RelayRides — which raised money from GM’s venture arm — says it is the first third party to use OnStar’s API, and later this Summer GM plans to open up the API to other third party developers, too. OnStar uses satellite-connected on-board units to offer connected services, but the primary application to date has been to summon help in the case of an accident or other emergency. GM offers the service to car buyers free for a few months to try out before initiating a monthly fee — the service can cost $200 to $300 per year — and is looking to offer more services to retain those trial customers.

Using the OnStar system, RelayRides members can use a mobile app to reserve a car and unlock and lock the door. Owners of the vehicles can earn money from renting out their cars, and set the price for how much they want their cars to be rented. Depending on the location of where the car is parked, car owners can earn hundred of dollars per month, says RelayRides.

RelayRides, which first launched in the Summer of 2010, has been building a network of car owners and drivers interested in using cars a service. For much of the time, RelayRides has been installing a communications device in the vehicles to facilitate the reservation process, which can be a somewhat expensive and labor-intensive process. But in the GM cars, the OnStar system acts as that control gadget. RelayRides also won’t be installing communication devices in its customer’s cars in the future, but will use a combination of the OnStar system and will facilitate key sharing for non-OnStar subscribers.

RelayRides isn’t the only peer-to-peer car sharing company out there. Getaround, which sells a kit to its car owner customers, and Wheelz, which has an investment from Zipcar are two other ones. The service can be envisioned as sort of “car sharing 2.0″, in contrast to traditional car sharing networks like Zipcar and CityCarShare, where the organization owns the fleet of cars.

One of the major hurdles with these services is security. HiGear, a high-end luxury peer-to-peer car sharing company was the target of thieves and shut down. Investor Sunil Paul backed away from his idea to launch peer-to-peer car sharing via a startup called Spride Share because of his concerns over insurance and the business model. RelayRides says the OnStar system makes its peer-to-peer service more secure, as the OnStar vehicles can be controlled and tracked in the network.

Auto makers have an interesting relationship with car sharing. Car sharing has been proven to lead to fewer cars being purchased, so in a small part, car sharing is cannibalizing the auto maker’s business. But a variety of automakers are realizing they can benefit from car sharing in various ways, including getting their cars in front of the young and urban who normally wouldn’t be test driving their cars. Other companies, like Daimler, and Volkswagen, are trialling their own car sharing pilots.

RelayRides is backed by over $13 million in venture funding from investors including Google Ventures, August Capital, Shasta Ventures and General Motors Ventures.

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• Connected world: the consumer technology revolution
• Opportunities and risks in the share economy
• Cleantech, meet connectivity: a new era of energy efficiency

Today in cleantech comes straight to you from the cleantech section of GigaOM Pro (subscription required), our premium research service:

Consumer Affairs is out with new polling figures this week with regard to how Americans feel about alternatively fueled vehicles. We’re heading into the summer and with gas well above $4 in many cities and $5 gas on the horizon, 73 percent of drivers said they would consider an alternatively fueled vehicle, from a hybrid to flex-fuel, which runs on E85 ethanol.

The top consideration in buyers’ next vehicle purchase was fuel economy (37 percent) followed by a distant second being quality (17 percent), with younger buyers disproportionately interested in alternatively fueled vehicles. The automakers are also aware that car ownership has lost some of its luster, particularly among young people and Zipcar has done studies showing young people care more about social networking online than owning a car.

There’s definitely a generational shift going on as young folks care about fuel efficiency and environmental impacts, which makes them question the absolute need to own a car in the first place.

Other things we’re reading about today include:

• Zipcar: Two moms, a business idea and $68 in the bank: The story of Zipcar’s early beginnings.
• IO focuses on modular data centers and ways to manage them: Using the iPad to manage your data center. What can’t that thing do?
• HP developing “net zero” data center: Matching the availability of solar power with the need to do compute tasks to achieve a “net-zero” data center. From HP.
• Why I suspend disbelief: Venrock Capital’s Matthew Nordan on why he listens to crazy pitches and why he thinks physics today is where biology was in the 70s.

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• Ups and downs for cleantech in Q1
• Cleantech third-quarter 2012
• Opportunities and risks in the share economy

This article originally appeared on GigaOM Pro (subscription required):

Good, but not great, growth has Wall Street punishing car sharing market leader Zipcar, which IPO’ed at $18 last year, zoomed to $28 and now sits at around ten bucks. But the question on many people’s minds is: What is Hertz doing?

The argument for Hertz successfully competing with Zipcar goes like this: Hertz doesn’t require an annual membership fee (Zipcar charges $60), has no late fees (Zipcar charges $50 per hour), it allows one way rentals in some locations, and yeah, it already has a massive fleet of diverse cars.

On paper, Hertz getting into the car sharing game doesn’t sound good for Zipcar, even if you believe there is room for multiple players and that this is a market with considerable future growth. There aren’t good market projections for this nascent industry, though a recent analysis from RAND Corporation took a stab at it, suggesting that with improving tech to locate and rent vehicles combined with favorable government policy, the industry could include 7.5 million users, more than ten times where it currently sits.

Hertz’s CEO Mark Frissora made news in March when Bloomberg reported that he had considered buying Zipcar. But confident that he could leverage Hertz’s existing fleet of 375,000 cars and its customer relationships, he ultimately decided to launch Hertz’s own service. Referring to the New York market, Frissora has said Hertz has 35,000 cars there and once they’re all enabled for hourly rental, Zipcar will “have a real problem.”

In 2009, Hertz acquired Paris based car sharing technology developer Eileo, which makes the Zibox that Hertz is relying on to convert its fleet. The Zibox immobilizes the engine and interfaces with the reservation system to allow drivers to enter and start the car. Hertz offers drivers a key fob that acts like an RFID card. In testing it found drivers wanted a key that they could take with them on their key chain that controls entry to the car. Drivers wanted to feel like they were carrying a car key. The actual car key that starts the car is tethered to the car so that customers don’t take it with them when dropping off the car.

How Hertz will do it

I caught up with Jordan Reber, the VP of Hertz On Demand, who is overseeing the global ramp up of Hertz’s hourly rental service. In our discussion about Hertz’s entry into the car sharing market, Reber noted, “It’s what people tend to ignore when they compare us to competitors, it’s the size of our logistics and parent infrastructure. The issue of car sharing is scale. When those cars are tech enabled, we’re able to put them where our customers want them, be it Omaha or New York City.”

And it’s this scaling up that will ultimately prove whether Hertz can be a market leader in car sharing. Zipcar currently has 709,000 members and 9,300 vehicles in the U.S. and Europe. Hertz has been fairly measured in its ramp up so far with 160,000 worldwide members and about 1,100 cars available. On the question of how much of the Hertz fleet would convert to hourly rentals, Hertz’s Public Affairs Manager Paula Rivera would only say that it would occur over the next 12-18 months and that Hertz is “aiming to get a significant amount of the fleet installed with the [Eileo] technology.”

If the ramp up feels slow, it’s partially because Hertz is being very careful not to cannibalize its core car rental business and Reber made a point of saying that internal data shows that 70 percent of Hertz On Demand users use the service for hourly rental or after hours use.

Moreover, if most in the car sharing market view car sharing as a discrete business, Hertz is far more inclined to view it as a potential source of incremental revenue where it can gradually pick off markets like New York where it’s well positioned with a high volume of locations and available cars. There are likely to be regional advantages that flow toward any player with good logistics in a given city.

You also don’t get the sense that Hertz wants to launch whole hog with national campaigns and run into the car sharing space (it has minimal presence in other markets like San Francisco). It’s not as if Zipcar is making money hand over fist right now as it hopes 2012 will be its first year of very modest profitability.

What’s interesting about the figures is that Hertz has racked up 160,000 members worldwide (90,000 in the U.S.) with a fraction of the number of hourly vehicles in circulation as Zipcar. Sure a big reason for this is that joining Hertz On Demand is free, but that doesn’t make it any less real that the company has millions of existing customers to market to, so that it can get RFID enabled key fobs into those hands so they can easily rent a car. Reber added that Hertz is open to enabling cars to be opened with smartphones when he believes near field communication technology and mobile payment systems are more mature.

Whatever the rate of Hertz’s ramp into car sharing, it’s not likely going away as a priority for the company. Reber was frank in saying, “Car sharing is closely controlled and watched by our CEO [Frissora]. It’s a big focus for us here, not because of me but because of our CEO.” At this point it’s just a question for Hertz of incrementally executing in key markets, which should be enough to give Zipcar a minor headache.

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• Can Hertz shake up car sharing?
• Cleantech third-quarter 2012
• Opportunities and risks in the share economy

Zipcar actually has seen some success with these specialized vans already, as the U.K. car sharing company Streetcar, which Zipcar acquired, already offers this service. For now, Zipcar is only launching the pilot in San Francisco, and will offer 15 Ford E-150 cargo vans around the Bay Area at a cost of $14.75 per hour and $99 per day. Zipcar says the Ford E-150 vans will be able to fit a queen-sized mattress and will be ideal for picking up furniture, transporting musical equipment and moving apartments.

Zipar’s move into specialized vehicles for moving stuff shows the potential of using its network to expand the sharing of goods and services. Zipcar has 650,000 members that pay per hour to rent its 9,500 vehicles across the U.S., and there’s a good chance Zipcar can get those 650,000 members to pay for other renting services, like vans. Zipcar turned its first quarter profit in a decade recently.

Car sharing is the flagship business out of the trend of collaborative consumption, or using the web and mobile to share goods and services. Other services include peer-to-peer car sharing like Getaround (neighbors renting out their cars to other neighbors), office space sharing like Loosecubes, and even sharing of smaller goods like baby clothes via ThredUp. This trend relies on ubiquitous connectivity, customer comfort with sharing goods via the web, and a growing population looking to share limited resources.

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• Opportunities and risks in the share economy
• Connected world: the consumer technology revolution
• Cleantech, meet connectivity: a new era of energy efficiency

It’s not a passing fad. In fact, the four original markets –- Boston, New York, San Francisco and Washington D.C. –- continue to grow revenue at a 23 percent rate. And who cares about slightly more modest top line growth if there’s a path to profitability coupled with subscriber growth that is 25 percent year over year. If Zipcar can keep this up, I think the company should be considered as a model for success in the share economy.

Here’s other stories Adam has been reading about today:

• US wind turbine prices fallen by a third since 2008: The report out from Lawrence Berkeley National Laboratory looks at not just the cost declines since 2008 but also why costs increased between 2002 and 2008, as well as the issues surrounding the U.S. dollar’s weakness and its impact on pricing.
• Membership opens for EV car sharing in San Diego: Daimler backed Car2Go has launched their fleet of all electric two seaters in San Diego. It’s the first fleet of all electric EVs for car sharing in North America. Interestingly, drivers can drop the car anywhere in the approved zone and Car2Go ensures that cars get to a charging station when necessary.
• NIST: We’re from the government and we’re here to help: GigaOM’s Barb Darrow takes a look at the new technology roadmap from the National Institute of Standards and Technology (NIST) that should speed the government move to the cloud. Plagued by concerns about security and accountability, the government has been slow to adopt the cloud but the new guidelines should help somewhat.

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• Car sharing and the impact on the automotive industry
• Electric vehicle outlook: 2012–2017
• Cleantech third-quarter 2012

A few of the stocks I covered yesterday are still down — like EnerNOC, but that’s due to company-specific issues. Most are slightly up, though many didn’t return to the trading levels pre-market sell-off. Here’s a run down on where the stocks I covered yesterday are at this morning:

Solar

• Solar panel maker SunPower up 3.06 percent.
• Chinese solar panel maker Suntech rises 4.13 percent.
• Thin-film solar maker First Solar is still down .40 percent.

Biofuels

• Biofuel maker Gevo is back up 10.87 percent.
• Algae oil company Solazyme is up 3.07 percent.
• Biofuel maker KiOR is down even more: 3.50 percent.
• Biofuel maker Amyris is up 0.75 percent.

Electric car and batteries

• Lithium ion battery maker A123 Systems is up 11.70 percent.
• Electric car maker Tesla Motors is up 5.67 percent.
• Battery maker Ener1 is up 6.75 percent.

Smart grid

• Smart meter and network maker Itron is up 5.14 percent.
• Demand response company Comverge is down even more, by 1.38 percent.
• Demand response leader EnerNOC crashed even more, by 36.98 percent . (Yesterday’s market crash is combined with EnerNOC’s own weak earnings statement and a downgraded position to hold by a prominent analyst).
• Smart meter and network maker Echelon is back up by 5.51 percent.

Random:

• Car sharing company Zipcar is up 2.75 percent. It hasn’t fully recovered from yesterday.
• Clean Energy Fuels, which makes natural gas infrastructure for gas-powered cars, is still down by 5.80 percent.

Image courtesy of dizznbonn.

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• A 2011 Green IT Forecast
• Green IT’s Q4 Winners: Wind Power, Solar Power, Smart Energy
• Report: Cleantech’s Third-Quarter Growing Pains

Solar:

• Thin film solar maker First Solar is down 5.87 percent.
• Solar panel maker SunPower fell 8.26 percent.
• Chinese solar panel maker Suntech has fallen 7.55 percent.

Biofuels:

• Biofuel maker Gevo is down 11 percent. Ouch.
• Algae oil company Solazyme crashed 8.80 percent.
• Biofuel maker KiOR is down 5.57 percent.
• Biofuel maker Amyris dropped 5.40 percent.

Electric car and batteries:

• Lithium ion battery maker A123 Systems crashed a whopping 14.73 percent.
• Electric car maker Tesla Motors is down just a touch at 1.82 percent.
• Battery maker Ener1 is down 7.33 percent to 0.73.

Smart grid:

• Smart meter and network maker Itron fell by 9.05 percent.
• Demand response company Comverge crashed down 15.09 percent.
• Demand response leader EnerNOC dropped by just 4.75 percent.
• Smart meter and network maker Echelon fell by just 2.76 percent.

Random:

• Car sharing company Zipcar is down 15 percent. Another ouch.
• Clean Energy Fuels, which makes natural gas infrastructure for gas-powered cars, dropped 10.91 percent.

Image courtesy of Yoshimov, creative commons.

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• A 2011 Green IT Forecast
• Green IT’s Q4 Winners: Wind Power, Solar Power, Smart Energy
• Ups and downs for cleantech in Q1

So-called collaborative consumption has also started to make some companies a significant amount of money. Here are 10 signs I’ve seen that a web-based sharing economy is movin’ into the mainstream:

1. Airbnb $1 Billion Valuation. The peer-to-peer apartment and house rental startup Airbnb is reportedly raising a $100 million (or more) sized round, at a $1 billion-plus valuation, led by Andreessen Horowitz. Previously, the Y-Combinator company had only raised $7.8 million. No doubt such a large leap in funding will help the company grow rapidly, and continue to bring in more users beyond the early adopter crowd.

2. Zipcar’s IPO. In mid-April, car sharing company Zipcar debuted on the Nasdaq at an eye-opening $30 per share, up over 60 percent from its offering price of $18. The company’s stock is trading around $25 at last close. Zipcar has been growing its business over the past decade, but decided this was the year investors would embrace the IPO. They were right.

3. New Innovative Startups Emerging. It seems like new websites using this type of business model are emerging on a regular basis. Baby clothing swap site thredUP launched in April 2010 and has been growing its business well ever since. Neighborgoods is another newish site organized around finding objects for rent via neighborhoods and locations, instead of around specific items. Toygaroo is like the Netflix for kids toys, where parents can rent toys for use, and then return them, and get new ones.

4. Neighbor-to-Neighbor Car Rental Competition. The idea for neighbor-to-neighbor car renting (car sharing 2.0) was such a hot concept there are now at least three companies angling to build the still tiny market. Getaround launched nationwide last week (and won an award from Tech Crunch ), RelayRides has been growing its site with funding from Google Ventures  and August Capital. And Spride Share, working with tech from City Car Share, launched in September 2010.

5. Attention Outside of Early Adopters. ThredUP has managed to attract a user base of people who tend to live their lives well outside the tech industry echo chamber, CEO James Reinhart explained to us recently. And that’s the main thing that Reinhart attributes to the success of the web site.

6. It’s the Economy, Stupid. One of the reasons these types of websites are becoming more popular is because the weak economy has led consumers to look to cut out buying and owning expensive goods — like a car, or a tool that they only use once. When times are tough, why not turn to the web to rent it? That’s definitely a mainstream consumer concept.

7. Winning Web Reputation Tools. Enabling an average user to feel comfortable renting out their car to someone in their neighborhood, or convincing someone that it’s a good idea to stay in an apartment owned by a stranger, is hinged on web-based reputation tools. These reputation tools have become better and better over the years, and pioneers like Yelp, Amazon and Netflix have made peer reviews an artform. Sites like Airbnb are able to tap into that established ecosystem and level of comfort.

8. Pundits-n-Books. Any time a trend starts to break into the mainstream, there’s always a wealth of books written on the topic to guide the way. Here are two: What’s Mine Is Yours: The Rise of Collaborative Consumption, and The Mesh.

9. Ashton Kutcher. Last week, celebrity Ashton Kutcher disclosed he had invested in Airbnb. It’s Ashton Kutcher. He helped make Twitter more mainstream. Just associating his name with Airbnb kicks it officially out of Silicon Valley.

10. Car Sharing Is the Gateway. Car-sharing is the gateway drug of the growing trend, and according to a report from research firm Latitude called The Sharing Economy, people who try out car-sharing services are more likely to join in other web-based sharing services. Car sharers also share significantly more across categories than non-car sharers.

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• Flash analysis: Collaborative consumption – a first look at the new web-sharing economy
• How to leverage the web-sharing economy now
• Opportunities and risks in the share economy

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• The economics of peer-to-peer car sharing
• Mobile apps: the next gateway to greater efficiency
• Opportunities and risks in the share economy

Right now, car sharing services like those from Zipcar and City Car Share tend to offer members the ability to rent cars in 15 minute integrals, and cars are parked around urban areas, can be unlocked using a key fob, and can be reserved on the web or a cell phone. In addition, car sharing services often include fuel in the service fee. In contrast, more traditional car rental businesses tend to rent cars through actual stores, mostly rent cars only during business hours, and most of the time, fuel isn’t included in the price.

Stubblefield told me he sees car sharing as an extension of what Enterprise is already doing: offering cars as a service to people who want them. But Enterprise has also been exploring the car sharing market with its own branded car sharing service WeCar, which it has launched in select locations including in Mountain View, Calif.; Nashville, Tenn.; and universities like Washington University, University of Missouri, and Tulane University.

However, Enterprise wouldn’t tell me how many cars were being shared in its WeCar service or how much money the division was making. That would lead me to guess that it’s a pretty small number in terms of both cars and revenues.

Overall, car sharing is still a tiny market compared to the car rental market. Stubblefield said out of the 1.6 million cars that make up the car rental market in the U.S., automated car sharing makes up around “one-half of one percent.” Enterprise itself has 850,689 cars in its rental fleet, while Zipcar had 8,541 cars in its fleet as of September 2010.

The economics of car sharing haven’t yet proven to be profitable, even for leader Zipcar. For the year ended December 31, 2010, Zipcar generated revenue of $186.10 million, with a net loss of $14.12 million. As of December 31, 2010, Zipcar had an accumulated deficit of $65.4 million, and in the company’s risk factors in its S1, it says, “We expect to incur a net loss in 2011. We do not know if our business operations will become profitable or if we will continue to incur net losses in 2012 and beyond.”

There’s the concept of car sharing and then the economic viability of car sharing, Stubblefield said:

There’s a whole litany of things that are associated with a vehicle that have to be played out from an economic viability point of view. There’s an asset that is fairly expensive that has to be paid for and utilized in a certain way. Is there an economic model that will sustain this [car sharing]? Or will it be a niche business that is in certain areas or for a non-profit?

It’s still too early to tell, said Stubblefield. In particular, car sharing based around having the company cover the cost of fuel is difficult, because the price of fuel has gone dramatic up in recent months, Stubblefield pointed out.

Another issue is whether or not the Zipcar model will work in many more cities. An investor who shorted the stock told Barrons in an article this weekend: “I think they’re going to rapidly run out of cities where this works.”

What’s more clear is that the rental car business is changing to become more automated and more distributed. Enterprise says its weekend local car rental business in cities like San Francisco — where a sizable portion of the population don’t own cars — is a very important business for them, and Enterprise is also incorporating more automated services.

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• Cleantech third-quarter 2012
• Ups and downs for cleantech in Q1
• Mobile apps: the next gateway to greater efficiency