Tesla wrote in a statement:

Electric vehicles simply cannot be sold side by side with gas vehicles because they will always be a minority item in terms of sales and service volume. Existing franchise dealers have an inherent conflict of interest between selling gasoline cars, which constitute the vast majority of their business, and selling the new technology of electric cars.

Tesla’s resistance to the Texas Automobile Dealers Association reminds me of some of the newer transportation companies like Uber, Relay Rides, SideCar and Lyft are facing policy and legal opposition in some cities and states. Per usual, technology and business innovation is moving faster than policy can keep up with it.

Tesla already has two “stores” in Texas where they can show off the cars, but can’t talk about pricing and can’t actually sell anything directly to customers. And in true Tesla and Elon Musk competitive style, the new bill is pretty narrowly specific for a company like Tesla. House Bill 3351/Senate Bill 1659, which was filed by Senator Craig Estes (R-Wichita Falls) and Representative Eddie Rodriguez (D-Austin), permits U.S.-based companies that make 100 percent electric cars (so no hybrids) to sell directly to customers. Tesla says it’s narrow so it affects the dealers as little as possible.

Tesla has been innovating around its stores since it launched the first one years ago. The company hired George Blankenship to lead the store experience, and Blankenship previously helped design Apple’s store experience. Here’s my interview with Blankenship at our RoadMap event November 2012 (RoadMap 2013 info is here).

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Cleantech and investment in 2013
• After Solyndra: analyzing the solar industry
• Green IT Q1: Cleantech Breaking Out — and Bracing for Hard Times

The emerging sector is called a variety of things like peer to peer car sharing, car sharing 2.o, or neighborhood car sharing, and there’s a half dozen companies who have emerged to try to develop businesses based on this idea. Despite that the market is so new, and the hurdles are somewhat high, many of the companies in this sector have very high profile investors.

Relay Rides, another of these companies, raised money from the venture arms of Google and auto giant GM, as well as August Capital. Wheelz, another competitor, has raised money from traditional car sharing company Zipcar. Clearly forward-focused investors are intrigued with the idea, but is there a solid business model here? If so, it still needs to be worked out.

The business model needs to provide a cut for the car owner, for the insurance, for the initial tech installation or device, and for the cost to acquire users. I go more into the economics of peer to peer car sharing in this GigaOM Pro report (subscription required). Zipcar’s CEO Scott Griffith told me recently he thought peer to peer car sharing is a particularly hard business because of the revenue sharing with the car owner.

The industry hasn’t been without its growing pains. Relay Rides has pivoted a bit, and no longer installs its own in-car connected systems in the vehicles in its network. The company’s original model was to have its staff install the connected devices in the vehicles, which took money and time. Now Relay Rides is relying on its partnership with GM, and Onstar, to supply the vehicle connectivity and control system. And yes, the GM deal was a big win for the firm.

RelayRides also experimented with whether or not it should offer gas cards, and how to cover the cost of gas for very short trips. It’s not necessarily obvious how to set up a system like this, as the only precursor is traditional car sharing like Zipcar, where the company owns the cars and is responsible for their upkeep and gas bills. Both Relay Rides and Getaround have invested in substantial marketing, at least in San Francisco, one of their test markets.

Getaround sells connected kits for cars, which is a less capital intensive way of having the connected device system installed in the cars. But when I’ve talked to some potential investors, and yes competitors, they wonder how secure these systems are.

Safety and security are huge issues for this emerging industry. A company called HiGear, which created a business like this based on luxury cars, was the target of thieves and had to shut down. A startup called Spride Share, developed by investor Sunil Paul, never launched because of the concerns over insurance and the business model. Questions also remain about liability and insurance, which Relay Rides faced in a recent tragic event.

Peer to peer car sharing is an inspiring idea, and one that uses cars more efficiently, which is why some of these top notch investors have supported these startups. But the business models for these companies still needs to be worked out.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• The economics of peer-to-peer car sharing
• Opportunities and risks in the share economy
• What the share economy can learn from the cloud

Alt-transportation overload! Why is San Francisco so chock-full of these services? I’ve been thinking about it for awhile and I’ve got a pretty good idea. Here’s why I think it is:

Tech, startup cluster: One of the more obvious reasons is just the vibrant startup and developer ecosystem in San Francisco. Most of these alternative transportation services are reliant on mobile and web technology development, and having a strong developer and startup ecosystem here means there’s more of a braintrust of young creators willing to work on these tools. For example Scoot Networks’ secret sauce is based on using the iPhone as a dashboard for an electric scooter and Zimride’s new mobile app connects commuters and drivers in real time. In addition, local tech companies can provide the testing ground for some of these projects — both Ridepal and Scoot Networks are starting off by selling services to fellow tech companies.

Muni, BART, taxis and parking suck: There’s actually a real need for alternative transportation in San Francisco. Unlike in New York, where you can get a cab in most places pretty easily, and the subways system is pretty efficient, San Francisco’s public transportation and taxi services are pretty lacking. There are also a lot of commuters that come into San Francisco, but there’s very little affordable parking downtown.

San Franciscans are early adopters: San Francisco-ans have always been early adopters, given the city is the heart of the Valley and was the location of the birth of the Internet. Services that are reliant on iPhone use can actual gain traction here, because of the high penetration of iPhones. San Franciscans also care more than most about trying to have more eco-friendly, and more energy efficient, transportation, like car sharing and ride sharing.

Small enough: San Francisco is also compact and small enough that a startup can launch a pilot project here and can actually cover a decent amount of the city. While the same pilot project might be overwhelmed in Manhattan, San Francisco can offer a more compact scale with which to experiment.

City support: The city of San Francisco is actually generally very supportive of these types of transportation. Anything that can help alleviate the public transportation systems and parking spots in downtown can potentially get support from the city.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Opportunities and risks in the share economy
• What the share economy can learn from the cloud
• Cleantech, meet connectivity: a new era of energy efficiency

Zipcar’s decision last week to make a strategic investment in peer-to-peer car-sharing startup Wheelz surprised many. After all, when it comes to the debate over car sharing models, both sides of the argument — peer-to-peer vs. centralized ownership (Zipcar) — have touted their respective business models as superior.

But beyond the squabbling about whether peer-to-peer or Zipcar has a better capital structure, the investment tells us three other, more important clues about Zipcar’s overall strategy:

1. Zipcar is extremely intent on making college students a cornerstone of its strategy.
2. Zipcar can no longer ignore peer-to-peer car sharing as a strategic threat.
3. College students are a key demographic, not just to sell car-sharing services to but also as a demo to one day sell cars to. Part of this deal is to build a better relationship with not only customers but also automakers.

Wheelz is another way for Zipcar to access a young demographic, since the former distinguishes itself as a peer-to-peer car-sharing startup with its current focus solely on college campuses. It rolled out at Stanford and has plans for UC Berkeley, UCLA and USC. Similar to how Facebook first operated, users need a college email address to join, and the login process even uses a Facebook login. The company believes that closed social networks have the greatest potential because of the built-in trust factor that could matter when loaning one’s car to strangers.

Zipcar CEO Scott Griffith recently told the New York Times’ blog that Zipcar opted not to build its own peer-to-peer car-sharing service because it would rather learn the technological details of working with an owner base from a partner. And while there was certainly a part of Zipcar’s investment that was a defensive move just in case peer-to-peer car sharing prevails as the preferred method of sharing cars, there was one other reason people tend not to think about when discussing car sharing: Zipcar’s potential to market to young people.

In the past six months, Zipcar has itself been intently focused on deploying its services on 250 college campuses with cars supplied by Ford. Car sharing is a way to get cars in front of future customers, and you want to do that as early as possible, because once car owners become brand loyal, it is tough to change those loyalties. Cadillac owners rarely switch to buying Lincolns in their fifties, for example.

And so it is not a coincidence that the other investor in Wheelz is Detroit-based Fontinalis Partners, which is co-managed by the executive chairman of Ford Motor Company, Bill Ford. Adding to the love affair, William Helman IV, a partner at VC firm Greylock Partners and the lead director on Zipcar’s board, became the 15th member of Ford’s board last September.

The under-25 crowd historically has been largely ignored by the rental car companies, and often due to young people’s limited incomes, the automakers could only do so much with the demographic. But car sharing is changing that, offering the driving experience to anyone with a license. And the opportunity to gain greater access to college students’ behavior surrounding car sharing and to put cars in front of them that one day you want to sell to them becomes increasingly attractive. This is why the automakers are aligning themselves with car-sharing companies. GM has a deal with RelayRides to make all GM vehicles built after 2010 and equipped with OnStar rentable in the RelayRides peer-to-peer car sharing system. BMW, Daimler and Volkswagen have either rolled out or are trialing their own car-sharing services.

What is unique about all of these growing relationships among automakers, traditional car-sharing companies and now peer-to-peer car-sharing startups is that the 800-pound gorillas in the room — the automakers — ultimately need to sell cars, not participate in an industry that research shows reduces car ownership. The fact that automakers aren’t fighting the car-sharing phenomenon the way the hotel lobby has fought Airbnb and the music industry fought Napster back in the day suggests a certain maturity in their outlook.

Car sharing is a byproduct of the Internet age (you need online social networks to find and share cars), and if the automakers can build partnerships and exploit the emerging business model to better understand young consumers and make strategic investments in and partnerships with the best car-sharing companies, be they Wheelz or Zipcar, then they start to become part of the emerging ecosystem. That continues to give them access to young drivers and encourage driving as the ultimate transportation experience. College campuses are a great place to start.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Why Zipcar is tapping the college market
• Opportunities and risks in the share economy
• Ups and downs for cleantech in Q1

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Cleantech third-quarter 2012
• Opportunities and risks in the share economy
• The case for SSDs in the data center

Cars	Drive the next always-on gadget Katie Fehrenbacher	Work	Work is no longer a place Jessica Stillman
Stuff	Access trumps ownership Katie Fehrenbacher	Data	Data is the new digital currency Derrick Harris
Media	We are all media now Mathew Ingram	Identity	Identity is an industry Mathew Ingram
Body	Your doctor is a chip Stacey Higginbotham	Travel	Go anywhere, instantly Colleen Taylor
Web	The future web is alive Om Malik	Location	Where is the new who Ryan Kim

Images courtesy of Tesla Motors, DaveBleasdale, Petteri Sulonen, KatBPhotography, Urban Aquarium Video and Light, xurde, guiguis, kowitz, Marc_Smith, Aperturismo.

Go to page 2 (of 11) on GigaOM .

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• The future of mobile health, 2011–2016
• Connected world: the consumer technology revolution
• 12 tech leaders’ resolutions for 2012

HiGear launched just two months ago, and has a network of about 200 cars that are being actively rented out to members of the network who pay prices anywhere between $125 to $600 a day to drive the cars. You can find some real fancy cars like a Dodge Viper ($600 a day, photo to the right), a Mercedes Benz SLK ($245 a day), and a 1965 Ford Thunderbird ($100 per day). HiGear provides up to $1 million in insurance and has stringent conditions for its drivers, like no DUIs in the past five years, no accidents in the past three years, and drivers under 30 can’t rent cars that have more than 300 horse power (bummer for the Valley’s underage wunderkind).

While there are a variety of peer-to-peer car sharing companies trying to build businesses out there, like RelayRides and Getaround, HiGear has taken an alternative — and possibly more lucrative, in the short term — approach. Getaround and RelayRides are focusing on renting out neighborhood cars for rates like $5 to $10 per hour, and many drivers use them to make small trips around town or half day trips out of town on a weekend.

In contrast Hussain tells me that the average HiGear rental is for 3 days, for about $410, and drivers are renting out their cars about twice a month. In essence the cars don’t have to be used all that much to help the car owner make some money, because the rates are higher and are per day (instead of per hour). HiGear’s members are mostly pretty well-off themselves, and include many professionals that already have cars of their own but that want to drive different sports and luxury cars.

HiGear is also different in that the car owner has to meet with the renter (often times in a public place) to exchange keys in person, and to make sure that the renter knows how to drive the car (many of the sports cars are manual). So HighGear doesn’t install the automated locking and unlocking devices in the car like RelayRides does (or Getaround has with a kit). That brings down HiGear’s costs, too, as installing devices in every car in the network can get expensive. Hussain told me HiGear looked into installing the automated devices, but stopped that plan because car owners wanted to meet with the drivers in person to “feel them out.”

Hussain tells me that HiGear will use the newly-raised funds to keep building out its website and bring in more members, including launching in LA in the coming weeks.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• The economics of peer-to-peer car sharing
• Connected world: the consumer technology revolution
• Opportunities and risks in the share economy

You’re probably wondering: are these companies really green? Well, digital technologies have a unique ability to segment goods into service increments — by day, hour, even minute — and can lead to the use of resources far more efficiently. For example car sharing services lead to removing a significant amount of cars from the roads. At Green:Net, Airbnb’s co-founder Joe Gebbia and RelayRides CEO Shelby Clark, chat with Collaborative Consumption Lab’s Lauren Anderson.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• What the share economy can learn from the cloud
• Cleantech third-quarter 2012
• Opportunities and risks in the share economy