Determinants of participation in the car sharing economy : from hypothetical to real markets

Abstract

The increased use of private vehicles has resulted in numerous health and environmental issues, raising concerns among citizens and pressures on authorities to alleviate the problem. Traffic congestion and insufficient parking availability also result in time and productivity losses. In order to mitigate this problem, typical solutions include stimulating modal shifts towards public transport.

Car sharing has more recently emerged as a novel solution - a way to rent cars stationed around cities to be used for the duration of a trip. This study presents a hypothetical car sharing service to respondents to an online survey aimed at determining the factors behind participation. Respondents were primed with different information on service providers and subsequently asked for their willingness to pay (WTP). As the survey was rolled out ahead and after the launch of an actual car sharing service in Malta, this enabled the testing of differences in WTP in both a hypothetical and actual scenario. Difference in means and regression analysis were then applied to the data collected to test what determines willingness to participate and pay.

The results show that both engagement and willingness to pay are negative in cars per capita within households. Willingness to pay responds negatively to expected usage. Few would be willing to sell their car to rely on car sharing services. Respondents are more likely to share within a scheme launched by the private (rather than public) sector and that their WTP in a hypothetical scenario (pre-launch) was much more favourable than in practice (post launch). This has important implications not only for policy and service providers but also for the literature that relies on contingent markets for analysis.