Wednesday, June 22, 2011

Personal Car Sharing

This came across my Google Reader today.

The article talks about changing insurance rules so that you can "rent" our your own car to others, via a 3rd party, and have that 3rd party take on the liability. This would open the door for businesses to start renting out people's cars for them.

I know that our local car sharing co-op, Modo, has been looking into this. But so far, the ICBC insurance regulations forbid it. California, and now Oregon, have amended their legislation to allow for this, and in California there are apparently startup companies trying to open up this market.

I guess I can see the attraction in this; there are, after all, many underutilized cars sitting in driveways throughout the country. But I am not very optimistic about the ease of getting people to sign up to renting out their cars to strangers.

People are very, very attached to their private cars. This is not surprising; cars are very expensive. If I spent several thousands on a vehicle, I'd be quite concerned about lending it out to others, especially those I don't know. I'd have concerns like:
  • what happens when it gets returned dirty? Who will clean it and when? As a one-time board member of Modo I can recall endless conversations around pet hair...
  • what happens if the renter dings the paint job, chips the window, or does other cosmetic damage? What's the deductible policy going to say?
  • what happens if the renter totals my car? Sure, the costs are covered by the 3rd party "car sharing club", but I get stuck with the inconvienience of suddenly not having a vehicle at all (as a reward for being eco-conscious and letting the car be rented!)
  • how do I know that these renters aren't going to be revving the engine, riding the brakes, or in other ways adding wear and tear that I, being a perfect driver, wouldn't be doing?
Then, there's the money to be made. Or rather, the lack of it. If I take the Car2Go rate (the highest priced car-share here in town) of $13/hour, then clearly there's not a ton of money to be made for the casual car-lender. You might get your car rented for 4-6 hours on the weekend, so the "car sharing club" might clear $100-$150. You'd get some cut of this, since presumably the "club" is going to have to cover its expenses. Is this going to attract a ton of people? Surely not folks who can already afford a nice vehicle...

And then there are the clients. If I'm paying $13/hour for a car,  I have some basic expectations of quality. I expect a newish car (5 years old, max), clean, preferably with hubcaps, and in excellent working order. At this price point, I'm not going to rent a clunker with 200,000 kms, a strange engine noise, and a window that doesn't roll down. The car would presumably have to have an automatic transmission. So the "club" would have some minimum requirements for entry as well.

This model might work in a large city, where there's a large enough pool of cars and owners that you might find some that fit the "Goldilocks" conditions; or in a small town, where everyone knows each other and so you're not letting a total stranger drive your car away, and there might be more tolerance for clunkers. I imagine that the concept might attract folks who have an "extra" car sitting in their driveway, that they don't need for commuting.

But in the end, I think this is a really tough business to start.

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