8 Factors You Need To Consider When Starting A Car Sharing Company

Car sharing is one of the best ways for cities to cut down on traffic and pollution, encourage healthy options for transportation and empower local economies. The biggest challenge when it comes to car sharing isn’t starting a massive fleet (although that does take effort) or even getting people in your community to try it, it’s figuring out the business model. There are many different factors to consider, including how you’ll charge users, whether there will be a membership fee, and what happens if someone damages the vehicle. However, before you jump into developing your wheels of steel shared cars, think about these eight critical factors.

Business Model

Your car-sharing business must have a sound and profitable business model underpinning all activities. You do not want to spend a lot of time and effort on a carsharing business model that will not make money. If no business model is underpinning your startup, your carshare company cannot survive. This is one essential factor most carsharing companies such as Avail put into consideration.

What’s Your Car Sharing Business Model?

When you start from the top down, it becomes clear that you have some choices when starting a car-sharing business. In general, you can choose between offering hourly rentals or setting rates for memberships.

car sharing

Assets And Liabilities

The majority of carsharing service providers are corporations, so they have capital assets in the form of vehicles and liabilities in the form of loans to finance these assets.

Operations And Management

How often will drivers take their shared cars in for servicing? How will your company procure cars? What policies must you comply with to meet legal requirements?

Fleet Size

You decide how many shared cars you’re going to need to serve the members within your market area. The number of shared cars you choose can depend on several factors, including what kind of service area you plan to cover, consumer behavior, expected membership turnover rates, and competition from other car share companies. Consider carefully who you want to target as potential members.

Car Brand

Consider brand image when choosing your company’s fleet of cars. What do other consumers think of the major brands? Are there any brands that are common in other cities but not in yours? Does this matter to you, or does it affect your business model at all? Make sure you have a good plan for maintaining the car models you choose.

Membership Fee

How much will be enough to keep your company afloat if you charge a membership fee? Some car share companies ask for a membership fee. In contrast, others waive fees entirely by charging drivers via their credit cards to cover insurance and gas costs instead. Is there value in waiving the membership fee altogether? Research what other car-sharing companies are doing to answer whether or not charging a membership fee is worth it.


It’s one thing to have coverage in case your fleet gets stolen, but what about damage caused by drivers? The biggest hurdle for car-sharing companies to overcome is ensuring that they’re fully insured. The consensus is that you need comprehensive insurance that covers all types of damage, including vandalism, collisions, and liability for injuries or property damage. While it may seem like just another cost, in the long run, getting set up with full coverage will save you money in legal fees and other charges in the event of an accident involving one of your vehicles. Additionally, since many states require proof of financial stability (or proof that you can pay for hefty charges on your own), you must provide proof of adequate insurance.

It should be noted that carsharing or other types of carsharing are an excellent way for individuals to rent a car from a company and drive themselves, whether it’s for a business meeting, an errand run, or maybe even just going out on the weekend. Consider the factors mentioned above when beginning your own.

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