Subsidized Car Sharing: The Next Frontier in Wasteful Spending

Nine months ago I happily testified (twice) on behalf of a legislative bill that would allow the creation of a privately operated car sharing program in Oregon. I liked the idea of using cars more efficiently, and I loved the fact that the price of rentals would be determined entirely by the market.

A model for this program exists in San Francisco; and as one of the legislative proponents described it, private vehicles there rent for about $9 per hour. But a Tesla electric vehicle frequently rents for $50 an hour, just because some people think it’s fun to drive.

I wouldn’t pay that much, but I’m glad the law allows someone else to.

Unfortunately, a good idea has been ruined by subsidies. Recently, the federal government awarded a $1.7 million grant (requiring $431,250 in local match money) to the City of Portland to promote car sharing and to measure the results. The regional government, Metro, will vote on Thursday to accept the grant.

Car sharing is a great idea, but tax sharing is not. Metro Councilors should reject the federal money and allow the “invisible hand” of the market to work exactly as the legislature intended.

John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research organization.

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Posted by at 04:30 | Posted in Economy, Government Regulation, Individual Responsiblity, Metro, OR 76th Legislative Session, Oregon Government, Oregon House, Oregon Senate, Portland Politics, Taxes, Transportation | Tagged , , , | 190 Comments |Email This Post Email This Post |Print This Post Print This Post
  • DrPhil

    I think anyone considering a Volt (which comes with a fire extinguisher in the glove box, by the way) will need the subsidy.
    The car is going to have a value of exactly 0 after 5 or more years due the the replacement cost of the battery pack being more than the worth of the vehicle. Without this valuable subsidy who would buy such a moronic device?? I ask you this in all sincerity.

    • Rupert in Springfield

      >I think anyone considering a Volt (which comes with a fire extinguisher in the glove box, by the way) will need the subsidy. 

      The Volt is already heavily subsidized but Im not really sure I would say they need the subsidy.

      Electric cars are really only popular with the 1% crowd so chucking the car after 5 years wont concern them.

      Of course you would think Occupy types would be against subsidizing cars for rich people. Of course you would be wrong in that because the key difference is its an Obama subsidy, and that makes it all ok.

      • 3H

        Would you argue that “OWS types” are uncritical of Obama and his policies?  

        • Rupert in Springfield


      • 3H

        You do, of course, have facts to back up your statement that,
        Electric cars are really only popular with the 1% crowd so chucking the car after 5 years wont concern them.”

        You can provide demographic information about who has been buying the Volt?

        • Rupert in Springfield

          Yep, the average income of a Volt buyer was around $140k. Was in the news quite a bit last week. Sorry you missed it. Try Google.

          • 3H

            The base income of the 1% is over 300K.  Nice try. Sorry you weren’t aware of how much the 1% earn. Try Google.

          • valley person

            You missed who qualifies for the 1% by around $200K. If you had said the upper 10% you would have been in the ballpark.

            So can we get a Rupert oops?

          • 3H

            I’m sure he will.   He told us himself that he always admits when he is wrong.

          • None

            Right-Wing Dupe(rt) is still trying to insist that I didn’t know that “corpsman” is a word. After several people pointed out that I was making fun of his atrocious spelling, and he’d written “coprsman,” which, in fact, is not a word.

          • valley person

            Don’t hold your breath waiting for an oops my bad from Rupert. Ain’t gonna happen.

          • 3H

            Well, in a post a little further up the line he says he’s very forthright in admitting when he is wrong.  We’re still waiting, and enough time has gone by to call BS on him.  While he’s at it, he needs to admit he was wrong about LBJ’s comment too.  That one was pretty egregious.

          • voltron

            Correction – average Volt owner income $170k.

  • Mark

    Volts are the future.

  • Rupert in Springfield

    There is something hilarious about being in the middle of a absolute horror show in terms of our deficit and spending $1.7M to subsidize a car rental company.

    Imagine how it must feel to be running a local Hertz or Avis rental agency and find your tax money is going to pay for some faddish start up competitor?

    It’s absurd, but of course those who believe in an all powerfull government will bring their unquestioning obedience with them.

    I can hear the arguments now. How dare you question anything Obama does! The subsidization of anything, no matter how ridiculous must be accepted because BPA was subsidized, rural telephone was subsidized, therefore anything subsidized must be good!

    Its absurd, as is this business. We are talking about subsidizing the company for the cost of the equipment to be put into peoples cars allowing unlocking and start up with an iPhone, as well as marketing and research into the dynamics of car sharing.

    Those last two are hilarious. Isn’t marketing and research into the business kind of a basic responsibility of any business? We really need to subsidize that?

    But of course, people will go along with this nonsense. The rules were even changed on auto insurance to accomodate this nonsense.

    Imagine if the rules could be changed to accomdate allowing people to pick their own health insurance, the way they chose to avoid nitwit mandates?

    Nope, can’t do that. But for a dopey car rental idea, things can turn on a dime, insurance is suddenly maleable in a way those of us who pay forour own health care coverage can only dream about.

    The absurdity of this is so laughable only the Obey crowd will fail to see the humour in it.

    • valley person

      “Imagine if the rules could be changed to accomodate allowing people to pick their own health insurance”

      No need to imagine this. Its called a health insurance exchange, and is included in Obamacare.

      • Bob Clark

        Ah, what companies are allowed into, and what they are to offer, in your health exchange is to be prescribed in the nth degree by government and so called government ordained bureaucrats.  P.S, even blue dog Wyden is proposing a more competitive alternative to Obamacare.

        • valley person

          I spent 12 years in the existing small business insurance “free market,” and I can tell you first hand Bob that it sucks. Having a larger pool with minimal standards to protect the consumer is going to be a big plus.

          We ought to also let medium sized businesses into the new pool, and you will see how fast the old insurance model dries up. The company I work for today offers its employees 2 whole choices of insurers. Some free market. 

          • JoelinPDX

            Has anyone else noticed that VP has done and been virtually everything? No matter what the topic, he has a personal anecdote about it. Kind of makes you wonder when he has had time to sleep.

          • valley person

            I’m also a world champion napper, so not to worry.

          • 3H

            Ohhh..  it’s on.  I’m willing to bet I can out nap you any day.  I’ll even drink 3 cups of coffee to make it a challenge.

          • None

            Have you noticed that, rather than respond to people’s point, Joel tends to go the route of personal attack?

          • Rupert in Springfield

            Well, I have spent a lot longer than 12 years buying my own health insurance. I can tell you to the extent it sucks is hardly due to government protecting the consumer.
            If you think for five seconds the government mandate for accupunture coverage was put in to protect the consumer you are crazy.
            I have never met a person bankrupted by excessive accupunture costs.
            I have often met people that lobby to get favorable treatment of their business by governmnet however.

          • valley person

            When I had self-purchased insurance up until 3 years ago, acupuncture was not included in my coverage. Maybe the state changed that requirement over the past 3 years.

            But even if what you say is true, how much would adding acupuncture to your insurance requirement raise your cost? Since acupuncture is a lot cheaper than many pain meds, it might lower your cost. Acupuncurists, if they lobbied, probably pointed this out.

            You may not have met anyone bankrupted by acupuncture costs, but you probably have met someone bankrupted by their insurance company failing to cover their bills, or dropping them after they make claims, or by hitting lifetime caps. Obamacare puts an end to all 3 of these.

      • Rupert in Springfield

        Nope. Exchanges in no way allow one to  buy health insurance with the same freddom they buy a frying pan or a camera.

        • valley person

          I didn’t know that was the relevant standard, but since you already can’t buy health insurance with the same freedom you would a camera, you haven’t lost anything. And you will probably gain more choices than you presently have.

        • None

          Learn to use the spell check on your browser, you lazy jerk. “Freddom.” 

          Do you really care so little about the people that read your comments that you won’t spend the 5 seconds to look at the words that are underlined? 

          You’re too lazy to do the work yourself, so you force others to do your work for you. 

  • Bob Clark

    One step better would be to allow renting space in a moving car or van without the current business protective taxicab scheme enforced by government.  Right to work, baby.  Government can ascribe ratings to taxi providers but not restrict entry…it’s buyer beware with information provision provided by government or government approved rating entity such as consumer magazine.

    TriMet might have to get in better shape if it had to compete with competitive taxicab rates.

  • DrPhil

    I would be glad to rent a car for a cheap, subsidized rate, but only if the seats were clean.

  • Tim Lyman

    What should also disturb people is the crony capitalism involved in Zipcar.  Other rental companies offer the same cars at far lower rates, without renters having to commit/subscribe to a certain number of hours of usage each month, yet there are not free parking spaces all over town for Hertz, National, etc. renters, Zipcar renters don’t pay the 17% tax other car renters pay, nor do other rental companies receive huge tax waivers and subsidies.

    • valley person

      There are certainly free parking spaces all over town. Its called curbside. I believe zipcar pays for the space they take up in downtown garages.

      Our business concluded that zipcar is more cost effective for short trips, but conventional is better for overnight or longer. I don;t know where you get your numbers.

      I’m not sure about the tax differences, but zipcar’s market is primarily local residents and businesses for local use, while conventional car companies market to out of town visitors. I imagine the idea is to tax the out of towners rather than the locals. Zipcar also reduces the need for everyone to have a car for day to day uses. That saves some people a lot of money. 

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