How RelayRides is making money from long-term car sharing


This article originally appeared on GigaOM Pro, our premium research subscription service.

Peer-to-peer car sharing service appeals to the urban and young people, and  that partly explains why college campuses and large cities like San Francisco have been the labs for companies such as RelayRides and Getaround.

One of the benefits of this type of the service is the ability for customers to rent a car by the minute or hour, something that traditional rental car companies don’t allow. But for San Francisco-based RelayRides, an increasing number of its customers are paying for daily, weekly or even monthly rentals, said Steve Webb, the company spokesman. The majority of RelayRides’ revenues come from those types of rentals, he said.

That trend is good news for car owners who are able to part with their cars for an extended period of time. They could make more money with fewer renters. That also cuts the amount of time the car owners would need to meet with their customers — RelayRides switched to promoting the in-person exchange of keys last year when it pushed for a national expansion.

The peer-to-peer car sharing market is growing but remains very small. To scale up, a car sharing service has to market well and sign up a large network of cars, create an easy way for car owners to manage rentals and get paid and for renters to reserve and find the types of cars they want. A good customer service unit to settle any dispute and resolve insurance and other issues is also a must. As GigaOm’s Katie Fehrenbacher pointed out, getting people to feel comfortable using the service remains a hurdle. Webb said many car owners prefer to meet their renters in person before handing over the keys.

Still, RelayRides decided it wanted a way for renters to access cars without having to arrange for a meet up. It announced yesterday the purchase of a competitor, Wheelz, which has developed software that allows renters to find, reserve and unlock cars using their smart phones. An electronic device installed inside the car makes unlocking with the phone possible.

This automated tech was something RelayRides used to hire people to install regularly. But it was too costly and time consuming that the company largely ditched that effort, though it still offers it to car owners who rent out their cars frequently, Webb said. The device and software aren’t proprietary technology and are designed for running fleet services. Buying Wheelz gives RelayRides its own technology that it can then customize and compete more effectively against the likes of Getaround, which gives the car owners the unlocking device that they can install themselves.

Will the long-term focus for peer-to-peer car sharing be a long-term trend? What do you guys think?

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