European cities have always been known for their tight streets and small cars and they are about to get smaller. If you are going to be in Paris over the next couple months (lucky) then you will probably see the bubble car being driven around. Okay, the actual name is the BlueCar, but we like the term bubble car because it seems like so much more fun.

The BlueCar is an electrically powered car that will be available for short term rentals in Paris. By short term rentals, we mean as little as a half an hour or up to a whole day. The project, being called the Autolib (a combination of automobile and liberty) is in a test phase that will last for the next two months.

The project has an initial cost of around $321 million dollars with the city itself investing $47 million, much of the rest of the money comes from billionaire Vincent Bollore, whose company won the bidding for the project and makes the BlueCar. There is an inexpensive membership fee and once signed up members could rent the cars as needed for 4 to 8 euros per half hour. Once a membership is purchased, dropping off and picking up the cars at the charging stations would be a simple, automated system, that Bollore’s company would manage.

The project itself was conceived by Paris Mayor Bertrand Delanoe, who also launched a very successful bicycle sharing scheme in 2007 known as the Velib which has been initiated in many other cities. The city of Paris has invested heavily in charging and rental stations throughout the city and hopes that the new, really compact cars will help alleviate heavy traffic and parking problems as well as promote environmental conservation and green initiatives.

Tourist would be able to rent the cars for short term trips around the city but the program specifically benefits Paris locals who don’t own cars or rely heavily on public transportation. According to the Mayor’s office at least three other cities have made inquiries into the Autolib project.

The overall concept is to persuade people to shift away from the idea of owning an expensive vehicle in a crowded city to the idea of using a car as needed. The initial test project will consist of 66 cars and 33 stations but is expected to expand to 3,000 cars and more than 1,000 stations in 2012.

Car manufacturers worldwide are watching the project with intense interest to see the feasibility of such projects. Automakers such as Daimler, Renault and even Nissan have invested 4 billion in similar electric cars but the European market has yet to be tested for large scale sales of such vehicles. If the system works, other cities could easily invest in similar projects and London has even looked into a much smaller scale test project.

Ironically enough, the small, 4 passenger cars are being made by the Italian car manufacturer Pininfarina. Yes, that is the same group that makes the Ferrari and Maserati. While it doesn’t have the same appeal as its sister cars, Mayor Delanoe fully expects the BlueCar to revolutionize transportation in European cities.