A Different Form of Car Rental

There is a new form of car rental services that is still going through a trial period in a few big cities, including San Francisco.  People are now lending their personal cars to strangers in order to make some more money.  It is not just random people looking to make some money, there are companies behind the idea and have created websites to make it easier for people to do this.  There are different prices depending on the type of car that is being rented and according to the article, the owner of a midsize sedan can make approximately $3,000 a year by renting their car out 10 hours a week.  The only problem is, as of right now, only California and Oregon have allowed this type of car rental.  The other states have not due to legal issues.

The CVP for companies like Relay Rides (including Getaround and JustShareIt) is providing people who would like the use of a car without having to pay to have their own at a relatively low price per hour while also allowing car owners to make money instead of letting their car sit in a parking space while they are not using it.  It even allows for less cars to be on the road because instead of using a rental car that a company went out and bought so that it could make money, you would be using someone's personal car which that person would have regardless.

In my opinion, this type of company can fill a niche that Zipcar has ben looking to fill, but at a much lower cost to the company.  These car sharing companies simply match people who would like to rent a car with people who are willing to let strangers drive their car around for a few hours while they are not using it, so these companies do not have to buy cars for people to rent.  This type of car sharing reminds me of Swaptree in a way because all the website is doing is matching people in a way that is beneficial to all parties involved.  One company, known as Relay Rides, even has  hardware in the cars that could be rented and all a renter has to do is swipe a card over this device, the doors open and the keys are left near the ignition.  This is exactly the same type of deal that Zipcar uses for their cars.

I believe that if a company like Relay Rides becomes very popular and grows to a national level that Zipcar would be in a lot of trouble.  With competitive prices and the same target market, these companies would compete for an already small market.  Relay Rides in my opinion would hold a stronger position in the market because there is no up front cost, just the cost per hour and the cost of gas.  Relay Rides is even looking into a partnership with OnStar, that way it can cut the cost of installing the hardware into the cars.

It will be interesting to see if in the future other states begin to allow this type of car sharing and if it will take and spread over time.