The Potential Future of Market-Driven Car Sharing

As someone who just had to (and I mean had to) go through the process of finding a new car, the quote below from a Fortune interview with Marc Andreessen was really eye-opening.  Andreesen (an investor in Uber) does a great job of talking through the specifics of how and why there could be mass adoption of car sharing among everyday people. It really does seem entirely possible that in the next 10-20 years, the number of cars needed will be drastically reduced as people rent them only when they need them.  Thanks to Fred Wilson for pointing out the interview on his blog.

Fortune: Speaking of cars, you've talked about a shared economy where people will share cars. They won't own cars. You see a little bit of that today, but is that really the way the world's going?

Andreessen: So this is when I get really excited. This is another example of the impact of information transparency on markets. We are 90 years or so into cars. And we drive our cars around. And we own our cars. And then when we're not in our cars they sit parked. So the average car is utilized maybe two hours out of the day. It sits idle for 90% of the time. The typical occupancy rate in the U.S. is about 1.2 passengers per car ride. And so even when the car is in motion, three-quarters of the seats are unfilled.

And so you start to run this interesting kind of thought experiment, which is what if access to cars was just automatic? What if, whenever you needed a car, there it was? And what if other people who needed that same ride at that same time could just participate in that same ride? What if you could perfectly match supply and demand for transportation?

Taken a step further, what if you could bring delivery into it? Two people were going to drive between towns, and there was also a package that needed to go. Let's also put that in there so we can fill a seat with a package. Just run the thought experiment and say, "What if we could fully allocate all the cars, and then what if we could have the cars on the road all the time?"

And of course the answer is a whole bunch of things fall out of it. You'd need far fewer cars. The number of cars on the road would plummet by 75% to 90%. You'd instantly solve problems like congestion. You'd instantly solve a huge part of the emissions problem. And you'd cause a huge reduction in the need for gas. And then you'd have this interesting other side effect where you wouldn't need parking lots, at least not anywhere near the extent that you do now. And so you could turn a lot of parking lots into parks.