Car-sharing is beginning to take hold in Chinese cities, and can help reduce car ownership, congestion, and air pollution. Photo via gaoloumi.com.

Car-sharing is beginning to take hold in Chinese cities, and can help reduce car ownership, congestion, and air pollution. Photo via gaoloumi.com.

China’s increasing overall wealth makes it unlikely that the country’s growth in car ownership will stop any time soon. However, severe air pollution and traffic congestion have led several large Chinese cities to take action to stem the rising tide of private cars. For example, six Chinese cities – including Beijing – have implemented license plate control policies. Other transport demand management strategies such as congestion pricing are widely considered, as well. As part of a broad strategy for achieving sustainable urban mobility, car-sharing can help reduce the number of cars in Chinese cities while meeting the middle class’s increasing demand for personal mobility.

Car-sharing, one of the fastest growing urban mobility innovations worldwide, did not exist in China in 2009, but is quickly becoming more mainstream in Chinese cities. The global car-sharing market has an estimated value of US$ 1 billion, with 272% growth in the number of car-sharing vehicles between 2006 and 2012. In the United States, one car-sharing vehicle is estimated to replace between six and 23 cars. According to a recent market research report, car-sharing in China is expected to grow by about 80% annually for the next five years, with total vehicles reaching 16,000 by 2018 if the government offers strong support to the industry. Though this number is small compared to the more than 120 million cars owned in the country, it creates an important foundation for China’s car-sharing industry.

The rise of station-based car-sharing in China

Car-sharing is still emerging in China, and in 2012 there were only two car-sharing operators (CSOs), with a total of 39 vehicles in Chinese cities. Today, China’s car-sharing network has grown to a total of 1,000 vehicles with five active operators in Beijing, Hangzhou, Wuhan, Shenzhen and Changsha.The composition of CSOs in China has evolved from domestic start-ups that operate independently from government or established rental car companies to a mix of municipal governments and foreign and domestic vehicle manufactures.

Among these CSOs, Eduo Auto and Evnet are more established, while Weigongjiao and E-car receive government support and operate only electric vehicles. E-car plans to expand to at least 3,000 vehicles during 2014. Weigongjiao, which means “mini-bus,” creatively uses vending-machine-like parking garages with electric vehicle charging infrastructure. It plans to increase its fleet to 100,000 cars in the next four years. Finally, Car2Go is the first car-sharing program supported by a foreign original equipment manufacturer (OEM) in China. Launched in Shenzhen in February 2014, it is operated by the international CSO Car2Share, and is currently piloting its first project.

The emergence of private peer-to-peer car-sharing

Peer-to-peer (P2P) car-sharing has existed in China for less than one year, though it has been operating in North Amercia for more than a decade. P2P companies provide a platform for members to rent vehicles owned by other members in the network. Car-sharing experts like ZipCar founder Robin Chase regard P2P car-sharing as the next revolution in the car rental industry, as it can cheaply mobilize unused resources to provide vehicle access across a wide area.

Two of the most notable P2P companies in China are PPZuche and ATzuche. PPZuche has been growing by 50% per month since its launch in Beijing last November. It now operates in Shanghai, Shenzhen, and Guangzhou with over 20,000 members. ATzuche began operations in Shanghai in June, and has already received attention due to its comprehensive service package, innovative vehicle tracking, and remote keyless entry device that can plug directly into cars without any vehicle modification. Still, these companies face questions regarding the liability of vehicle owners and the legitimacy of renting personal vehicles for commercial use.

What role will car-sharing play in the Chinese cities of the future?

There are multiple challenges facing the car-sharing industry in China. Cultural preference towards car ownership may make car-sharing less appealing in China than in other countries. It may take time for CSOs to develop an operational scheme that suits Chinese cities, and for city leaders to create supportive policies such as on-street parking for shared vehicles. Some local governments have supported electric vehicle car-sharing programs, though most governments are generally unaware of car-sharing as a potential sustainable transport solution.

Businesses in China are innovating to create locally viable vehicle sharing programs that may reshape private vehicle usage in the largest vehicle market in the world. As the industry evolves, support from city governments through policies such as dedicated parking for shared vehicles and exemption to vehicle license restrictions will be vital to the industry’s growth. It is also important for CSOs and researchers to demonstrate the benefits of car-sharing services. If more governments can provide an accommodating policy environment, the rise of car-sharing programs in China could be part of a strategy to make cities more sustainable and livable while minimizing car ownership.