What is car sharing? How it works, and the 3 types explained

Car sharing means that several people use the same car at different times, instead of each owning one. The car can belong to a company that rents it by the hour (Zipcar), to a private owner who rents it out through an app (Turo), or to someone who shares it with family, friends or neighbors. In every case, what is shared is the vehicle, not the ride.

Terms like ‘carsharing’, ‘ridesharing’, and ‘peer-to-peer car rental’ are often used interchangeably, which leads to confusion. This guide defines each one, explains how car sharing works in practice, and shows where the Co-oto app fits.

How does car sharing work?

Whatever the type, car sharing follows the same four steps:

1. Access: you sign up with a service, or the owner invites you into their group. Your driver’s license is checked at this stage.
2. Booking: you reserve the car for a time slot, usually in an app, so two people never need it at the same moment.
3. The trip: you pick up the car, drive it, and bring it back to the agreed place. The mileage is recorded at the start and at the end.
4. Payment: with a company or a rental app, you pay by the hour, by the day or by the mile. Between people who know each other, the car’s real costs (gas, insurance, maintenance) are split according to how much each person uses it.

Car sharing vs carpooling: two different things

Carpooling is often confused with car-sharing, but the two have very different characteristics.

Carpooling involves sharing a ride with the vehicle’s owner, who is usually also the driver. Passengers join the owner on a specific trip, typically planned in advance.

Car-sharing, on the other hand, allows multiple people to access and use the same vehicle at different times. In this case, it’s not the journey that is shared, but the vehicle itself.

These two practices address different mobility needs, but they can complement each other effectively in a broader shared mobility ecosystem.

The Different Types of Car-Sharing

Car-sharing, which involves sharing vehicles among multiple users, can take several distinct forms. Here are the three main types:

1. Peer-to-peer car-sharing (self-managed)

This model is based on direct arrangements between individuals, without any commercial intermediaries. Participants agree on how one or more vehicles will be shared and set their own rules. These exchanges can be organized informally: on paper, through a shared logbook, or with a shared car schedule app like Co-oto.

2. Peer-to-peer car rental via online platforms

In this model, individuals rent vehicles from other private owners using online platforms. We compare that model with sharing among people you know in Co-oto vs Getaround, GoMore or Turo. Users pay based on distance and rental duration. One person can rent different cars, and a single owner can rent their vehicle to multiple users. Some of these platforms are evolving into more professional services, moving toward a form of “Uberization.”

3. Commercial car-sharing services

These services rely on a fleet of vehicles owned by a company, a local authority, or sometimes a cooperative. The cars are made available to subscribers and managed centrally. There are generally two operating models:

• Round-trip: The vehicle must be returned to its original pick-up location
• Free-floating: The vehicle can be parked in any legal spot within a defined area

Note: Traditional car rental companies (such as Hertz, Avis, or Europcar) may also be considered a form of short-term vehicle sharing. These well-established companies operate out of numerous locations, typically near airports, train stations, and city centers.

The Three Types of Car-Sharing Compared

Each option has its own set of advantages and limitations. Choosing the right one depends on your budget and travel habits.

	Peer-to-peer car-sharing	Peer-to-peer car rental	Commercial car-sharing
Examples	Co-oto, Paper logbook	Turo, GoMore, Getaround, 2EM	Zipcar, Mobility, Ubeeqo
Definition	Vehicle shared among trusted individuals	Rental via a platform	Company offering self-service vehicles 24/7
Vehicle owners	Private individuals	Private individuals	Company / Cooperative / Local authority
Geographic coverage	Anywhere vehicle owners are located	Anywhere vehicle owners are located	Mainly urban areas
Relationship duration	Medium to long-term	Occasional	Occasional or via subscription
Cost calculation	Costs shared among users	Duration + distance + platform fee	Duration + distance + subscription fees
Vehicle availability	By agreement	Set by owner	Available anytime

Peer-to-Peer Car-Sharing: Pros and Cons

Peer-to-peer car-sharing is the model that most closely aligns with the principles of the sharing economy. It offers a high level of flexibility, as it is based on a mutual agreement between a vehicle owner and the person they share the car with: a couple or a family sharing a second car, friends and neighbors on the same street. This system fosters a more balanced relationship, with terms negotiated directly between the parties involved.

It is particularly well-suited for frequent use or long-distance trips, which are often more expensive with other car-sharing options. Peer-to-peer sharing is also highly cost-effective, since there is no commercial intermediary. Most owners aim to share costs, often motivated by a spirit of mutual aid or financial efficiency, rather than to make a profit. On the amounts themselves, see how much to charge per kilometer, and on what that represents over a full year, what cost sharing changes for your own vehicle.

However, this model does raise questions about responsibility and requires a strong foundation of mutual trust and fairness. Clear organization and well-defined rules from the outset are key to preventing misunderstandings or disputes: see the tools that prevent misunderstandings in private car sharing.

If you’re interested in peer-to-peer car-sharing, the Co-oto app has been specifically developed to make this concept accessible and easy to manage. It splits both the variable costs, such as fuel, and the fixed ones, such as insurance and parking, while also simplifying the vehicle reservation process. See how it works step by step, or discover all Co-oto features.

Download Co-oto

Peer-to-Peer Car Rental: Pros and Cons

Renting a vehicle from another private individual is an appealing option for occasional use. In general, the rental conditions are unilaterally set by the vehicle owner through a platform. Renters must often specify their trip in advance by estimating the number of kilometers they will drive and must return the car at the agreed time. Additional fees may apply if these conditions are not met.

The owner must approve each booking request and is not obligated to accept it. They can also cancel a confirmed booking at any time (though they may face penalties for doing so).

This option offers access to a wide variety of vehicles. Rental prices can vary significantly depending on the type of car, rental duration, travel period (e.g. school holidays, rush hours), and the city’s size.

Insurance Considerations

Peer-to-peer rental platforms and commercial car-sharing services typically partner with insurance providers to offer varying levels of coverage. However, in the event of damage or an accident, users are still required to pay a deductible, which can be as high as 2,000 EUR. In some cases, this deductible can be reduced by paying an extra fee. It is therefore essential to read and understand the insurance terms and conditions before using a vehicle through these platforms.

In the case of peer-to-peer car-sharing (self-managed), solid coverage is also possible in the event of an incident caused by any of the users. Usually, the owner’s car insurance applies — but they must first check with their insurer to confirm that this type of usage is not excluded from their policy. If you are in Switzerland, our detailed article on car sharing and insurance in Switzerland covers casco, vehicle liability, deductible and bonus. For more details on getting started, see our complete guide.