Melbourne lord mayor Robert Doyle might have created a nice diversion yesterday with his Herald Sun (and Daily Telegraph) thought bubble on banning bicycles in certain CBD streets, but the real transport issue for councillors this week is the future of Melbourne’s car-share scheme.

As sustainability website The Fifth Estate asked in this lengthy piece yesterday: “Is Melbourne about to kill car share?”

The matter came to a head at a City of Melbourne committee meeting on Tuesday night after a 90-minute debate (starts about halfway through this audio file) when councillors voted in favour (see page 3) of a dramatically changed regulatory system in spite of passionate pleas from the three car-share companies and dozens of their customers.

The officer advice and the consultant’s report make for interesting reading, but the 8-1 vote was in favour of a recommendation to the full council on July 28 that will quadruple council’s existing revenues from the car-share companies and force them to use two private off-street spaces for every one council space they occupy.

For mine, City of Melbourne decision-making is being distorted by defence of our $100 million-plus in parking revenue and we should go with the sustainability benefits of growing car-share at the expense of marginal six-figure parking revenue.

Car-share schemes tend to be embraced by more progressive councils. Brisbane has been dominated by the LNP ever since Campbell Newman was first elected in 2004, and they’ve done sod-all on car-share.

Sydney lord mayor Clover Moore has gone completely the other way, and Sydney has 600 spots and an astonishing 20% of residents as members.

Sydney charges the car-share companies $1800 for signage and line marking and a one-off $400 administration fee, which is based on cost-recovery, but after that it is free or costs the equivalent of a residential street parking permit.

The Australian car-share industry was pioneered by GoGet, which was set up by a couple of blokes in Newtown back in 2003 who remain in control of the private company after being supported by some third-party investors.

It is easily the biggest player, with about 2000 cars and 90 staff. Flexicar is the second largest and it is owned by Hertz, the US car-rental giant capitalised at $10 billion.

Car-sharing is clearly a business that is largely dependent on council support. The more you support it, the bigger it gets.

None of Melbourne’s progressive neighbouring councils are charging for car-share spots, and they have all been helpful in supporting the service, with the exception of Stonnington, which tends to be more conservative given it includes Liberal-dominated suburbs such as Toorak.

If progressive Melbourne set a precedent by creating price and regulatory barriers to growth, there are fears other councils will follow.

From a policy point of view, if Melbourne adopts what committee recommended on Tuesday night, it will become the first council in Australia to set a price in non-CBD areas that is higher than a residential parking permit.

Liberal-dominated Mosman recently proposed introducing a $300 charge for car-share spots but pulled back when it became apparent that GoGet would probably pull out of the municipality.

Melbourne’s left-field proposal to force the car-share companies to secure two off-street parks for every council spot they are allocated has bemused the operators as less than 20% of their entire bays at the moment are off-street, yet Melbourne is saying this must jump to 70%.

Customers clearly prefer collecting their cars from the street and accessing apartment towers introduces a whole new logistical challenge, plus safety and security issues.

Clearly, the most effective way to get off-street going in apartments is through the planning process as it has been a hard slog retrospectively introducing the service where car park ownership is strata-titled.

Australand (now owned by Frasers of Singapore) has been particularly innovative with its One Central Park development in Sydney, which has a pod of 44 GoGet spots for residents.

The main objection by City of Melbourne councillors on Tuesday was the level of subsidy being provided to private businesses.

One submitter observed that the City of Sydney was more supportive because its car-share service was guided by the sustainable transport division, whereas Melbourne left it with engineering services, which is responsible for parking revenue. I’m still struggling to understand the focus on “business subsidy” given the sustainability outcome that shows that for every new car-share spot, 10 fewer privately owned cars will be parked in the same area cluttering the streets.

Surely these car-share companies should be viewed as contractors delivering on sustainability and making the cost of doing business and living in the city cheaper for ratepayers given it costs about $10,000 a year to own a car.

Not one submitter has yet contacted the council supporting the proposed policy change.

The influential urbanist Alan Davies produced this excellent 2012 piece on car-share services for Crikey, and it would be good for undecided councillors to hear his view before the all-important vote on July 28.

*Stephen Mayne chairs the finance committee at City of Melbourne and was not paid for this item