Car Sharing: Matchmaking for Cars and Drivers

Would you be willing to rent your car to a complete stranger for some extra cash? Car sharing start-ups are betting that you will. Getaround, RelayRides and JustShareIt are three new start-ups currently testing peer-to-peer car sharing services in Austin, San Francisco, San Diego, Boston and Portland.

So, just what is car sharing? The concept behind peer-to-peer car sharing is simple. Most people don’t use their cars every single day, especially in larger cities where public transportation or carpools offer an alternative commuting option. And for individuals headed out of town, renting their car out is an easy way to make the vacation pay for itself (or at least cover the room service bill). RelayRides estimates that renting a car 10 hours per week could net up to $3,000 in extra income each year.


Similar to Airbnb, the popular peer-to-peer apartment and house sharing service, car-sharing start-ups connect car owners with would-be renters. Car renters can rent by the hour or the day, paying a flat fee or hourly rate that covers both the rental and insurance. A rental averages between $6 and $8 depending on the make, model and condition of the car. Older cars might be as little as $3 per hour, while high-end models like a Tesla Roadster rent for $50 to $75 per hour.

Car renters can rent by the hour or the day, paying a flat fee or hourly rate that covers both the rental and insurance.

Like the corporate car sharing service ZipCar, RelayRides installs hardware inside each car. A smartcard reader, mounted on the windshield, is used to gain entry. The keys are left hanging in the ignition, so there’s no need to interact with the car’s owner. Gas is included in the rental fee. A GPS receiver tracks the car’s location, and a remote off switch can be activated to prevent theft. The hardware package, including the smartcard reader and GPS receiver, costs around $500. RelayRides installs the hardware for free in each car. JustShareIt uses similar hardware, although car owners pay the $249 hardware and installation fee.


In contrast, Getaround is decidedly low-tech. The service connects car owners with would-be renters via Facebook. Renters and car owners typically have at least one Facebook friend in common. This small but meaningful connection is designed to build trust. Renters and owners also exchange keys in person, which can be a hassle if the owner is out of town or simply does not wish to meet every person who rents the car.

In comparison to traditional car rental companies, peer-to-peer car rental could be a great deal for temporary rentals. At $6 an hour, renting a car for an afternoon is typically less expensive and more convenient than going through a major rental company.

Each shared car takes 10 cars off the road and reduces personal carbon emissions by over 40 percent.

A car sharing program is also more environmentally friendly, allowing for “collaborative consumption.” Consumers share a common resource, rather than using a car that’s been purchased solely for rental purposes. According to Getaround, “Each shared car takes 10 cars off the road and reduces personal carbon emissions by over 40 percent.”

But what about insurance liability? While Getaround, RelayRides and JustShareIt all provide their own insurance coverage for renters, it remains unclear whether a car’s owner could also be held legally liable in the event of accident. What if an accident victim sued everyone involved, including the car’s owner? Only California and Oregon have passed laws exempting a vehicle owner from any liability in the event of a car-sharing rental accident.

For now, peer-to-peer car sharing programs are still in the beta testing stage, and it remains to be seen whether Getaround, RelayRides and JustShareIt will piggyback off Airbnb’s overnight success.

If a car sharing program were available in your city, would you rent your car out for some extra cash?

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