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From car-sharing to trading groups

By Batanai Matsika

A common feature when one investigates how households allocate their income monthly is that a significantly large proportion of household income is being directed towards motor vehicle expenses.

This is partly due to high car maintenance costs, insurance, parking, petrol, and licensing expenses.

Ideally, a healthy budget should allocate about 35% of household income towards housing costs, living expenses 25%, motor vehicle 15%, savings 15% and debt 10%.

Households can save on motor vehicle-related expenses by exploring car-share programs as viable alternatives to private car ownership.

This concept encourages people to share trips together to reduce costs and optimise collective travelling. Some cities in emerging markets such as Brazil are already making use of car sharing to curb congestion and air pollution.

With car-sharing, users avoid the need to purchase, park, insure and maintain a vehicle. The total cost of car ownership consists of variable costs (fuel and maintenance) as well as fixed costs (purchase price and insurance).

Fixed costs constitute about 60% of the total costs and are incurred regardless of how much a vehicle is used. Using car sharing instead of a private vehicle shifts the cost ratio towards variable costs.

In this way, car sharing users can avoid the fixed costs of owning a car and access vehicles on a pay per use basis, which provides the opportunity to save money and invest more.

Zipcar Concept

In North America, most cities have a transportation plan that focuses on sustainability and using environmentally friendly modes to reduce emissions.

Car-sharing is part of a larger trend of shared mobility. Zipcar, for example, is one of the world’s leading car-sharing networks.

It is a subsidiary of Avis Budget Group and today over a million people across 500+ cities and towns globally having access to over 12,000 Zipcars.

Zipcar provides automobile reservations to its members, billable by the minute, hour or day; members may have to pay a monthly or annual membership fee in addition to car reservations charges.

The main factors driving the growth of car sharing are the rising levels of congestion faced by city dwellers; shifting generational mind-sets about car ownership; the increasing costs of personal vehicle ownership; and a convergence of business models.

Zipcar provides automobile reservations to its members, billable by the minute, hour or day; members may have to pay a monthly or annual membership fee in addition to car reservations charges.

Generally, car-sharing contributes to sustainable transport because it is a less car intensive means of urban transport.

The model

A car-sharing service can be effectively formed by a group of 12 individuals coming together to share 3 or 4 vehicles, which they can rotate occasionally amongst themselves.

According to The Economist, car-sharing can reduce car ownership at an estimated rate of one rental car replacing 15 owned vehicles. Car-sharing presents a potential of sustainable urban mobility.

In Zimbabwe, Piggy has been observing how Vaya lift services have had an impact on urban mobility.

Vaya lift services is a Uber-type ride hailing service that can be easily booked by riders via the convenience of a mobile app.

The success of Uber and UberEats in countries such as South Africa and Kenya has been a motivating factor for Vaya in Zimbabwe.

Some Piggy Tips

Piggy encourages individuals and households to explore car-share programs as viable alternatives to private car ownership.

This concept encourages people to share trips together to reduce costs and optimise collective travelling.

With car-haring, users avoid the need to purchase, park, insure and maintain a vehicle.

This means that individuals and households will be able to save on transport costs through car- sharing.

Piggy also recommends individuals to take the same concept to the next level by using the same social networks to set up social trading groups with the aim of investing and trading on the stock market.

Social trading groups

An approach that works would be for one to create their own WhatsApp-based social groups (friends, family or work colleagues).

They can then invite the trading coach like Piggy to assist with trading ideas and information as illustrated in the infograph.

Investors and traders can also be kept updated on market developments through social trading groups.

The obvious advantage is that such groups also bring a diverse group of people that share insights, experience and investment knowledge.

One can also consider starting or joining a trading group if they would feel more comfortable learning about investing with others or they have been putting off learning about investing and sense that having a responsibility to the group would give them the much-needed discipline.

Sometimes it could just be fun to have a group of people with whom to share company research and discuss investment topics. Learn more about investing and trading by downloading the SECZIM Investment 101 Handbook from www.piggybankadvisor.com.

  • Matsika is the head of research at Morgan & Co and founder of piggybankadvisor.com. — batanai@morganzim.com / batanai@piggybankadvisor.com or mobile: +263 783 584 745.

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