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Car-sharing revs up as China's cities battle congestion

As China's cities move to control traffic congestion, car-sharing may gain appeal with drivers, says Dennis Zuev

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To cut down traffic jams and smog, car owners must abide by rules on licence plate lotteries and no-driving days. More restrictions are planned. (Image by World Bank Photo Collection)

Car-sharing has been one of the most attention-grabbing trends in urban transport in recent years, as commercial car-sharing clubs like Autolib' in Paris have taken off. But the habit has yet to catch on in Chinese cities.

Yet that may be set to change, as efforts to control toxic air quality have spawned increasingly-restrictive number plate lotteries, no-driving days, and higher parking fees to tackle gridlock and pollution. The steady increase in such measures could make car-sharing more appealing and commonplace in China.

Greater use of car-sharing could  also help to popularise electric vehicles (known as EVs) if car-sharing companies choose them for their vehicle fleets, as has happened in Paris. So far, battery-operated cars have struggled to attract significant numbers of buyers in China, the world’s biggest car market, partly because of lack of charging stations and preferences for cheaper, petrol-fuelled models.

Hangzhou, south of Shanghai, is arguably China's most progressive city in terms of experimenting with car-sharing; it has five competing companies where the cost of car-sharing is US$3.25 per hour, more than a taxi, but giving greater comfort and mobility, as well as cutting down on the waiting time to hail a cab at busy times of day. Hangzhou's city government wants to see 100,000 car-sharing vehicles on its roads by 2018.

The road ahead

A slew of Chinese cities either have car-sharing and car-leasing schemes in place, or plan to set them up soon. Cities with existing schemes include Wuhan, an industrial metropolis on the lower Yangzte, and Changsha, in central China's Hunan province.

In September 2014, a new car-sharing system called GX-ZUCHE was launched in the coastal industrial city of Yantai, Shandong province, as a part of a wider Sino-German cooperation in sustainable transport. The scheme provides 100 cars, of which 10 are EVS, at 50 car-sharing collection points in the coastal city, and its launch was heralded with a workshop supported by China's Ministry of Transport.

In November 2014, Daimler announced it intends to expand its car-sharing platform Car2Go to China as it ramps up the service’s global coverage by more than 70% to 50 cities by the end of 2016.  It has already launched car-sharing schemes in Shenzhen and Chongqing.

However in Shanghai, China richest metropolis, plans for car-sharing lag behind, and the city's scheme amounts to little more than a taxi-sharing system.

Urban professionals in North America and Europe have adopted the notion of sharing a wide range of goods and services in peer-to-peer rental systems, including transport. The trend has generated opportunities for commercial car clubs, such as Autolib', Zipcar, or EnterpriseCarShare. Some of China's car-sharing services were set up by Chinese students who had returned from abroad. This is also true in Hong Kong, where a service was launched in 2013.

Obstacles
 
However, the trend faces signficiant social obstacles in China, where mass car ownership is a recent phenomenon. The social cachet of owning a private car has stymied the growth of the sharing sector. In the past 30 years, car ownership has become one of the most important expressions of personal status. The privacy and autonomy that newly-prosperous citizens gain from driving has made car ownership a symbol for the cultural antithesis of the collective ethos of the Mao era.

But as it becomes increasingly difficult – and likely more expensive – to buy a car in China, city dwellers are increasingly throwing off convention and adopting vehicle-sharing. For the concept to take off, it will need to be  packaged as ‘urban cool’  – in much the same way that Starbucks Coffee was able to popularise a product that wasn't widely popular in China until fairly recently.

But car sharing schemes are also likely to need encouragement from municipal authorities, an element that could make them less appealing in the eyes of Chinese consumers, who may be turned off by services that have too much government involvement.

However, such developments appear promising, as they co-incide with central government attention to promoting renewables and clean energy, including a rumoured $16 billion for the promotion and development of electric vehicles that has already shown signs of shaking up the sector. At present, there are no subsidies specifically for car-sharing, though there are incentives at state, city and district level for buying EVs.

According to a recent report by consultancy Roland Berger, the Chinese car-sharing market is still developing, but is expected to grow around 80 percent a year until 2018, albeit from a low base.

To tackle congestion and bad air, car-sharing is a good option that becomes dramatically more effective combined with EVS.

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