Whoever thought that renting your bed to strangers would work? But Airbnb has made it work and now Getaround, a peer-to-peer car sharing service, is looking to find similar success by letting people rent out their cars to other users. We covered the company back in January, and today Getaround launched nationwide at TechCrunch Disrupt with an impressive demo aimed at answering many of the questions users have.
The way it works is that people who have a car they want to share can make them available by setting the price per hour or day for their car when they’re not planning on using it. People who need a car are able to sign-up for the vehicle, though the owner has the final say in who can rent their car. When a rental is confirmed, a user gets a key on the Getaround iPhone app to unlock the car.
Getting access to cars is provided through a remote car kit that an owner installs easily in their car. A renter then uses the iPhone app to unlock the car when they arrive. The key is then presumably left inside. Renters insurance is handled by Berkshire Hathaway, which provides liability, collision, and comprehensive coverage that supersedes the policies of both owners and renters during the rental period. That answers one of the big questions that people have about these kinds of services. Getaround’s founder Sam Zaid said the service uses a reputation management system with review and ratings so owners and renters can get a sense of who they’re dealing with. The start-up makes money by taking a 40 percent cut of each transaction.
I still have my questions about what exactly happens in the event of an accident and what the potential danger is for abuse or theft by bad users or criminal. It’ll be interesting to see how many people are attracted to a service like this.
But I like the idea of letting people easily access available cars helping them avoid having to put more vehicles on the road. Zaid said there are 250 million cars in the U.S. that sit idle 22 hours a day. Sharing one million cars can help take some ten million vehicles off the road, Zaid said. And it’s a nice way for someone to make some side cash by putting their vehicle to work. Frost and Sullivan said owners can earn an average of $2,000 a year while renters can save more than $1,800 per year by using a car sharing service.
While Zipcar has found success despite an $85 sign-up fee Getaround could be a much more capital efficient version of Zipcar, given Zipcar actually has to own and maintain its fleet. Zipcar still isn’t profitable after about a decade in existence and rental car companies are still questioning how deeply they want to get into the capital intensive ride sharing business.
Zipcar, of course, isn’t a peer-to-peer system. Getaround, which is free to sign-up, really builds off a community of people that want to share, which catching on with people. It’s been finding strong success in a beta in the San Francisco area with 240 owners and about 1,500 renters so far. Another start-up RelayRides is also trying a similar approach in Boston and San Francisco, as is Spride Share, a startup founded and launched by investor Sunil Paul.
I would love to see these types of services take off. It’s a smart way to help get better use out of our resources and help the environment. It will still take some work to get users acclimated to the idea of sharing their cars. But more and more, we’re seeing people are receptive to the idea that sharing is not just good for kids, it can be good for adults too.