Atlantic Cities

Car-Sharing Gets Personal

Car-Sharing Gets Personal
Courtesy Relay Rides

It was only a matter of time before car-sharing cut out the middleman. City residents already rent out their apartments through peer-to-peer programs like Airbnb, which was recently valued at more than $1 billion. Now people can be their own Hertz as well as their own Hilton. Anyone in San Francisco, at least. The Bay Area is home to at least five peer-to-peer car-sharing programs. The latest competitor, Wheelz, launched on the nearby campus of Stanford in September. (There are a number of others in Europe.)

The car-sharing model started by Zipcar has been tweaked in recent times. Paris has launched a test phase for its Autolib program, which will allow one-way sharing. Car-sharing is such a natural fit for cities that many are developing their own programs, as fellow contributor Emily Badger recently reported. But broadly speaking the field still belongs to companies. Peer-to-peer car-sharing expands the rental market to anyone who owns a car. Think eBay meets Zipcar with a Facebook twist.

With Getaround, for instance, owners set their own hourly, daily, or weekly rates. While the company takes a 40 percent commission, Getaround still estimates that car owners who rent their vehicle for 20 hours a week will make more than $4,000 a year. The model is a bargain for drivers, too. In San Francisco, for instance, Zipcar rates begin at $7.75 an hour or $77 a day (plus membership fees); rates at RelayRides begin at $5 an hour or $55 a day and include 160 miles worth of gas. Stories of apartment vandalism have surfaced among Airbnb users, but peer-to-peer car-sharing ventures include impressive insurance packages: Getaround offers full collision and theft insurance backed by Berkshire Hathaway; RelayRides provides $1 million liability coverage; Wheelz has a similar policy but also banks on the trust of a close-knit campus community.

The trend is clearly primed to grow. Last week General Motors announced a partnership with RelayRides that will make it easier for GM owners to join the program. While it typically costs $500 to outfit a car with the locking hardware required by RelayRides, GM will make the technology standard through its OnStar system starting in 2012. In a company statement, GM announced that RelayRides, which is also available in Boston, expects to branch into cities across the country. While many industry experts think car-sharing companies like Zipcar are tethered to large cities, the flexibility of peer-to-peer ventures gives them the potential to thrive in smaller cities.

The GM-RelayRides partnership is designed to boost sales — the more people who drive a GM, the more who might like to buy one — but it may also be good for city congestion. Households that join car-sharing programs "exhibited a dramatic shift towards a carless lifestyle [PDF]," conclude the authors of one recent study, with many one-car households shedding their lone vehicle. Car-sharing seems beneficial to city environments, too. In the same study, researchers estimated that the average car-sharing vehicle is 10 miles per gallon more fuel efficient than those shed by program participants. These benefits will only grow, the authors conclude, as peer-to-peer programs extend the range of car-sharing into lower-density neighborhoods.

Eric Jaffe is a contributing writer to The Atlantic Cities and the author of A Curious Madness (2014) and The King's Best Highway (2010). He lives in New York. All posts »

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