Collaborative Consumption in Peer-to-Peer Car Sharing

Project summary:

This research project is part of the broader Initiative on the Sharing Economy program run by the Center for Transportation Studies, and the research is led by Professor Saif Benjaafar. The seed project described below is a preliminary study to examine the potential impact of the sharing economy in the context of peer-to-peer car sharing. The project also laid the ground for a larger effort that involves researchers across the university who prepared for a series of events--including a symposium on the sharing economy in May 2016. There is an ongoing paradigm shift away from the exclusive ownership and use of resources to one of shared use and potentially shared ownership. This paradigm shift is taking advantage of innovative new ways of peer-to-peer sharing that are voluntary and enabled by internet-based exchange markets and mediation platforms. Value is derived from the fact that most resources are acquired to satisfy peak demand but are otherwise poorly utilized. Several successful businesses in the U.S. and elsewhere, such as AirBnB for rooms in private homes, Uber for taxi service, LiquidOffice for office space, RelayRides for private car sharing, and TaskRabbit for errands, among many others, provide a proof of concept and evidence for the viability of the "sharing economy." Sharing has the potential to increase access while reducing investments in resources and infrastructure. In turn, this could have the twin benefit of improving consumer welfare while reducing societal costs. Take cars, for example; the availability of a sharing option may lead some to forego car ownership in favor of on-demand access via the car sharing option. A recent study showed that each shared car replaces at least four individually owned cars. If this holds, a significant reduction in the number of cars would be achieved even if only a small fraction of cars were shared (e.g., 5 percent of cars being shared leads to a 20 percent reduction in the total number of cars). In turn, this would result in a corresponding reduction in road capacity and parking infrastructure, freeing up significant land for alternative uses. Combined with other forms of sharing, particularly office and residential space, the net effect on both access and sustainability could be significant (more benefits of sharing are illustrated in Figures 2). One must, of course, be cognizant of how increased sharing may have other consequences, some of which may be undesirable. For example, greater access to cars could increase car usage and, therefore, lead to more congestion if it is not accompanied by a sufficient reduction in the numbers of cars, if patterns of car usage are not properly managed, or if sharing leads to speculative investments in cars and price inflation. Greater access to cars could also affect the availability and pricing of other modes of public transportation (e.g., taxis, buses, and trains). One must also be cognizant of the social and behavioral impediments that could limit the adoption and spread of a sharing culture, including issues of trust, privacy, and status. The objectives of the research included the following: 1) quantifying the benefit of peer-to-peer sharing, 2) understanding and analyzing, at the system level, the implications of car sharing (and other related forms of sharing such as the sharing of space), which includes resulting patterns of consumption, prices, and competition with traditional operators and service providers, 3) identifying the key social, behavioral, and regulatory impediments toward greater sharing, innovation (by the private sector), and shared service proliferation, and 4) identifying the features of enabling infrastructures, which include technology and ICT platforms as well as reputational systems.