Borrow My Car…Please

 

People have always shared cars: whether it’s through carpooling, loaning a friend the car for the day, or reluctantly handing over the keys to teenage drivers. But people never actually rented out their cars before, and with good reason… until now.

Since your car insurance only covers you in your car, you’re responsible for any damage done when someone else is driving it, right? Not any more (at least in a few states). Right behind California, Oregon has passed a law that will allow personal cars to be rented out. And, needless to say, there’s a competitive market of services that have sprung up to facilitate these personal car rentals, such as GetAround and RelayRides.

The idea is pretty simple: car owners register with the service, and get their cars kitted out with the necessary card reader, gas card, etc.. The owner gets a cut of each rental, and that can add up quickly: GetAround estimates that even if cars are only used an hour each day, that’s still $4.80 in the owner’s pocket, once a day, every day, adding up to over a thousand dollars a year. The driver, of course, is responsible for gas.

Everybody’s happy, except possibly your local car dealer.

But why does this even exist in the first place? Ideally, what these services would like to create is a sort of private transit network, where instead of everybody buying cars for themselves, a few people buy cars and charge low prices for others in the neighborhood to use them. In other words, instead of owning a car all the time, people only use them when they need them, at least in large cities.

If that sounds like Zipcar to you, you’re right. The key difference is that since these services don’t have to maintain a fleet, the cost is a little lower.

So when will this share-a-car service come to your town? Good question. As we said, the insurance laws need some revisions in other states before this is really feasible on a larger scale, and it may not suit most areas at all. Renting somebody’s car for an hour to do a grocery run makes sense if you live in a city and don’t own a car: less so if you live in the suburbs and have to drive everywhere anyway.

Also, there’s going to be some resistance to this trend for a simple reason: trust. Not everybody is comfortable letting a stranger tool around in their car, and not everybody is comfortable plopping down in someone else’s car and driving around. It’s easy to see this catching on in cities like Boston and Portland, but we’re having a little trouble seeing it being quite as popular in places with higher rates of car theft.

In the end, we’ll just have to see what happens with these services. RelayRides, despite backing from Google, is currently only available in Boston and San Francisco, while GetAround is still in beta. But we’re pretty sure, one way or the other, that person-to-person rentals will only become more popular. After all, we’ve got to pay for gas somehow.

If you need car insurance, check out SafeAuto.com

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