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Flexcar Launches Car-Sharing Pilot Program for Undergrads

3 August 2006

Flexcar is piloting a new program for college students between the ages of 18 and 20 at six universities across the US. The first campuses include the University of Portland (Ore.), University of California-Los Angeles, University of California-San Diego, University of California-Berkeley, University of Maryland and Emory University (Atlanta).

Campus parking for privately-owned cars is typically very limited, and rental car companies traditionally only rent to licensed drivers 25 and older. Even car-sharing, which has been rapidly expanding on college campuses, has been restricted to those 21 and older.

Based on the results of the pilot, Flexcar may partner with more campuses in the Fall.

Flexcar is already providing car-sharing services to faculty and staff at colleges and universities. Many campuses offer Flexcar as a commuting enhancement service to encourage faculty and staff to leave their cars at home, using Flexcar for personal errands during the day. Other campuses rely on Flexcar for university-related business travel, such as meetings, seminars and other trips.

The company is working through the many challenges associated with what the insurance industry generally considers the highest-risk driver group: those under 21. Nonetheless, Flexcar officials feel it is important to extend the personal, environmental and community benefits to this segment of the driving population.

Students at these universities must meet certain eligibility requirements in order to participate in the program, including a clean driving record, supplemental insurance and parental approval. They also must pay a refundable deposit.

Flexcar operates car-sharing programs for more than 35,000 members in eight metropolitan areas, covering nearly 40 cities in seven states and the District of Columbia. Flexcar’s fleet includes sedans, gas-electric hybrids, and specialty vehicles including pickups, AWD, minivans and convertibles.

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August 3, 2006 in Car Sharing | Permalink | Comments (14) | TrackBack (2)

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» Flexcar Launches Car-Sharing Pilot Program for Undergrads from Daffodil Lane
I really hope this works!! If you recall (OK, it was two years ago, I recall even if you don't) back in 2004 I was talking about how cool Car-Sharing would have been if I had it in college. Well... [Read More]

» Flexcar Launches Car-Sharing Pilot Program for Undergrads from Daffodil Lane
I really hope this works!! If you recall (OK, it was two years ago, I recall even if you don't) back in 2004 I was talking about how cool Car-Sharing would have been if I had it in college. Well... [Read More]

Comments

this is great news. personally, i hope that they have success with this program and expand it, eventually, nationwide.
i find it atrocious that a "free" country" denies anyone under 21 the right to rent out a car in some fashion. it's about damn time.

i find it atrocious that a "free" country" denies anyone under 21 the right to rent out a car in some fashion. it's about damn time.

The "right"?

It's an extremely high risk demographic with very little in the way of assets to serve as collateral.

http://www.nytimes.com/2006/01/08/weekinreview/08lewin.html

Josepf:
Still they can marry and have kids (the biggest responsibility in human life), have to pay taxes in full, and can loose their life while serving in military. How about take away driving licenses from seniors? Or make insurance profiling dependent on skin color or yearly income?

Still they can marry and have kids (the biggest responsibility in human life), have to pay taxes in full, and can loose their life while serving in military.

That's correct. None of this has anything to do with private enterprises being able to choose what products and services to sell and knowing when the risks outweigh the rewards.

How about take away driving licenses from seniors?

The state certainly has the right to deny someone a license if they determine they are unfit to drive a vehicle safely.

Or make insurance profiling dependent on skin color or yearly income?

Well, since those don't correlate with risk, you're making a non-sequitur. All your objections are.

Should we force companies to lose money? Should we have state-owned car rental agencies? What's your solution?

Apparently Flexcar has determined they can price it appropriately, given the ability to filter members based on driving records and securing a deposit -- addressing the two aspects I mentioned, which are the high risk of young (especially male) drivers and the lack of collateral on average.

I get penalized for living in a specific zip code by my insurance company, even though my car isn't covered for theft. I also get very little cost reduction for not driving many miles, not commuting daily, being a safe and conscientious driver, and so on. Life can be unfair and imperfect.

Basically you're asserting that companies should ignore actuarial considerations.

Considering how highly regulated the insurance market it in most states, calling their actions "private choice" is a bit of a non-sequiter. Insurance is a wonderful thing, but don't assume that it works on a free market like the market for apples or widgets, because it doesn't. Aside from regulation, government also intervenes by serving as an insurer of last resort in certain markets -- often correlated natural disaster risk markets -- like homeowner's insurance in parts of Florida or flood insurance in the midwest.

The larger non-sequiter is in assuming that private automobiles are easily foregone by young people, or that the need for private automobiles is the result of a purely free market. A half century of government intervention in the road-building sector is largely responsible for urban living patters that make life without a car often impossible. It isn't so far fetched to imagine that government should now get involved in allowing qualified drivers to fully participate in our urban life. Maybe government should get into the business of organizing insurance of last resort.

Actually, government already does. Most states have an "assigned risk pool" where insurance companies are forced to carry the most irresponsible drivers at a high, but capped, premium. The rest of us -- good drivers -- make up the difference. Similarly, a few states force the major car rental firms to extend rentals to 18 or 21 year olds, and allow a certain daily surcharge to cover the insurance. Avis and Hertz have not pulled out of New York on account of that.

The right to rent a car is really the right to insurance -- because everyone knows that the only thing standing between a 20 year old and the Avis counter is an actuary. Insurance is one of those markets where the government really does -- and should -- intervene to make sure that those who are left out by the ordinary market get at least some basic service.

The final non sequiter is "collateral." When I rent a car, a $250 hold is placed on my credit card. That's all. I'm still fairly young, and I have no major assets. The car rental firm doesn't care. If I wreck the car and haven't bought their CDW, they'll try to go after me, but write it off if they can't get anywhere. It's part of their business model. At any rate, my regular auto insurance actually does cover that, so I know I'm not flying bare -- but they don't know that.

I'm still amused that you all think that there is some "right" to RENT a vehicle from a private company.

If kids want to drive cars, then they're free to go buy them and pay the rates insurance companies want. It's absurd to think that the government should force private rental firms to contract with customers they don't want to contract with, because of the risk involved.

Next thing you'll be proposing is that banks should be forced to issue credit cards to people who are known to not pay their bills.

No need for some extended and unnecessary lecture to me about car dependence in the United States or some other amazing leap of logic. If you feel there's some grand injustice in denying younger people rental cars, perhaps you should go out and borrow millions of dollars, work 16 hour days, and take enormous risks involved with starting a major carsharing enterprise or rental car firm. Then you can rent to all the hotrodding teenage boys in the world - the poor things.

And when I start that rental firm, I'll need to get insurance on those cars. Insurance is a legal necessity and is provided by an highly regulated market.

I don't advocate "forcing" Avis or Hertz to do anything they don't want to do. I do advocate a re-thinking our "insurance of last resort" policies, and broadening them to the point where Avis and Hertz will voluntarily rent to at least portions of higher risk groups. Since insurance of last resort is something government already does plenty of, I don't consider that a huge leap, or major infringement on our holy free markets.

And when I start that rental firm, I'll need to get insurance on those cars. Insurance is a legal necessity and is provided by an highly regulated market.

Again - so? What does this have to do with RIGHTS?

Back when a lot of us were trying to get carsharing off the ground, the major stumbling block was getting insurance. The companies didn't have that specific product, despite having experience with insuring fleets for businesses.

Nobody cried about their RIGHTS being violated.

Fact is, most large rental fleets are self-insured. That's one solution if you're not happy with what the insurance market offers, but as a business, you have to have pretty substantial scale to be able to do that.

I don't advocate "forcing" Avis or Hertz to do anything they don't want to do. I do advocate a re-thinking our "insurance of last resort" policies, and broadening them to the point where Avis and Hertz will voluntarily rent to at least portions of higher risk groups. Since insurance of last resort is something government already does plenty of, I don't consider that a huge leap, or major infringement on our holy free markets.

Oh, here we go. You think I'm some worshipper of "free markets"? That's pretty funny. I'm just telling you the facts of how things work and how absurd it is to speak of "rights" when it comes to a private risk-taking business and how they choose to run their businesses.

So, perhaps you should be lobbying the Feds about this "crucial" issue, instead of insisting that private firms take on unnecessary risks in a very difficult, capital-intensive business.

Did you even see how Flexcar is working this out? They're making the 18-20 year olds get their parents to co-sign the membership agreement and provide secondary, supplemental insurance. But now you think the government should provide some sort of "last resort" insurance for high-risk teenage drivers?

Craziness.

Auto insurance is almost exclusively a state government matter.

That is in response to your notion that we should "lobby the feds."

That is in response to your notion that we should "lobby the feds."

Reduced to semantic niggling on this one? If you're going to speak of "rights", then it most certainly is a federal issue.

Those cars are private property held by rental companies. They should be allowed to contract with whomever they wish to use their cars.

Should the government tell you that someone can just use your personal car whenever they want to? You keep ignoring the fact that these cars are private property.

Flexcar should be commended for reaching out to younger people with their service. That took a lot of creativity, and they are taking risks many companies aren't willing to take.

But don't classify renting a car as a "right", nor insist that any government should intervene in the car insurance market to distort pricing for a high-risk group. With that same logic, we should set up special "last resort" insurance for credit cards and force banks to give jobless teenagers with no assets and no credit history unlimited access to credit. Because you could start making arguments that unequal access to capital is unfair in a society that demands people have access to capital in order to compete and survive.

Maybe the government should also set up "last resort" insurance for people who want to build their homes on active volcanoes, since insurance companies probably won't insure them against loss.

If adults were being immobilized (ie, there was no car insurance available for young people at all), then perhaps you'd have a case. But the fact is that if someone wants to own a car and assume risks with their own property, insurance companies seem to have no problem with putting a price on that. But, again, the big rental firms tend to be self-insured, so you're basically asking them to risk their assets on a high-risk group, with only their own financial resources to cover any potential losses - both in terms of property and liability.

This is why raising this whole issue of auto dependence, especially to someone like me, is completely off-topic. I'm well aware of auto dependence in this country.

Federally-backed volcano-zone insurance -- not as far-out as you might expect.

See: http://thomas.loc.gov/cgi-bin/cpquery/?&dbname=cp105&sid=cp105WrIO2&refer=&r_n=hr687.105&item=&sel=TOC_63654&

At present, the Federal government backs a huge amount of the flood risk in the present homeowner's insurance market.

See: http://www.pueblo.gsa.gov/cic_text/housing/natl-flood/insurance.htm

Of course Avis and Hertz own their fleets, and of course I have no right to demand that they rent me a car under any circumstances. I also have no right to demand that banks loan me an unlimited amount of money, or to demand that they give me a ride on a flying carpet.

My point is actually a very limited one. The government, at both state and federal levels, intervenes pervasively in the insurance market. Often, they back-up risky or losing endeavors, because on the whole we decide that its actually worthwhile to insure, at public expense, such activity and let it continue, rather than let it go uninsured and see it disapper, as risk-averse private entities choose not to put their property at risk.

I am merely making the point that *since* we are so auto-dependent, and *since* the government bears a lot of the responsibility for they, they should therefore think about making up for some of the downside, which is decreased mobility for certain sectors of society. An easy way to do this would be to intervene (again) in the insurance market, which would make it affordable and profitable for some auto renters to voluntarily choose to enter the 18 or 21 year old market.

Government already has plenty of similar mobility-enhancing subsidies. Assigned risk pool auto insurance, cut-rate public transit fares, AMTRAK, general revenue spending on roads (more prevalent on the state and local levels), etc. I merely suggest that a re-insurance scheme for some fraction of the 18 or 21 year old auto rental market might increase overall mobility and therefore overall good. Perhaps it should be limited to those with clean records (lower risk) perhaps those with existing auto insurance (easier administration; already paying money into the system). These are details.

If a private company can come up with the same product, good for them. They'll own the market if the government never moves on the topic. But considering how regulated the insurance market really is, SOME form of government prodding may be necessary to get this going on a wider scale. Minimally, it should be thoroughly studied, and the results published for all to read.

Federally-backed volcano-zone insurance -- not as far-out as you might expect. At present, the Federal government backs a huge amount of the flood risk in the present homeowner's insurance market.

Both of which are bad policy. Why should people who make decisions to avoid high-risk areas subsidize people who choose to take those risks?

I am merely making the point that *since* we are so auto-dependent, and *since* the government bears a lot of the responsibility for they, they should therefore think about making up for some of the downside, which is decreased mobility for certain sectors of society. An easy way to do this would be to intervene (again) in the insurance market, which would make it affordable and profitable for some auto renters to voluntarily choose to enter the 18 or 21 year old market.

How do young people have decreased mobility? I got my license the day I turned 16. I got my first car the same day. What exactly is your point? How are young people's mobility being limited?

You're basically proposing that everyone else should be in the business of subsidizing automobile use by young people.

I merely suggest that a re-insurance scheme for some fraction of the 18 or 21 year old auto rental market might increase overall mobility and therefore overall good.

How does giving 18 year old boys subsidized auto rental insurance increase the "overall good" in society? I'm not seeing that. I'm seeing how carsharing increases the "overall good" in society, and I'm also seeing a private firm take private action to extend their service to the group you're referring to. So why exactly is government intervention necessary? We need to have young people putting on more vehicle miles than they currently do? We need them engaging more in the most risky activity, by a huge margin, for their age group?

One could easily argue that society's "overall good" would be bettered if we REDUCED the amount of car use by young people. It certainly would save a lot of lives and heartache.

But considering how regulated the insurance market really is, SOME form of government prodding may be necessary to get this going on a wider scale. Minimally, it should be thoroughly studied, and the results published for all to read.

You keep running back to this notion that if something is regulated (and pretty much everything is regulated to one degree or another), then government intervention is always a good idea?

In the 18-20 age group, 40% of all deaths are kids dying in cars. For the 18-24 group, it's 34%. For adults 25 and over, that number is 1%.

For nonfatal injuries, the numbers are 19%, 18%, and 13% for the respective age cohorts.

Those numbers don't even include pedestrians, cyclists, or motorcyclists, nor do they take into account the 2,600 kids below the age killed and 328,000 injured in the US in a year from riding in personal vehicles.

Mobility via automobile can be important in this society, but please don't ignore the disproportionate risks to the younger age groups.

Cite your sources Joseph, you write like an 18 year old who can't rent a car.

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