Businesses in US cities are taking up carsharing in a big way, just as there are big changes about to take place in 2011 in the business model of carsharing.

Zipcar Carsharing for Business

From 2007 to 2009, carsharing memberships grew 117 percent in North America, and is expected to hit 4.4 million members by 2016.  The biggest company in this sector is the Cambridge, MA based Zipcar, which has over 500,000 members and 8,000 vehicles. They also have 10,000 businesses signed up for under Zipcar for Business.

Connect by Hertz has over 700 vehicles and 20,000 members. Companies currently using Connect by Hertz include Marriott International which uses carsharing at its Bethesda, MD headquarters.

These car rental companies are also getting into the business of providing carsharing solutions for companies and organizations who have their own fleets. Last year, Zipcar launched FastFleet, which is somewhat similar to the technology that powers Zipcar’s consumer fleet.

These cars don’t have to be parked in a depot. Instead, employees use an intuitive reservation system over the web, phone or mobile device, to select and reserve vehicles. The car has a card reader and a swipe from a programmed card unlocks the doors, so the car can be left anywhere and the next nearest customer can start using it from there.

The city of Washington DC tried out this system on a 4 month pilot run and saved $300,000. DC estimates that they’ll be saving $1 million in the first 12 months using FastFleet.

This kind of reservation system for decentralized carsharing is exactly what is going to be hugely in demand starting next year, after California’s Assembly Bill 1871 goes into effect on Jan 1, 2011. The law makes it legal for individual car owners to share their car directly with other drivers, in return for material compensation.

It’s not illegal right now, but renting out a car for money violates the terms of personal car insurance. Starting Jan 1, car sharing for cash will be classified as non-commercial use in California, so the insurance companies can’t object.

This means anyone can offer a car for carsharing and make a few bucks off it instead of leaving it parked. To do it on a citywide level, all it needs is for someone to coordinate the whole thing with a reservation system, much like Fastfleet does for DC.

So where does this leave companies like Hertz and Zipcar who are doing a thriving carsharing business with their own fleets? They’ve got two choices – they can either get in on the program and sign up people who want to have their cars included in a city-wide carsharing fleet. Or they can ignore it and hope the system doesn’t spread out beyond California.

Whether or not these changes in the business of carsharing catch on, carsharing for businesses is going to be huge in the coming years. Thankfully for the travel industry, this is one innovation that doesn’t call for any cutbacks in business travel.