The traditional car rental model may be coming under threat from rent-by-the-hour car clubs. Many businesses desperately trying to weather the economic down turn have decided to get rid of their usual fleets in a move to save money. The pay-as-you-go model has become popular in the U.S. and Brett Akker and Andrew Valentine are responsible for setting up Streetcar, a car club that copies the American rent-by-the-hour model. They say that business is booming and turnover has tripled in just three years. They say they aim to have 250,000 members by 2012.

A Streetcar spokesperson said that over the summer the company had noticed that drivers were using vehicles from the Streetcar fleet to go on longer journeys and said that this indicated that car clubs were now being used by customers in the same ways that they would a traditional rental firm. The advantage of the new car clubs is that they charge an hourly rate and the vehicles can be collected from convenient parking spots all over town.

WhizzGo, a car club prominent in the U.K.’s northern towns such a Manchester and Leeds was recently taken over by City Car Club making it the biggest car club in the U.K.

The largest car hire company in the world has taken note and now offers customers a similar car club service through Connect by Hertz which is running in New York, Paris and London.