In the earliest days of motoring, cars were hand-built by craftsmen and cost so much that they were never expected to be anything other than playthings for the rich. Then, along came Henry Ford with his dream of making “a car for the great multitude” so low in price that almost everyone would be able to own one.

Ford’s invention of the mass-produced car transformed western civilisation. It changed the shape of our cities by accelerating migration to the suburbs. It gave rise to vast new factory-based industries making vehicles and their components. It opened up unprecedented leisure and holiday opportunities by letting people travel wherever they wanted. It gave us shopping malls, theme parks, motels and McDonald’s.

For a long time, people loved their cars. Many still do. For some, they are a status symbol – a very visible, and mobile, demonstration of their wealth. For others, they are an extension of their personality (or the one they would like to project). Many more derive such a powerful feeling of independence from having a car parked outside the door that, paradoxically, they become dependent on it.

But car ownership is not what it was. As traffic congestion worsens, and mobility is correspondingly reduced, the advantages of owning a car diminish. Its value as a status symbol has declined: in a society where the rich wear jumpers and jeans, a flashy car can simply look crass. The climate change scare has led to a growing demonisation of car drivers, putting pressure on governments to make car use more difficult and expensive.

And in an age where many city dwellers are watching their cars slowly rust by the kerb, undriven from one week to the next while they commute to work on public transport, a nagging question over the economic rationality of car ownership is becoming more insistent. At what point is the feeling of freedom we gain from knowing we can jump in our car and drive whenever we like outweighed by the realisation that we seldom do?

This does not mean car ownership is declining. On the contrary, in Britain the number of cars on the road rose by about half a million last year, as it has done for a decade or more. But it does mean that some people, at least, are beginning to wonder if their cars are becoming more trouble than they are worth.

These people are giving rise to a new concept in car ownership. It is called the car club, and it is a way of driving that not only gets over the high cost of keeping a car in the city, but achieves the increasingly improbable feat of making the driver look virtuous too.

This is not just another name for car sharing – commuters agreeing to share the same car to and from work. The car club is more similar to car rental, with some important differences: the car lives close to your door, you can use it whenever you like and there is no irksome paperwork to do at the beginning or end of each journey.

It works like this. The car club spreads a fleet of cars across a particular neighbourhood, putting them in dedicated spaces on the streets or in car parks. People who join the club are issued with smart cards and pin codes which respectively open the car door and allow them to start the engine. Whenever they want to use a car, whether for 30 minutes or six months, they go online or pick up the phone, locate the nearest available vehicle and book it. All journeys are charged in a single, monthly bill.

The attraction is that it is almost as convenient as owning a vehicle, but without all the costs and headaches that go with it. If, like many Londoners, you have a car but use it only once or twice a week, you can save £2,000 a year or more by selling it and joining a car club because you will effectively be sharing the fixed costs of ownership – depreciation, the annual service, parking costs and so on – with your fellow members.

On top of that, you will be able to bask in the admiration of your friends and neighbours, not just for being so clever but for doing your bit to save the planet. Carplus, a non-profit organisation promoting “responsible” car use, estimates that each car club vehicle replaces six privately-owned ones, reducing the number of cars that have to be built and relieving the pressure on urban parking space. Moreover, car club members typically drive less than they used to because their total motoring costs – including their share of the fixed costs – suddenly become directly proportional to the amount they drive. This gives them a strong financial incentive to consider walking, cycling or using public transport instead. “If you’re going to have to pay £5 to jump in the car and go down the road for a bottle of milk, you’re not going to do it. You’re going to walk or get out the bike,” says Philip Igoe, Carplus’s co-director.

The question, though, is this: as governments force up the price of driving in response to congestion and environmental concerns, will car clubs become the model for car use in a more enlightened future? Or will they only ever fill a niche, with the majority of people refusing to give up the convenience and sense of freedom that car ownership brings?

Car clubs are already more widespread in Britain than many people realise. There are four large operators – Streetcar, City Car Club, Zipcar and WhizzGo – running clubs in 25 of the largest towns and cities. A few other towns are served by independent, local operators and there are also some small, community-based schemes serving rural areas. Carplus says so far, about 28,000 people have signed up as members and there are 1,000 club cars on the streets.

Even so, Britain is some way behind continental Europe and north America, where car clubs have a longer history. The concept first took off in Switzerland in the late 1980s and has since spread to several other western European countries. Carplus reckons there are now 230,000 club members in European cities, with the largest numbers in Switzerland and Germany.

In north America, car clubs have been operating in Canada since the mid-1990s but they have also taken off in the US, where two big companies, Zipcar and Flexcar, now dominate. Carplus says car clubs are operating in more than 60 cities in the US and Canada with a combined membership of more than 83,000.

In Britain, the first commercial operator was City Car Club, which started in Bristol in 2000. Soon afterwards, Avis Rent-A-Car entered the market with a club called Urbigo. But Urbigo did not survive and Britain’s biggest car club company by number of members is now the fast-growing Streetcar, which started in London in 2004 and has since spread to Brighton, Southampton, Maidstone, Guildford and Cambridge.

Streetcar was devised by Andrew Valentine and Brett Akker, two young entrepreneurs who met at Durham university and were still in their twenties when they decided they wanted to go into business for themselves. “Four or five years after university,” says Valentine, “we were both working for very large companies [Valentine for P&O Nedlloyd, Akker for Mars] and, because big companies move slowly, we were both feeling a degree of frustration at not being able to achieve what we wanted to achieve. So we had a conversation and decided we wanted to start some kind of business together.”

They looked at hundreds of business models, Valentine says – “organic foods, trading companies, all sorts” – before stumbling on an article in a US business magazine about the car club phenomenon. “We thought: ‘Wow, what an opportunity in the UK!’ It immediately ticked our boxes. We didn’t want a kind of hobby; we wanted something scalable, and this certainly seemed to be scalable judging by how it had grown in Switzerland and Germany. So that gave us the confidence to launch it.”

Valentine and Akker put all the money they had “and quite a chunk we didn’t” into the venture, says Valentine. But the real struggle was getting the financing they needed to acquire their first cars. “I spoke to more than 70 banks and car-funders [specialist finance companies] before managing to find one that, as they saw it, would take on the risk of a brand new business in a brand new industry run by two guys who had never run a company before. It was a very small, independent car funder specialising in high risk † the very bottom end of the subprime market, basically.”

They started Streetcar with eight cars in south-west London, running the club by themselves. When they had 100 members, and looked at the revenues coming in, they could see the model worked. Since then, “it’s just been a steady process of acquiring more funding, rolling out more cars and growing the infrastructure”. Following a £6.4m investment in March by Smedvig Capital, a venture-capital firm, they now claim a membership of 20,000, have a fleet of 600 cars and hope to achieve a stock market flotation within two years.

One big difference between traditional car rental and the car club is that car clubs tend to foster a sense of community among users. When you use a rented car, you will probably never see it again and you feel no connection with other users. But with a car club, you may use the same vehicle week after week and the other people sharing it are your close neighbours.

Streetcar fosters this sense of community by encouraging a sense of responsibility towards other club users. You are asked not to leave the car with the petrol tank less than a quarter full; if the car gets dirty, you are invited to earn an hour’s free rental by taking it to the car wash and getting it cleaned at Streetcar’s expense; and if you return the car late, keeping a neighbour waiting, you are fined £25 – of which £20 goes to your aggrieved fellow member.

One fan is James Plummer, a recruitment consultant living in Greenwich who joined after reading about it in a local newspaper. At the time, he had a Jaguar XJ6 sitting outside his house “but it was extremely expensive to maintain, people were scratching it all the time and there were the repairs and the petrol costs and heaven knows what else. I just got so hacked off with it that when I saw this, it was the perfect solution.”

Although there was a green angle to his decision, Plummer says, it was mainly a matter of practicality. “I don’t think people owning a thing like a motor car, privately, is a sustainable model,” he says. In his case, apart from the expense, the inconvenience was too great. “There were just too many problems. It took up too much brain space.” Car clubs do have a downside, he concedes. “If you want to use a car and somebody else wants to use it at the same time, you have to work around that. But to me, that’s much less of a problem than owning one.”

Plummer certainly does not miss whatever status his car may have symbolised. “I think that’s why people own cars, largely because of what it says about them as individuals. The car becomes an extension of who they are, which is why so many drive around in these ludicrous, big, off-road vehicles. But to me, that’s total foolishness. As far as I’m concerned, a car is just a piece of metal to get me from A to B.”

Fiona Cameron, another Streetcar member, joined for slightly different reasons. A planning consultant, she lives in one of a growing number of car-free housing developments in London – in her case, a newly built block of flats in Putney. The building has no car park and residents are denied the right to apply for street parking permits, but as a quid pro quo, there are two brand new VW Golfs on the forecourt ready for residents’ use.

Cameron had to sell her car – a Nissan Sunny – when she moved in but says she does not miss it at all. She does not have to pay all the costs of car ownership and there are now so many club cars in the vicinity that “I’ve never been in a situation where I haven’t been able to get one.” Plus, she appreciates the environmental benefits. “I’m a bit of a greenie myself – I cycle to work, I walk, I get public transport – so for me, it’s something I agree with.”

Then, there is Kelly Pawlyn, a mother of two small children living in Shoreditch. Fed up of having her car vandalised, she gave it up a few years ago and switched to public transport, but recently began using Streetcar once or twice a month after discovering it had a car around the corner. Pawlyn thinks car clubs could help wean people off car ownership by offering them a compromise between having a car and relying wholly on public transport. “So many people feel they’re dependent on the car and are afraid to give it a go without one. But I find it hugely preferable, and car clubs make it even better because you can pick up a car when you really need one without the financial burden of having it there all the time and feeling you have to use it.”

These three apart, what sort of people use car clubs? Certainly not those who commute by car. They would end up paying by the hour for a vehicle that was sitting in a company car park all day. And you can also rule out people who do not have a public transport alternative, meaning just about anyone living in the suburbs or countryside.

Zipcar, a US company that has expanded recently from north America into London, says potential users are most likely to live in densely populated urban areas where public transport is good and parking controls are strict – cities where, as Paul McLoughlin, general manager of Zipcar UK, puts it, “owning a car is a pain in the backside”.

McLoughlin draws an astonishingly detailed portrait of the typical car club member. He or she “is between the ages of 21 and 40, university educated, professional in their role and earning more than £25,000 a year; shops online; and has bought organic food in the past. It’s the ethical consumer, someone who’s savvy, likes to try new things and sees themselves as being an early adopter – the same type of guy or girl who’s probably first in the queue for the Apple iPhone when it’s launched.”

Streetcar’s Valentine concurs. Although he and Akker never set out to target a particular demographic, he says, they quickly found that most members turned out to be well-educated professionals – people ready to do the sums and understand the trade-off between the small additional convenience of having their own car and the very high cost. “They’re the sort of people who are likely to agree with the statement ‘My car is not a reflection of my personality’ – they’re much more utilitarian about car use, much more economically rational about it.” Or else, Valentine says, they are motivated by the environmental benefits. “There’s actually more status for many people in being able to say they use a car in a sustainable way than there would be in having a Porsche Cayenne outside the door.”

If the potential for car club membership is that narrowly defined, how many people fit the bill? McLoughlin says in Switzerland, the longest-established market, adoption rates in cities that have car clubs are running at 3 to 4 per cent of all over-21s with driving licences (whether previously car owners or not). Based on that, he estimates there are 125,000 potential car club members in London – and since present membership levels in the city are only 10,000 to 20,000, the growth opportunities for car club companies are outstanding. But commercial opportunities aside, how much difference will car clubs make to the number of cars on the road? Even if 125,000 Londoners join, some of them, such as Pawlyn in Shoreditch, may not be existing car owners – so for them, car clubs could have the perverse effect of increasing the amount they drive. And with nearly 2.5 million cars licensed to London addresses, even a reduction of 125,000 – that is, 5 per cent – would look interesting rather than drastic.

Still, it is early days. In Boston, Massachusetts, Zipcar’s chief executive officer, Scott Griffith, says that in north America, Zipcar’s user base is spreading as the concept catches on. “We don’t have the same skew towards the early adopter that we had three or four years ago. Age and income levels are trending towards the average, from higher income and younger to more middle income and older. We’re becoming more mainstream.”

Back in the UK, Carplus, the non-profit group, believes there could be one million British car club members in 15 years (in a country with 28 million licensed cars). But for that to happen, says Igoe, “we’ll need something different to happen from what’s been happening”. He has asked for government funding to support the establishment of car clubs in areas beyond the cities in which the commercial companies find it profitable to operate. He also wants funding to help broaden the concept’s appeal.

For the moment, it seems clear that, after a century of owning mass-produced cars, the great multitude is not yet ready to go into reverse. Large sections of the population are now car dependent, either physically or emotionally: many live in areas where there is no reasonable transport alternative while others have been driving so long that they cannot imagine quitting the habit. Cameron, the Putney car club member, says: “I’ve got friends who think I’m weird and just could not comprehend life without their own car.”

As environmental concerns grow, however, and the cost of driving goes up, our addiction to car ownership could weaken. And one thing is certain: with the metropolitan chattering classes in the vanguard of adopters, we are going to hear a great deal more about car clubs yet.

Car club economics: How much can I save?

Say you have a new VW Golf 1.6 automatic parked in the street outside your home and you drive 3,000 miles a year. You use the car one evening a week and for half a day most weekends, travelling fewer than 30 miles each time. Four times a year, instead of using the car for half a day at the weekend, you spend the whole weekend away, travelling a round-trip distance of 250 miles. Using figures supplied by the AA, we calculate your fixed costs would stack up like this:

Add in petrol at 11.98p a mile, and your costs rise a further £359.40, making a grand total of just over £4,440.

Car club charges vary, but to take the example of one of Streetcar’s VW Golfs, you would pay an annual membership fee of £49.50. Your local trips would be charged at £4.95 an hour with no petrol charges for the first 30 miles of driving each day, while your longer weekends away would be charged at £49.50 a day with petrol at 19p a mile after the first 30 miles each day. Assuming three hours for the evening trips and five hours for the half-days, your 52 evening trips would cost £772.20, your 48 weekend trips would cost £1,188 and your four weekends away would cost £396 plus £144.40 in petrol charges, making a total of just over £2,550.

So, for this pattern of use, your annual savings would be £1,890. They would be greater if you drove less, but would disappear after about 6,000 miles a year.