The company car is dead, according to Paul Balmont, managing director of Commonwheels. As head of an organisation promoting alternatives to private car ownership, you might think, in the famous Profumo Affair phrase: “He would say that, wouldn't he?”

But he insists that views are changing and that more people are embracing the age of austerity by giving the thumbs-down to ‘flash cars’.

A tax crackdown has also deterred employers. Stuart Crook, of Wellers Accountants, said: “In a nutshell, the private mileage needs to reach a certain level to make the benefit worthwhile. This calculation is based on the CO2 emissions and MPG of their car.

“Employers who still pay for some, or all, of employee company car fuel need to review the cost to the company, the cost to the employee — and whether there is a better way of doing things.”

At a recent meeting for Oxford members of Commonwheels, Mr Balmont said the city was one of his organisation's top locations.

It is also one of just four UK towns served by the US ‘rent-by-the-hour’ car company Zipcars, which last year acquired UK-based Streetcars. Commonwheels is tiny in comparison to Zipcars, and is a not-for-profit social enterprise rather than a public company quoted on the Nasdaq stockmarket.

However, it is Oxford’s first and biggest car club. Since it was founded four years ago, Commonwheels has expanded beyond its original base in East Oxford, where it was promoted by local residents. It now has 15 cars in East Oxford, Headington, Cowley and Iffley, compared to Zipcars’ 12 in north and west Oxford.

At least one car-hire giant is also dipping its toe in the water. Hertz on Demand has a selection of rent-by-the-hour vehicles in and around London.

A spokesman for Hertz, Caroline Trotman Dickenson, said: “Accountants PwC use it in London and Hertz is talking to fleet managers about the advantages of using it as a pool car solution. It is easier than having your own fleet of cars available, and employees can also use it outside work.

"For an employee who doesn't need to use a car every day, rather than supplying them with a company car, it means that a car is on site when they need it, and you do not have the tax implications. You just pay an hourly rental and for the fuel.”

Oxford is next on the company’s radar, with a fleet of electric cars promised, although Ms Trotman Dickenson could not give a launch date.

Marcus Idle, managing director of website design company Oxford Web, based near the ring road at Sandford Gate, is one of several business owners using Commonwheels.

He has a good choice of cars within cycling distance, and sometimes chooses to book one without prominent markings, so that clients cannot tell the difference.

“There are some people — and you can see them coming — who equate success with a nice watch or driving a big car. When you drive a car as part of your business, you need to forge links with all kinds of people, and you do not want to put off a potential customer by driving a car that says ‘this is part of a car club scheme and I do not own a car’.

“However, at other times, people are interested and you can explain the idea,” he added. “It does not work if you have to drive every day, but most of our work is done by email or phone, so it is ideal. Some people join a car club because it is green, but most people weigh up the costs.”

Another Oxford business using Commonwheels is the New Internationalist magazine, which campaigns for global justice and has green issues as part of its founding ethos.

Co-director Michael York said: “We wanted to support them with a car parking space because we believe car clubs encourage people to give up their cars. As a business, we have a green travel policy, encouraging people to only use a car if there is not a public transport option, so the car club is ideal for us, particularly as it is parked right outside.”

He added: “If companies can offer car-park space to a car club car and let other members use it outside office hours, that is a way businesses can link up with the local community.”

Mr Balmont is now targeting small businesses to encourage more weekday use of the cars.

“Commonwheels can be a great alternative to company cars, paying staff to drive their own cars, taxis or standard hire cars. On our standard ‘pay as you go’ prices, cars parked close to the office can be booked with very little notice and for as little as half an hour.

“Why pay for a full day's car hire when you only need it for three hours, or stand waiting for the taxi that is 30 minutes late?”

Commonwheels is now gearing up for a members’ share issue to fund future expansion, including bidding to run company-owned fleets, using nifty telematics to allow businesses to save admin costs.