This article suffers from the misconception that the Car Sharing business model depends on the idea that there is a flat price per hour; independent of the distance driven. In fact I would argue that this even runs counter to the idea of car sharing: "you only pay what you need when you need it".

For example Germany's largest car sharing company (Stadtmobil) does charge per hour *and* per kilometer. At the gas station you do pay with a card from the car sharing company, but your monthly bill includes a few cent for each kilometer driven. This seems to be *the* way to go, customers accept it and the electronics in modern cars mean that even charging based on actual fuel consumption will be a possibility in the near future.

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Agreed, as I noted on my comment, Philly Car Share does the same thing. That said, it's a good model if part of your mission statement is to reduce the amount of driving. There's no reason, however, that ZipCar can't set the hourly price in such a way that they gain from varied miles that each driver drives.

Good point. I wonder why the article didn't mention this.

Agreed! San Francisco's City CarShare has a lower hourly rate than Zipcar with an extra per mile charge. It seems to work fine. The obvious problem with a flat rate is that if you are just driving to one destination (and leaving the car parked for most of your rental time) then you are subsidizing the fuel used by people who use the car to zip all over the place. Basically it makes driving to the beach for the afternoon a bad deal.

Zipcar charging by the mile is bound to happen eventually. And maybe they'll put a little red meter on the dash, so you can pretend you're driving a taxi.