From the Super Mario Wiki, the Mario encyclopedia
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A Garbage Pod is large garbage can with a rocket tied to its bottom, intended for space travel. Garbage Pods were used for transporting unwanted waste from Koop Star's Intergalactic InSinkErator into outer space. According to Mouser, a Garbage Pod is biodegradable.
Only one Garbage Pod is ever seen in The Super Mario Bros. Super Show! episode "Star Koopa". After surviving the dangers of the Intergalactic InSinkErator, Mario, Luigi, Princess Toadstool and Toad find themselves sealed inside a Garbage Pod, which is then ejected into outer space, where it crash lands on the surface of the Mushroom Colonists' Planet.
A Garbage Pod appears to be somewhat smaller than a conventional car, as Mario and his friends all managed to fit inside one, despite not having much room to move around in.