Maintenance, gas, parking, depreciation—they all add up to turn cars into financial black holes.

So it's no surprise that leaner city and state government budgets, plus high gas prices, are prompting officials to scale back on motor-pool expenses.

The solution they've increasingly turned to this year? Outsourcing their fleets to Flexcar, a private, Seattle-based car-sharing company aiming to apply its operating model beyond the private sector.

Flexcar, whose Honda Civics are familiar sights on Portland streets, has proven popular with corporations and private citizens since first coming to the city in 2001, when it merged with the pioneering, 3-year-old CarSharing Portland. When they need a car, Flexcar members call a toll-free number or sign in to the company website, where for $9 an hour they can reserve one of the company's 100-plus vehicles parked around Portland.

Three years ago, the city's Bureau of Environmental Services and Portland Development Commission signed on to the service, says Steve Gutmann, Flexcar's director of business development and sales.

In January, the State of Oregon signed a three-year contract with Flexcar to supplement its downtown Portland motor pool of about 40 cars.

And in August, all of Portland city government began a five-year contract with Flexcar, cutting the number of cars in its motor pool from 25 to 13, with city fleet manager Bruce Cross anticipating further cuts in the future.

City employees register with Flexcar and use the service the same way as private citizens, but Portland picks up the tab. Compared to the $100,000 annual budget of the motor pool, Cross estimates the cost of using Flexcar for a year to be $70,000—a 30 percent savings driven in part by Flexcar charging the city a reduced rate of $7 an hour (Dan Clem, State of Oregon fleet manager, says it's too early to tell how much money the state has saved).

Already, Cross says Flexcar use has exceeded expectations, totaling more than 600 hours last month. He predicts that business travel by city employees will soon be done using Flexcar almost exclusively.

"I have not heard a negative comment about the Flexcar project in about three months," Cross says.

Tim Cain, head of the city's 1st Avenue Garage, says he's seen a dramatic decrease in the number of people using the city's cars since the Flexcar program began. But not everything he's heard about Flexcar has been positive.

"I have people who come and use pool cars, and they've had some problems [with Flexcar] as far as scheduling and timeframes," Cain says.

The Portland contract comes at a time when budget-conscious cities across the country are looking to cut costs by cutting cars, says Flexcar's Gutmann. The City of Berkeley, Calif., is already outsourcing its motor pool with one of Flexcar's competitors, while Gutmann says other cities are noticing Portland's program.

"The level of interest has increased dramatically in the last six to eight months, I think largely due to the success of the City of Portland," says Gutmann.