How to rent your car for fun and profit

Personal car sharing — my vehicle, yours for $8 an hour — is taking off in California and London. Most cars sit idle more than 90 percent of the time, so why not put them to work?

Wed, Jun 01 2011 at 4:18 PM EST

RADIO DISPATCHED: RelayRides uses smart wireless technology to hook riders up with rides. (Photo: RelayRides)

I love the idea of personal car-sharing, which has been legalized in California since January and now has three companies in the field signing up customers and cars. Since most cars sit idle more than 90 percent of the time, it’s an idea whose time has come. When one of the San Francisco-based companies, Getaround, announced its launch, more than 1,600 people signed up to have their cars shared on the first day.

The basic idea is pretty simple: Make your car, which is just sitting around anyway, work for you by going on cellphone app-enabled trips for customers of personal car-sharing services. The major advantage for operators over regular car-sharing models like Zipcar (which went public in April) or Daimler’s Car2Go is that there’s no need to own and maintain car fleets.

For consumers, personal car-sharing means a) finding a cheap alternative to car ownership; and b) making money from your most expensive asset. RelayRides, with backing from August Capital and Google Ventures, says that the average person can make $250 a month renting out their car.

The three companies list around 200 cars each, with rates that are about $45 a day for a small compact. By the hour, that typically means $5 to $8, but a Tesla Roadster from Getaround is $50 an hour, and a BMW Z4 $15.

The smart phone is key, because it enables not only the transaction but also getting the customer into the car. Getaround has an iPhone app and a “Carkit” that installs in the shared vehicle and combines GPS, Wi-Fi and keyless remote technology.

When I first heard about personal car-sharing, I thought that insurance was the big hang-up. What would happen if a car sharer crashed because the personal car she borrowed had bad brakes? And, indeed, it required changing California’s insurance laws to even allow this new form of car rental to happen. But Getaround now has signed up with industry giant Berkshire Hathaway, and RelayRides has a $1 million policy that covers both the car lender and the driver.

There’s going to be some major adjustment here, because this isn’t how we’re used to renting cars. Ali Fenn, a Bay Area resident who is lending out her big Jeep, told NPR’s Marketplace that she was “slightly awkward” for the first transaction. “The person was like, ‘How does this work? What do I do?’ I said, ‘I guess I just give you my keys and you drive away.’ It was very easy.”

The smartphone apps mean that the two parties don’t even need to meet in person. On video, RelayRides car sharer Angela tells how she makes a few extra bucks by sharing her '04 Porsche Cayenne:

The third San Francisco-area company involved in personal car-sharing, Spride Share, conducted a survey on this new phenomenon with the University of California at Berkeley. Trust is a barrier, with more than 50 percent of the dissenters saying they wouldn’t lend out their car because, “I don’t trust people.” But most people seem to be on board with the idea, and 70 percent in the survey say they’re not worried about the privacy concerns. The good news for the environment is that nearly 60 percent say that if they rented out their car, they’d take other modes of transportation (always an option in transit-friendly San Francisco).

“This approach can reduce greenhouse gas and the need for parking, and improve highway congestion by getting cars off the road,” said Sunil Paul, the venture capital investor behind Spride.

It makes sense that this gained traction in northern California, but it’s growing exponentially. RelayRides has a small pilot program in Boston, and WhipCar is operating in London — with 1,000 cars available to rent. "We never use our car, so now it pays for our holidays," says WhipCar user Maureen, 66. One of her customers was a 34-year-old IT guy, so maybe they bridged a generation gap.

Also on MNN:

New options for car sharing, like the one from BMW, make the concept more attractive
Sharing goes way beyond transportation: 10 ways to save money by sharing

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car hire 09/04/2011 10:15 AM

Are you really making a profit? Every time you put mileage on a car it decreases it's value. So it's not like you're getting something for nothing, you're just taking future money away from your Car Hire value

Owner 06/13/2011 09:34 AM

No way. Too much liability should someone get killed in a car accident by the car that belongs to you but driven by someone else. You would have to have a well crafted rental agreement. But even then some judge would allow you to be sued, probalby your mother for having you, your grandparents, etc... No to mention you could lose all of your assets due to litigation, even if you are found not guilty in the end.

BlueSgt 06/12/2011 16:33 PM

Lets do the math. $250 per month income (average person probably means average car) @ $8 per hour is 31 hours. 31 hours @ 50 mph is 1530 miles. 1530 times $0.51 per mile is $780.

You are renting your car less than 1/3 the rate the IRS and feds allow as normal.

Expressed another way $250 makes about a $10K car payment over 5 years. During which time it is driven 90,000 miles. Now add in tires, oil changes, maintenance...

Where is the profit? If something sounds too.... More

Peter 06/12/2011 15:03 PM

For just a few dollars I can borrow your car to go pick up some drugs in crack town, and if the police show up, I can have as fast a getaway ride as I need since I don't need to have money to buy a fast car anymore. I'm sure there are a LOT of restrictions on the insurance such as it becoming null and void the moment "criminal negligence" begins, but it is OK because criminals have lots of money, and when one crashes your Porsche into a school bus, they will easily be able to afford the damages.... More

lol 06/12/2011 16:23 PM

yes, if you car is used in any crime such as drug dealing, you ride will be confiscated in many towns & auctioned off. if towed, your auto will end up in the impound yard, paying mucho dinero to get it out.

MotherLodeBeth 06/12/2011 16:33 PM

RE:yes, if you car is used in any crime such as drug dealing, you ride will be confiscated in many towns & auctioned off. if towed, your auto will end up in the impound yard, paying mucho dinero to get it out'....

I wonder if that happens with rental cars like Enterprise etc.

Moovue 06/12/2011 14:52 PM

Why are all you so attached to your cars. Okay, well, don't rent the brand new Bimmer you got, of course, but maybe an older one thats well maintained but maybe already high mileaged.

As long as you have them agree that you will inspect the car during or after the rental to assure parts weren't taken or exchanged and that the tires are still in reasonable condition and nothing strange was done to it, etc.

Cars are not people, they are machines, stop being so emotionally.... More

the realist 06/12/2011 16:26 PM

hope you like teenagers doing donuts & burnouts, drag racing with your auto. or take your SUV offroad into the swamps with high water, huge rocks, & thick logs pounding your underside. what planet do you live on?

Brad 06/13/2011 11:25 AM

Sure, and teens doing burnouts and driving through swamps is the most likely scenario for people in San Fran who need a car to drive to Berkeley for the afternoon.

You need a new name, Realist. Try adding an "un".

joke 06/12/2011 10:25 AM

is this for real? would you rent out your porsche to a stranger? not even for $100 an hour, dude.

dumbidea 06/12/2011 10:16 AM

sure, let some whacko or teenager drive your car over dirt & rocks? you'll be paying for alignment & suspension damage later & you won't notice it now. how about your tires getting burnt out from hard driving or your brake pads hit hard? will you notice the damage now or later? and all this for $8 a hour?

Sarah 06/12/2011 00:55 AM

..if I could figure out the insurance.
I have an '02 truck that I bought used
would somebody like to use it moving, of course they would

joke 06/12/2011 10:27 AM

you must own a hyundai with 100K on it

Susan 06/12/2011 00:20 AM

No one drives my car. Only once did someone drive my car, AND I WAS IN THE PASSENGER SEAT. Never would I allow someone to use my car, particularly if they were some unknown person. People think it's only gas. I rarely give someone a ride since who pays the deductible if a deer decides to hit my car on that one errand? Same for a job - I use my car for my own commuting. To hell with an employer's other needs. He can provide the vehicle.

Common Sense 06/11/2011 23:22 PM

And yes, who the hell would rent out their sports car on these sites? I'll tell you right now, they will be abused to hell.

josh 06/11/2011 20:42 PM

I can so totally see this turning into the new trend for afternoon trysts. Don't want to pay for a motel for a quickie? Just spent $8 and you've got you're own personal motel on wheels and the best part: you don't even have to worry about cleaning up after yourself.

Joe 06/11/2011 14:55 PM

I have to question the premise that this will in any way decrease greenhouse gases. If anything, this arrangement will cause those who may otherwise choose to bike or ride shared transit to choose a car. Unless you're counting minuscule emissions from parked vehicles, more cars on the road = more greenhouse gases. I doubt those who already have a working vehicle will want to rent one (except for joyrides), so this is catering to those who otherwise would not be driving.

Westieluv 06/11/2011 10:03 AM

Each state has a different department of insurance which regulates the allowable policy language and exclusions in auto for hire situations. All auto policies are not alike. I would be very cautious in reading my policy language in detail before ever allowing someone else to use my car in a "For Hire" situation. California may have changed their laws to allow this, but it would be a long and arduous process to get the rest of the states to go in this direction. Tort law differences from.... More

goldenstate 06/10/2011 19:22 PM

Dumbest idea ever!!! I would never let someone else abuse my car - would not cover anywhere near the wear and tear and maintenance of my vehicle.. - is this like a pyramid scheme where only the top guy will make money?

Rob 06/10/2011 17:51 PM

I drive a 13 yold car with over 300,000 miles. I have only let 1 person ever drive it and that was because I had no choice. He drives his car like a rental.
I don't trust anybody but me driving.

James 06/10/2011 17:11 PM

I don't even like loaning my car to my best friends, I'd hate for it to get damaged. Everybody I know drives rental cars like they stole them, and informed used car buyers avoid previous rentals for that reason. I would not even think of renting out a car to a stranger unless it was low value and easily replaced. Who in their right mind would rent out an expensive sports car? Do you think it will be a 60 year old woman driving it to the grocery store on a Sunday?

Billy the Electrician 06/10/2011 16:18 PM

What if an owners car is ticketed for running a red light and it is the renter that is driving the car?

Praveen 06/10/2011 16:36 PM

Thats easy, since all the transactions and rental times can be tracked, and the red light violation time can be tracked as well, the app can also make sure who has rented the car when and assign any tickets to the renter during those times. The key is to have electronic trace on everything, and have this admissible by law and insurance companies. This can be further automated by assigning to the specific renter number at the specific time.

Not Buyin 06/11/2011 05:01 AM

That's easy? You must be joking.

BillyBob 06/10/2011 16:01 PM

I have a VW GTI and I know how fast it will go. I wouldn't want a stranger finding out on his/her own.

John C. 06/10/2011 14:08 PM

Enter your comments

Sandra 06/10/2011 13:15 PM

The article addresses the insurance situation for two of the companies; "Getaround now has signed up with industry giant Berkshire Hathaway, and RelayRides has a $1 million policy that covers both the car lender and the driver."

I'm sure the other companies have similar coverage for these arrangements.

Jon 06/10/2011 12:11 PM

I find it difficult to trust the mechanic when I leave my car for repairs at the local garage. When would I ever trust a complete stranger to drive around wherever they want in my car? Not to mention your insurance premiums could go through the roof based on how many miles are driven throughout the year.

Chris 06/02/2011 18:57 PM

I have been testing out and using the service from another San Francisco based company http://www.justshareit.com and they make it seamless to borrower and share. I even borrowed a boat and an ATV one time. I was able to borrow a car from one person, a boat from another person. Insurance was inclusive for all assets.

Guest 06/10/2011 13:22 PM

how would the insurance sotuation work? dosent anyone who drives your car have to be listed on your policy?

MotherLodeBeth 06/02/2011 17:23 PM

Not sure my insurance company would want someone else driving my care under my policy. You could end up with someone who wasnt a safe driver and then they have an accident or heaven forbid kill someone and YOU get sued and lose everything you have.