, that equates to a reduction in 5,102 miles travelled per user.

This seems highly suspect. Zipcar’s service appeals most to two types of individuals: someone who owns a car but uses it very infrequently and someone who cannot afford to own a car but would like access to one.

For those that rarely used their car before, they switched to Zipcar because the cost per hour is less expensive than owning it themselves. There does not seem to be a direct mechanism inherent in Zipcar that necessarily leads to those individuals driving significantly less than before. The only indirect one may be in the decision-making processes of per hour pricing better reminds users of the price of car usage (rather than one-time sunk investment) and encourages the use of alternatives.

For individuals who could not afford a car before, they may now be using a personal vehicle more frequently than more energy-efficient public transit. This actually makes Zipcar’s impact on the environment actually negative.

Are there fewer cars that need to be manufactured? Yes, but it doesn’t impact GHG emissions much.

Another lever that could improve the environment is that Zipcar reduces the number of cars that need to be manufactured to support car-mile demand. Zipcar claims that each “Zipcar takes 15 personally-owned vehicles off the road,” which sounds fantastic. However, this does not match other statistics they have published. In a study of new users in 2008, about 43% of new users owned a car in the five years before joining and about three quarters of those individuals no longer had a vehicle in their possession after signing up for Zipcar. By this approach, Zipcar only takes three cars off the road.

Even assuming the higher number vehicles reduced, the manufacturing of a vehicle is a very small amount of the energy consumed in its lifetime. A study at UCLA showed that across a wide variety of car types, the usage of vehicles was the dominant driver of automobile GHG emissions from cradle to grave (i.e. the purple bars in Figure 1). Therefore for the reduction in vehicles required for manufacture is by itself is not likely to drive much environmental impact.

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About macomberjohnd

HBS Finance faculty interested in sustainability in the built environment including devices, structures, townships, and cities.

4 Responses to “Is Zipcar really that good for the environment?”

  1. By John Macomber

    My real estate perspective is that Zipcars and similar sharing services conserve parking spaces – and that’s material. If a city dweller has structured parking at home and structured parking at work that’s about 600 SF of space (including circulation) – about the size of three offices or half an apartment. If those spaces don’t have to be built or conditioned or maintained it’s a substantial savings. In many suburban office parks, where there is surface parking, there are more SF set aside for cars than for people.

    If the footage is not set aside to store idle steel, it can be used for offices or retail or manufacturing or housing. This leads to increased population density which leads to more vitality in the city and also to more effective deployment of public transportation, which typically is pretty easy to scale up once the trunk routes are built.

    I agree that Zipcar doesn’t save that much CO2 in driving. The effects are 2nd order.

    Uber, Lyft, and other services, however, also optimize routes and optimize idling time and maximize utilization of the asset. Waze-like optimization at a larger scale than one-rent-a-car-at-a-time could also be significant.

  2. I completely agree with this post. I think Zipcar is a fantastic company, and as a consumer who hasn’t owned a car in over 5 years, I use Zipcar often. That said, the use of Zipcar is not actually decreasing my footprint. I don’t drive less than I would before, in fact, I drive more than if there wasn’t a Zipcar option. Instead of taking the T to grocery shop or hopping on a bus to go to IKEA, I choose to use Zipcar because it’s easier and more convenient. I am also usually going alone and not carpooling with another person so I’m not splitting my gas or emissions with other people. Finally, since I’m usually trying to move things around, I’ll often select one of the less-efficient vehicles, such as an SUV, to aid in the process.

    That said, there are second order effects such as those mentioned by our Professor. I think it’s very important, as we discussed with Airbnb, to determine what the apples-to-apples comparison would be between the all-in manufacturing, construction, CO2, and decrease in driving effect would be before and after Zipcar.

  3. I agree with Katie’s point here and this post makes me relate to the concept of risk homeostasis or the risk compensation theory. As I think more and draw the analogy, the climate situation becomes more and more scary, as the increased efficiency would actually cause more average personal carbon footprints.

    https://en.wikipedia.org/wiki/Risk_compensation

    This is scary because it might take generations in order to establish the “baseline” personal threshold on personal perceptions on carbon footprints, however the current climate situation would not tolerate that.

    Also, people usually have one single most important metric for a decision making process. For example, in terms of a shared car service, an efficiency improvement is a positive force for the cost metric but make no material difference on the carbon footprint metric. Assume that the cost is the major decision making metric and if the risk compensation theory stands, then people will use more car travel with Zipcar than they would if they own a car, resulting in a net cost reservation and carbon footprint augment.

    So in the end, we have increased utility (in terms of either cost reduction or more travel), but likely an increased carbon footprint along with that. In order to change the utility function, perhaps another concept rather than shared services need to be done.

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