What do you get when you combine Silicon Valley with San Francisco’s pain in the ass parking problem? A lot of car sharing startups.
Here at Priceonomics, we’re bikers, not drivers. But we do occasionally find ourselves in need of some wheels. When it comes to renting a car, there are two models. The first is Zipcar, which maintains a fleet of cars that can be rented out (and is actually a Boston-based startup). The second are the “peer to peer” (P2P) renting services, including Wheelz, RelayRides, and Getaround, which allow car owners to rent out their cars to paying customers.
Both Zipcar and P2P services offer both hourly and daily rates. But Zipcar’s rates include the cost of gas, while P2P’s rates do not. Confusion ensues – for us at least. Which is the better deal? We decided to crunch the numbers and find out.
Assumptions
For the cost of gas, we use $4.25, a price currently listed by Gas Guru as between a “best price” and “good price” for our home city of San Francisco. Zipcar actually does charge for gas if you drive more than 180 miles in a day – the distance between San Francisco and Lake Tahoe – but we’ll assume that no one drives that much.
We use a mileage figure of 29 miles per gallon – the combined highway and city mileage for a 2008 Toyota Carolla. We chose this because the Corolla is a top selling car that is likely to be found on P2P sites, but customers can choose whether they want a gas guzzling SUV or a hybrid.
We also use Getaround’s rates for most P2P costs, meaning that there is a $1 booking fee. Also, Getaround includes taxes, whereas Zipcar does not.
Since rich men with monocles aren’t likely to be reading this post, we use Zipcar’s minimum charge (for the weekends, which is slightly higher than weekday rates) for the area and a low price regularly found on P2P sites. We’ll also ignore Zipcar’s $60 annual fee, one-time application fee, and Zipcar’s “extra value” plan.
Quick Day Use
Let’s say that you are renting a car for 2 hours, just to do a few errands around town or pick something up from a friend. We’ll say you drive 17 miles. Here are the costs:
Zipcar: $8.75/hour * 2 hours + $1.40 tax = $19.03
Getaround: ($6/hour * 2 hours) + ($4.25/gallon * 1gallon/29 miles * 17 miles) + $1 booking fee = $15.50
Here, the mileage is too small to make a big difference (the gas costs only $2.50 total) and the taxes on Zipcar roughly equal Getaround’s booking fee. For trips of this length, the two services cost roughly the same, with the specific car chosen making a bigger difference than the service.
Result: tie.
Day Trip
What if you are going on a day trip? Here, we look at the daily rates for a 70 mile trip – roughly the round trip distance from San Francisco to the beach at Half Moon Bay or hiking at Point Reyes National Seashore.
Zipcar: $89 + $7.79 tax = $96.79
P2P: $40 + ($4.25/gallon * 1 gallon/29 miles * 70) + $1 booking fee = $51.26
This time, P2P’s lower day rates blow Zipcar out of the water. Even if you drive 180 miles, the P2P car would still beat Zipcar handedly at $67.38 for the day. Similarly, driving a 2008 Escalade (with an abysmal mileage of 14mpg) would only drive the price up to $62.25.
Advantage: P2P
Weekend Trip
Hoping to hit the slopes before ski season ends? Let’s say you rent a car Friday, drive from San Francisco to Lake Tahoe, and return the car on Sunday. Since you’ll need an SUV to take your skis, we’ll use our 14 mpg figure again.
Zipcar: $89/day * 3 days + $23.36 tax = $290.36
P2P: ($40/day * 3 days) + ($4.25/gallon *1 gallon/29 miles * 230 miles) + $1 booking fee = $248.50
On this trip, the price of gas nearly equalizes the cost, but renting with P2P still saves you around $40 – enough to replace the sunglasses you forgot on your nighstand. That said, if you take a weekend trip in a sedan, then P2P obviously the better choice. Using our previous figure of 29 mpg, the cost is only $182.55.
Advantage: P2P
Conclusion
After crunching all those numbers, we’ve deduced what we probably should have been able to guess: gas isn’t that expensive. On short trips, the difference between Zipcar and P2P services is slight. But on longer trips, the fact that Zipcar covers gas costs doesn’t come close to matching the cheaper rates available on sites like Getaround.
Peer to Peer sites can require meeting the car owner to grab the key, or waiting for the owner to confirm your rental request. If you’re willing to pay a premium to avoid the hassle, Zipcar is the way to go. But if you’re willing to hustle to save some cash, P2P wins hands down.
This post was written by Alex Mayyasi. Follow him on Twitter here or Google.