Peer-to-peer car sharing

[Sunnycyclist]

My parents recently gave me their old car. I bike to work everyday, so it's mostly sitting in the driveway between monthly Costco runs. In Portland, OR, there's a peer-to-peer car sharing company that facilitates renting out your car when you're not using it. I rented from them a few times before I owned this car and had great experiences. The company, GetAround, covers insurance for the rentals and checks driving records before people can join. Newer cars can even be unlocked/locked during the rental period through their smartphone app (but my car is not new enough for that).

I'm wondering if I should list my car and potentially get some money back for the time it would otherwise by sitting around. At this time I'm not considering selling the car. The insurance cost, $60, is only slightly more than I paid for 3 rentals per month before, and my parents really like having given me a car (in their minds = safety/security).

Pros:
I could get $4/hr or $17/day gross income

Cons:
Not sure of demand for my car (older, but good shape. Also most cars listed in my area are manuals, so my automatic may have more demand)
Increased wear & tear
Renters can neglect to replace gas they used
Key hand over: in person? use a lock box and change the code for each rental?

[CDP45]

Car insurance doesn't cover this and you would be liable for any damages caused by the renters  -don't do it. Their insurance policy probably has just $1,000,000 in limits to cover ALL the cars. If you don't need it just sell it. Omg it's worse than I thought "We provide limits equal to those maintained by the car owner in their personal auto insurance." Have any idea what a couple nights in the ICU due to an accident cost? Way more than whatever limits you're paying for now which you will be personally responsible for (read garnishments, asset forfeiture.)

http://www.getaround.com/insurance

[nawhite]

Logging in requires connecting with facebook where Getaround will look at

Getaround will receive the following info: your public profile, friend list, email address, birthday, work history, education history, current city, photos and likes.

In what possible world do they need my photos and my likes?!?!?! They also shouldn't need me friend list or work/education history but I can theoretically believe they use it to save on their insurance. Still WTF?!?! Privacy please.

[Mega]

This is a great program, if you are the renter.

Do you get paid by the mile on your car?
Doesn't sound like it.
$4 / hour is about 8 miles of driving, maybe 12 if they pay for the gas.

It is a good try, but if you want exposure to the car rental market buy shares of Avis Budget Group.

[galaxie]

I share my car on RelayRides (they compete with GetAround, I guess).  I'm pretty satisfied that the insurance they provide is adequate.  Here's the insurance policy that applies:

http://relayrides.zendesk.com/entries/21153718-i-d-like-a-wordier-more-specific-more-complicated-explanation-that-uses-insurance-terminology

I've been sharing my car for just under a month because I've switched to taking the bus to work.  It makes me about $25/day when people rent it, and it's in pretty good demand because I live in a reasonably dense neighborhood near a college.  Everyone has been clean and conscientious so far.

Renters are responsible for filling up the gas "to the level it was at when they rented the car" -- to make this easy, I make sure the car is full before people pick it up.  RelayRides has a policy that protects me if people drive my car and then don't replace the gas: http://support.relayrides.com/entries/21827652-How-does-gas-work-

[nawhite]

The relay rides policy seems like a much better one for the owner than the GetAround policy. $1,000,000 of liability regardless of what you keep on it. But then there is the 40% fee that they take.

So your $4/hour gross becomes $2.40/hour. Assuming they cover the gas you're still looking at around 10 cents/mile for upkeep costs (tires, oil, wipers, other) so if they average more than 24 miles / hour for the trip you have made no money!

And that is assuming you're calling insurance a sunk cost (it isn't because the number of miles driven is higher than if you didn't rent it out) and you have no depreciation. Then you also have the hassle of renting it out and dealing with key handover.

Plus there is the added cost for the hassle a major insurance claim would be times the probability of it happening. Even if you only have a 1/10,000 chance of a renter making you fill out a claim, if you expect the cost to you (your time and deductible) being $1000 then you should add 10 cents to your expected cost to rent it.

So it may increase your short term cashflow, but it would be difficult for it to be economically sustainable long term.

[galaxie]

The relay rides policy seems like a much better one for the owner than the GetAround policy. $1,000,000 of liability regardless of what you keep on it. But then there is the 40% fee that they take.

Actually, RelayRides' cut of the rental cost is 25%.  Or are you talking about GetAround? 

[dragoncar]

The relay rides policy seems like a much better one for the owner than the GetAround policy. $1,000,000 of liability regardless of what you keep on it. But then there is the 40% fee that they take.

So your $4/hour gross becomes $2.40/hour. Assuming they cover the gas you're still looking at around 10 cents/mile for upkeep costs (tires, oil, wipers, other) so if they average more than 24 miles / hour for the trip you have made no money!

And that is assuming you're calling insurance a sunk cost (it isn't because the number of miles driven is higher than if you didn't rent it out) and you have no depreciation. Then you also have the hassle of renting it out and dealing with key handover.

Plus there is the added cost for the hassle a major insurance claim would be times the probability of it happening. Even if you only have a 1/10,000 chance of a renter making you fill out a claim, if you expect the cost to you (your time and deductible) being $1000 then you should add 10 cents to your expected cost to rent it.

So it may increase your short term cashflow, but it would be difficult for it to be economically sustainable long term.

Yeah I have a mostly unused car but just can't justify this.  Even if the renters are perfectly clean, they are probably harder on the car than an owner - fast starts and stops, etc.  it's the hidden damage that I really worry about as my car is known to have a vulnerable transmission.  Then there's the street parking and accompanying dings and dents.  Will they be more likely to park it in a high crime area?

For the people who do this, how much do you make per year?  Is it ok to limit trunk access?

[galaxie]

Yeah I have a mostly unused car but just can't justify this.  Even if the renters are perfectly clean, they are probably harder on the car than an owner - fast starts and stops, etc.  it's the hidden damage that I really worry about as my car is known to have a vulnerable transmission.  Then there's the street parking and accompanying dings and dents.  Will they be more likely to park it in a high crime area?

For the people who do this, how much do you make per year?  Is it ok to limit trunk access?

Car sharing programs like this usually operate in cities, so I don't think people are parking my car on the street any more often than I myself would be parking it on the street.  I live in a city; sometimes I park on the street.  It's normal.  Cars are made to be driven; it is also normal for people to stop and start them. 

People are paying you for the use of your car, and presumably some part of that payment would cover normal wear and tear on it.  I can't imagine that someone could drive my car so hard that it causes $6/hour (my net earnings) of damage without being detectable to me (because if I were aware of it I could then make a claim to RR).  My rationale for signing the car up is that owning a car costs money even if I don't drive it, so I'd rather get some money back than just continue throwing money into a hole in the driveway.

Usually people seem to borrow the car to (a) get out of town for the day/weekend, or (b) run errands where they'd have to carry stuff.  I don't know how you would limit trunk access, since they have your car keys, but also I think no one would rent your car if they couldn't use the trunk.

I don't know how much I make per year yet.  So far I've been making about $25 per week, but I have a couple of multi-day rentals scheduled soon that will bump the average up.

[nawhite]

My rationale for signing the car up is that owning a car costs money even if I don't drive it, so I'd rather get some money back than just continue throwing money into a hole in the driveway.

How much money does it really cost to sit in your driveway? I have 2 cars that my wife and I don't really drive much (usually less than 2x/week each most trips in the 30-50 mile range). One is a crazy efficient honda civic and one is a car we use to carry kayaks around on weekends. We thought about going down to 1 but ran the math and we pay $279 every 6 months for 2 drivers and 2 cars. So keeping one extra car costs us about $23 per month. And we're in one of those pay as you drive programs (progressive snapshot) which is going to lower our cost another ~20% starting in a couple months.

While the cars sit in the driveway the only cost is the insurance. I'm confused why this is the most efficient use of your time for increasing your savings rate?

[galaxie]

I'm confused why this is the most efficient use of your time for increasing your savings rate?

Look, if you don't want to share your car, don't share your car. 

It doesn't take much of my time to share my car, not counting the time I spend talking to skeptics on the internet.  It's generally been a good experience for me.  Although my observation period isn't very long yet, it seems to be true that riding the bus + putting the car on RelayRides is cheaper than driving to work, and I still get to have a car sometimes when I want to drive one.  YM(literally)MV.  I'm increasing my savings rate in a variety of ways, but on this thread the OP asked about car sharing, which I have direct experience with (and no one else who has responded does).

[Mega]

As a consultant, I have to track every kilometer I drive, and every cent I spend on my car (2002 Ford Taurus). I have found my cost per kilometer (Canada) is around $0.30 of which about $0.10 is for gas. The remainder is maintenance and insurance. Insurance is around $.04 per km. ( These are roughish numbers from a couple years ago. It may have been $0.35 per km)

Therefore, my maintenance cost is around $0.14 per km. Based on the stated $4 per hour, if the renter drives more than 29 km, I am losing money.

The average driving speed in New York City is 17.6 mph (28 km per hour). Therefore my expected net income for renting in NYC would be $0.14 per hour. Hardly worth the risk.

Numbers above DO NOT include depreciation (car was inherited). You are burning money if you rent out a newish car.

I can provide original numbers (total km, total expenses) if so desired.

[Posthumane]

Therefore, my maintenance cost is around $0.14 per km. Based on the stated $4 per hour, if the renter drives more than 29 km, I am losing money.

The average driving speed in New York City is 17.6 mph (28 km per hour). Therefore my expected net income for renting in NYC would be $0.14 per hour. Hardly worth the risk.

While I believe that your numbers for maintenance cost / km and average driving speed are accurate, I would think that most people who rent a car for an hour or two don't spend the entire time driving. After all, people rent a car to do something which they are unable to do without a car. That might mean they drive to the store, shop for a while, drive to their house, unload their shopping, then drive back to return the car. Or it might be something like driving to an attraction outside the city, or to go hiking. You would be charging them the rental price for the time that the car is out of your driveway, not only for the time that the car is in motion.

[galliver]

Therefore, my maintenance cost is around $0.14 per km. Based on the stated $4 per hour, if the renter drives more than 29 km, I am losing money.

The average driving speed in New York City is 17.6 mph (28 km per hour). Therefore my expected net income for renting in NYC would be $0.14 per hour. Hardly worth the risk.

While I believe that your numbers for maintenance cost / km and average driving speed are accurate, I would think that most people who rent a car for an hour or two don't spend the entire time driving. After all, people rent a car to do something which they are unable to do without a car. That might mean they drive to the store, shop for a while, drive to their house, unload their shopping, then drive back to return the car. Or it might be something like driving to an attraction outside the city, or to go hiking. You would be charging them the rental price for the time that the car is out of your driveway, not only for the time that the car is in motion.

I couldn't immediately find this info on the website, but I expect the renters pay for their whole reservation, not just the time spent? And there are incentives against being late (like late fees)? So if they don't want to cut it too close on short trips, they probably overpay a little bit.

I've never done the peer-to-peer carsharing, but I'm a Zipcar member, and I know that's how you have to plan.

[galaxie]

Therefore, my maintenance cost is around $0.14 per km. Based on the stated $4 per hour, if the renter drives more than 29 km, I am losing money.

The average driving speed in New York City is 17.6 mph (28 km per hour). Therefore my expected net income for renting in NYC would be $0.14 per hour. Hardly worth the risk.

While I believe that your numbers for maintenance cost / km and average driving speed are accurate, I would think that most people who rent a car for an hour or two don't spend the entire time driving. After all, people rent a car to do something which they are unable to do without a car. That might mean they drive to the store, shop for a while, drive to their house, unload their shopping, then drive back to return the car. Or it might be something like driving to an attraction outside the city, or to go hiking. You would be charging them the rental price for the time that the car is out of your driveway, not only for the time that the car is in motion.

Right.  One also doesn't usually pay for insurance per mile (or km), so it's strange that Mega chose to include it that way.  My insurance is [some amount] per unit time whether I'm driving the car or not.  (I would have to go look it up.)

[nawhite]

Right.  One also doesn't usually pay for insurance per mile (or km), so it's strange that Mega chose to include it that way.  My insurance is [some amount] per unit time whether I'm driving the car or not.  (I would have to go look it up.)

My insurance is per month however they give HUGE discounts if you can list "pleasure" usage and self report a small number of miles driven per year. When I moved to where I could take transit to work, my insurance fell 40% simply from changing my car as a "pleasure" vehicle instead of "personal" vehicle and dropping my miles driven from 10,000/year to 4000/year. Some companies will give you even greater discounts when you let them track your driving patterns for 6 months.

So it is still paid per month, but it does get cheaper with some companies if you drive less.

[Mega]

The insurance is per mile as the insurance rate is partially dependent on miles driven. I include it in the per mile value as I want to know, in total, how much it costs to drive my car per mile. Then I can say that 20 mile trip to the fancy pants mall to buy a 5 dollar item actually cost $11. This is useful when comparing public transit to just driving.

Most of my miles are highway miles. Vehicles driven in the city with numerous start/stops have higher maintenance demands. Early 2000 Taurus's were designed as fleet cars, and as such identify when maintenance is required based on driving conditons. For example, I can go 8000 miles before changing the oil. A taxi Taurus can only go something like 4000 miles.

Either way, I would not be willing to lend out my car for less than the Zip Car / Budget / Hertz rate adjusted to accomodate whatever the level of vehicle depreciation is applicable. There is a reason for the high rental rates on cars.

[Sunnycyclist]

OP here:
Thanks for giving me a lot of different angles to consider. A point of clarification: the $4/hour rental income I mentioned was after the 40% GetAround commission and depreciation. Owners set their own prices when listing a car, so that figure is based on what I think people in my neighborhood would be willing to pay.


The risk of damage to my car is one I'm completely comfortable with. My car, while clean and well-maintained, is not worth much. The risk of a driver injuring him/her self or others while in my car... that's scary. I'm still mulling this over.


As a pretty regular car share renter over the last 8 years, I know there are a bunch of ways drivers are encouraged to treat the cars well. Traditional rental cars definitely get thrashed and trashed--until recently I was a data analyst in the car industry so I know the depreciation curve for rentals well--but urban car sharing programs try hard to prevent that kind of behavior. A couple of methods I've seen used: rating/reviews of drivers and owners, fees for leaving a car dirty, reminders that if you're late taking a car back there's anther person waiting for it.

[capital]

The wife of a classmate of mine rented her car out on RelayRides, and a renter had a fatal accident in the car that injured four other people, with liabilities likely exceeding the $1M insurance RelayRides provides:
http://www.nytimes.com/2012/04/14/your-money/relayrides-accident-raises-questions-on-liabilities-of-car-sharing.html?pagewanted=all

There's nothing public about the outcome, but the legal system can be a slow-moving machine. So far as I know, they have not been bankrupted by the case.

I think people are a lot more willing to thrash a rental car owned by a giant corporation than one owned by a neighbor. There's no "sticking it to the man" to it.

[electriceagle]

I've had friends who have done peer to peer car sharing. As things are now, I see three problems with it.

1) Gas
You could lose money on gas, even if people are required to fill it before returning.

Fuel gauges are designed to be non-linear. It takes longer to move the needle off "F" than off the halfway mark, and longer to use the last "quarter tank" than the second "quarter tank." The upshot of this is that, for some cars, a person could return the vehicle a gallon short and still have the needle on "F". A gallon is $4 or so, so you can easily leak money (esp. after taxes)

2) Insurance
A one million dollar liability policy is enough for most non-crazy drivers. The problem is that you don't know when you'll get a crazy one who might injure multiple people and leave a bill higher than the liability limit. Additional insurance should be cheap, but nobody will offer it because this is such a nonstandard arrangement.

3) Crime
Our laws make it illegal to posess lots of substances and items. It's only a matter of time until someone decides to store some of these items or substances in hidden places that the car owner doesn't know about. There is no insurance coverage to pay for a criminal defense attorney.

[Mega]

I've had friends who have done peer to peer car sharing. As things are now, I see three problems with it.

1) Gas
You could lose money on gas, even if people are required to fill it before returning.

Fuel gauges are designed to be non-linear. It takes longer to move the needle off "F" than off the halfway mark, and longer to use the last "quarter tank" than the second "quarter tank." The upshot of this is that, for some cars, a person could return the vehicle a gallon short and still have the needle on "F". A gallon is $4 or so, so you can easily leak money (esp. after taxes)

2) Insurance
A one million dollar liability policy is enough for most non-crazy drivers. The problem is that you don't know when you'll get a crazy one who might injure multiple people and leave a bill higher than the liability limit. Additional insurance should be cheap, but nobody will offer it because this is such a nonstandard arrangement.

3) Crime
Our laws make it illegal to posess lots of substances and items. It's only a matter of time until someone decides to store some of these items or substances in hidden places that the car owner doesn't know about. There is no insurance coverage to pay for a criminal defense attorney.

I hadn't even thought of number 3. I know in some states the government can confiscate your property if it was used in a crime, even if you were not involved in the crime (e.g. Grow op). It would definitely suck to have that happen.

[Inaya]

Sorry to necropost, but I didn't want to make a whole new topic when this one is exactly what I wanted to ask about.

Any of the original posters willing to provide updates to their experiences with RelayRide (now Turo), GetAround, or any other direct P2P car sharing programs? Anyone else have any experience?

We're looking into the possibility of car buying and would love to offset some of the costs of owning a car in the city, and this seems like a very good method to do so.