News & Resources

Car Sharing Services Speeding Ahead in Canada

Aug. 1, 2014
4 mins
A woman driving her car glances and smiles at her un-pictured passenger

In Canada's largest urban centres, it's quite common to see white and blue Car2go smart cars and the green Zipcar logo prominently displayed in subcompact automobiles, dotting downtown streets and parking lots.

Canadians have embraced the convenience and cost-effectiveness of sharing cars, which eliminates spending on vehicle maintenance, insurance costs and daily parking hassles. Smartphone apps help you find, book and get walking directions in most instances and you can even find out how much gas is left in the tank in many cases.

In May 2014, Vancouver boasted the largest fleet of Car2go smart cars in North America with more than 700 of the Mercedes vehicles in operation and over 40,000 members enrolled.

But the smaller cities and towns like Fernie, B.C., Sherbrooke, Quebec and Saskatoon, Saskatchewan are getting in on the action too. While there may be only a few Nissan Versas available to members and casual drivers right now, we can expect The Saskatoon Carshare Co-op to attract more users in the coming months.

Those focused on environmental issues point out that for every car share, there are five less vehicles on the road. Add to that the reduction in traffic congestion, noise and decreasing wear and tear on public infrastructure and you can see why the car sharing industry is expected to grow to $6.2 billion worldwide in 2020, up from about $1 billion in 2013, according to Navigant Research.

But not all the experts expect a smooth road for car sharing services. Some believe that city governments will get more involved in the business, either by stepping in with regulations on ride sharing and peer-to-peer services or taking a direct investment in the companies themselves.

San Francisco-based Uber, which offers taxis, limos and car sharing services in 40 countries worldwide through a smartphone app, is now in a legal tussle with the City of Toronto because it is trying to bypass licensing fees and higher insurance rates faced by other taxi services, claiming it is a technology company and should be subject to different rules. Uber is currently facing 35 bylaw infractions related to operating an unlicensed limousine and taxi businesses in Toronto and is well-prepared to battle in court, at least financially, considering the firm has raised $1.2 billion in funding recently from Google Ventures, Fidelity Investments and BlackRock Inc.

Furthermore, insurance companies have yet to finalize specific policies geared toward car and ride-sharing operations. In some cases, the car and ride sharing firms provide clients with the minimum liability requirements. Therefore, should an accident occur that exceeds the minimum coverage, individual clients are responsible for paying for injuries and property damage.

Aside from insurance and regulatory issues, which will eventually be resolved, consumers have already put car sharing services on the fast track.

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