A new venture aims to decrease fuel usage by using the latest mobile phone technology to get the world hitch-hiking again.

Avego, a start up that officially launches next month, will use iPhones to connect drivers with potential carpool passengers, and will also facilitate payment for journeys.

Launched by Irish geographical information systems firm Mapflow, Avego matches a driver's excess seat capacity with people wanting a ride. Using the assisted GPS capability built into the iPhone, it enables drivers to accept passengers who then pay for their ride on a per-mile basis, using Paypal, or direct credit card payments.

"We haven't finalised the pricing in the US but we're thinking between 25-30 cents per mile, with the first mile costing around a dollar," said Mapflow’s executive chair Sean O’Sullivan. "That's five times cheaper than a cab would be, and it's directly equivalent to what public transit would be."

Riders will be able to use any phone with basic SMS service, but drivers will need an iPhone with its built-in assisted GPS functionality, said O'Sullivan. The system, which will become available to iPhone users at the end of next month, pays 85 per cent of a passenger's fee to the driver with the rest going to Avego.

Passengers can also rate drivers, so that people who drive unsafely or are otherwise offensive can be downgraded. When the beta version launches, O'Sullivan also hopes that a feature will be in place to let female participants opt exclusively for women riders or drivers.

"It is estimated that approximately 20 per cent of all driving is done traveling to and from our places of employment," said Geoff Sundstrom, spokesman for the American Automobile Association. "By joining a car pool, or using a service such as Avego to travel to and from work, a motorist should be able to cut their monthly fuel consumption by 10 per cent or more." Using the service could result in a savings of approximately 60 gallons per vehicle per year, or 120 gallons per two-vehicle household, he added.

Avego's is not the first ride-sharing site. Mapflow is currently negotiating with potential partners including UK-based Liftshare, a ten year-old company with 275,000 members. O'Sullivan hopes to co-opt organisations like Liftshare, taking advantage of their member base to bolster his own.