What IS Fractional Car Ownership?

Car ownership opens such a wide range of economic and social possibilities that it is almost a prerequisite for many aspects of our society.

But for many, the cost of car ownership is prohibitively expensive.

It can take a huge bite out of monthly income, with insurance, gas, and upkeep. While many of these people would previously be out of luck, new technology is creating more options for car ownership on a fractional basis. Here are some of the latest high-tech options for car ownership.

Lyft and SideCar

Two prominent new ride sharing technologies are Lyft and SideCar. Lyft is the older service of the two, starting its life as Zimride in 2007. Originally started to help cash-strapped college students find rides, Zimride is a platform allowing users to find ride sharing partners. The website allows users to advertise available seats on road trips and suggest a donation to help cover gas expenses. Zimride helps make ride sharing less intimidating by implementing a user review system and connecting accounts to Facebook.

In 2012, Zimride spun off a mobile app called Lyft, which allows users to solicit rides in real time, much like a taxi. Lyft pre-screens its drivers, who are car owners looking to make extra money by offering rides.

The service operates in a number of major cities, and currently side-steps many of the regulatory issues of taxi companies by making its "suggested donations" to drivers optional. However, social convention and the user review system ensure that donations are rarely unpaid, making the whole process ostensibly a taxi service.

SideCar is a newer service that offers a similar real time ride sharing service to Lyft. As with Lyft, users can solicit drivers in the area, leave reviews of experiences, and give donations, which again are optional, all through the mobile app. As with Lyft, SideCar is currently only operating in select major cities in the U.S.

Uber

Uber is a similar tech service to SideCar and Lyft, but it manages a professional fleet of black cars, instead of building a peer to peer community. This makes Uber effectively a tech-enabled limousine service, one in which the work of soliciting rides and paying for fares is handled by the mobile app. Users pay a premium for this convenience compared with traditional black car operators, but Uber has met with success and currently operates in a number of cities internationally, with more on the

way. Uber has noted the success of peer to peer ride sharing apps like Lyft and SideCar, and has announced an expansion into a ride sharing app of its own.

Zipcar

Zipcar is one of the originators of the tech enabled fractional car ownership concept. Started in 2000, Zipcar offered rental cars that could be reserved and paid for online, and picked up using an RFID card, allowing the whole rental process to happen with no human intervention. Rentals could also happen on an as-needed basis, down to the hour, and Zipcar also offered subscription plans for regular usage. This model met with huge success, culminating in Zipcar being recently acquired by rental giant Avis for $500 million.

Fractional Ownership is Here to Stay

While these ride sharing tech companies have met with success in the market, they have also encountered a lot of legal entanglements. In particular Lyft and SideCar are operating in a legal grey area between private carpooling and commercial taxi service. Their notion of a suggested donation has allowed them to operate independently of many taxi regulations, but lawmakers are catching up, and this may be subject to change. Uber has also faced a lot of legal trouble from local regulators as taxi and car services are highly locally regulated industries.

As with much of technology, innovation is moving at a faster pace than legislation, and lawmakers are struggling to keep up. This places a lot of risk on ride sharing apps, as issues of insurance, tax and safety come into play. Despite these risks, it's undoubtable that customers love the notion of fractional car ownership, and one way or another, technology will continue to empower these markets.

Need a ride from the airport? Hailing a taxi can be expensive. Want to save money? We have an app for that! The two most prominent transportation apps – Uber and Lyft – are now operating in Florida. Should you actually use them? I’ll leave that up to you to decide.

What is an Uber or Lyft? They are ride-sharing technology-driven apps used to arrange and pay for rides. Those rides are part of the ride-sharing movement that uses ordinary citizens, behind the wheels of their own vehicles, to drive you where you want to go for a fee that is usually much less than using a cab for the same trip.

Specifically, after a rider requests a ride via the app, he or she may track the vehicle via GPS watching it approach. The apps provide a picture of the driver and car and reviews from other riders. Once the destination is reached, the rider gets out without paying the driver. The app will charge the rider’s credit card and send them a receipt via email.

Advantages and Disadvantages

So, the main advantage of using Uber or Lyft instead of a taxi or limousine is that it’s less expensive. Both companies claim that their transportation service is 40% cheaper than a taxi. Charges vary by location for both these ride-share companies and taxi and limousine services, but in Tampa each ride is based on a $1.25 base fee, plus a $1.00 trust and safety fee, $1.20 a mile and 13 cents a minute.

Tampa’s taxi rates are set by the Hillsborough County Public Transportation Commission and include a flat-rate charge of $25.00 per vehicle for non-stop trips to or from Tampa International Airport to an in-town zone or a $15.00 minimum charge from the airport with the taximeter determining the final charge if it goes over $15.00.

Taximeter charges are $2.50 for the first 1/8-mile, 30 cents for each additional 1/8-mile and 30 cents for each minute of waiting time.

Other advantages may be a cleaner ride. One of the major complaints against taxis is the lack of cleanliness of the vehicle. Driver’s of Uber and Lyft may be friendlier and willing to offer specific tips for must-see attractions, places to avoid and not-to-miss nightlife opportunities.

Disadvantages have more to do with legalities and safety. Ride-share risks include insurance concerns if you and your ride are involved in an accident. While driver’s for these ride-share companies are required to have insurance, most insurance coverage for personal vehicles exclude the vehicle when used as a vehicle for hire (commonly known as a “livery” exclusion). This means the private insurance may not pay.

Additionally, while drivers for both companies go through background checks, regulators are not satisfied that they are stringent enough; and, although vehicles are also “inspected,” how stringently depends on the company and city.

The Trouble With Uber and Lyft in Florida

Currently, Uber is operating in Jacksonville, Miami, Orlando, Tallahassee and Tampa; and, Lyft operates in all of those Florida cities except Tallahassee. Transportation authorities in every city in Florida have expressed displeasure at having the ride-share companies join the ranks of Florida’s highly-regulated transportation systems. Legally, the companies are operating outside the law by claiming they are Internet- or app-based companies and not subject to local transportation regulations. Of course, local regulators say they are wrong.

Perhaps you have seen the cute pink mustaches on the front of cars in your city that identify Lyft drivers. They’re cute, but easily identifiable to authorities that are handing out misdemeanor tickets to Lyft and Uber driver’s in the Tampa Bay area. Broward County is bringing legal action against Uber and Orlando International Airport is suing Uber for allegedly picking up passengers without getting proper taxi credentials. Uber and Lyft are both being hit with legal citations for running what Jacksonville City Hall has called an “illegal operation.”

Should You Use Uber or Lyft in Florida?

While Uber and Lyft drivers are faced with the possibility of being issued tickets, being drawn into lawsuits and even face threats of having their vehicles impounded, riders are not affected. The possibility does exist of riders being delayed or inconvenienced if your driver is pulled over, but riders do not face being ticketed.

Safety should certainly be a concern. Drivers and vehicles are checked out by Uber and Lyft, but probably not to the extent that meet local regulations and requirements. In the event of an accident, whether you would be adequately covered by insurance should have a bearing on your decision to ride.

The bottom line is travel at your own risk.

Mobilocity is a new ride share opportunity and the mobile app can be downloaded for free from the Google Play store and the Apple iTunes stiores.