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The Fundamental Components of a Car Sharing Business

If you’re thinking about starting your business and have already considered entering the car sharing market, you’ve probably done a lot of research. In case you haven’t or if this idea is completely new to you, we suggest you take a look at this article, which will help you understand better what is involved in this line of business.

Why should you consider it?

To begin with, there is an increasing demand for this type of service. Actually, many car manufacturers are worried that the traditional model of car ownership will soon cease to exist, at least in the form we are familiar with. On the other hand, the concept of car sharing is simply using various trends that work in its favor. To begin with, with more and more people moving to cities to live and work, the problem related to finding parking has aggravated. 

Next, younger people are not so obsessed with owning a car and would rather enjoy the comfort of not having to think about maintenance and registration, but still be able to use a car whenever they need. Finally, it can make sense from the financial point of view to rely on companies providing car sharing service, especially if people don’t cover great distances on a regular basis.

The market

Like with all relatively new and potentially profitable ideas, there is a risk of entering a saturated market or being unable to provide products or services that stand out. That’s where some universal business rules need to be applied. You first need to see whether the market you’re interested in already boasts a number of similar companies. 

Then, you need to know how much they charge and what benefits they offer. This is important because you need to offer something extra for the same price or the same quality of service at more affordable prices. Finally, you should identify you niche, e.g. users whose needs are not being met at the moment and cater to them.


To be able to offer a great car share experience, you need to ensure you have the right tech, which would allow your customers to enjoy your offer. We’re talking about keyless entry and ignition systems for customers to access the vehicles, GPS systems for tracking vehicles, a website and mobile portal for information and transactions, as well as a billing engine for managing accounts and payments and a fleet management tools for scheduling use and maintenance. When budgeting, you should envisage around $1,500 per vehicle on hardware and an additional $50 a month for hosting and support, but these costs may vary too.

Cost structure

Probably the most important thing to get right is the cost structure. Namely, the costs incurred by car sharing can be substantial, since there are many of them simply can’t be envisaged when making a plan. However, you need to do your best to encompass as many costs as possible, starting with employee salaries, office utilities, fuel, vehicle maintenance, cleaning and parking. 

Those costs should be passed on to your clients, which means you need to develop a strong cost structure that clients would find acceptable, but which would allow you to cover the cost and make a profit. The best way to go about it is to charge a monthly member fees and per-mile rates. 

Getting permissions

You need to be familiar with the existing regulatory framework related to parking, car rental and insurance. In most countries, for example, parking is controlled and managed by local municipal authorities and to implement a free-floating car sharing business model, you need permission to park the vehicles on-street which requires an exemption from metered and residential parking bylaws in general. Also, you need to ensure that all your vehicles are insured and that you adhere to all applicable laws and regulations related to running a car sharing business.


Your fleet should be diverse. You should cater to a wide range of customers, i.e. to a wide range of needs. That means you need both small vehicles, perfect for driving around the city, as well as large family cars for people who need a lot of space. Make sure you chose the vehicles that can be maintained by local companies and have a solid contract with them. Finally, opt for vehicles that have proven as reliable and comfortable.


The car sharing business includes a lot of various aspects and moving parts, which can all contribute to both success and failure of your company. It’s vital that you set up a system that is both attractive to customers and profitable to you. Otherwise, you can easily find yourself in a difficult situation, since vehicles are known for their high depreciation rate.

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