From carsharing to p2p car cost-sharing

Shareable magazine has an excellent article, explaining the RelayRides initiative:

Peer-to-peer car-sharing within closed networks (friends, family, neighborhoods) is already a successful reality with services like Divvycar. (Its parent, Divvy, is an integrated reservation and billing system for sharing any asset within a chosen community.)The notion of opening up one’s sharing network to just about anyone places car owners in a potentially precarious situation. Nevertheless, RelayRides has received positive response thus far—especially from car owners.

Kim Gaskins details the motivations of the founder:

“For all of the money-saving, hassle-free perks that Zipcar offered, accessibility was still an issue.

“As I was biking nearly two miles through snow and sleet to get to my Zipcar,” he recalls, “I passed hundreds of cars on the road that had clearly not been driven for weeks, and that was when the light bulb went on. I thought: ‘Wait a minute! I should be taking one of those cars!’”

Clark began planning just after that incident—researching insurance and technologies, and surveying the marketplace to see if there were other people who want and need to their share cars—and would be open to doing so with complete strangers.

In April 2009, Clark founded RelayRides, the first person-to-person car-sharing service, which will be launching soon in Baltimore. Unlike fleet-based services—Zipcar, City CarShare, I-GO, and others—which maintain their own vehicles, RelayRides relies on individual car owners to supply the vehicles that other members will rent.

Clark estimates that car owners will be able to make between $2,000-$8,000 per year, depending on the desirability of the vehicle and how often it’s made available for other members to use. (RelayRides’ cut is 15% of the rental fee.) Essentially, car owners will be able to monetize an asset that simply sits around for all but a couple hours out of everyday. It may also help take more individual cars off the road, one of the most important ways to address global warming.

“After 8 years, car-sharing has only achieved roughly 10,000 vehicles and fewer than half a million members; that’s really not very many,” says Sunil Paul, an investor and entrepreneur with Spring Ventures. “In order to make this a much more scalable, ubiquitous phenomenon across the United States, there has to be a better solution than what’s being pursued today—and we believe that car cost-sharing is a big piece of that solution.”

Some details about their approach to trust:

“RelayRides has adopted a number of measures to facilitate trust between strangers. In addition to screening the driving records of all potential renters, the company will implement a two-way review system (much like eBay); car owners will be able to review renters, and renters will be able to rate cars they’ve driven. RelayRides will allow car owners to screen out drivers that don’t meet their rating criteria (much like Prosper). The hope is to reward both respectful treatment of others’ property and quality upkeep of vehicles by their owners.”

So why are peer-to-peer car-sharing services emerging now?

Part of the answer might lie in the way online and offline services like Zipcar, Prosper, Netflix, and are training us to share our stuff—people are simply getting used to the idea. “‘Zip’ has become a verb to the point that we could ‘zip’ anything—they just happened to start it with cars. Close on their heels was Avelle (formerly Bag, Borrow Or Steal) and now SmartBike for bikes on demand. The next step seems to be a crowd-sourced version of Zipcar,” says Freed.

Another part of the answer might be found in our response to the ecological and economic crises Americans are facing. As Clark explains, “You just think of the number of cars on the road, and the resource that we have in our own communities is so massive… what the peer-to-peer model does is it really allows us to leverage that instead of starting from scratch and building our own fleet.”

From an individual’s perspective, peer-to-peer sharing is a means for owners to monetize their assets during times when they don’t require access to them. But peer-to-peer models can also be understood to utilize existing resources more efficiently—ultimately, to reduce the number of cars on the road—through shifted mentalities about ownership, the intelligent organization of information and, increasingly, through real-time technologies.

Since peer-based car-sharing companies don’t bear the overhead costs of owning and maintaining their own fleets, they don’t require the high utilization rates for vehicles that Zipcar and similar programs do—the result is comparatively fewer limitations for the size and scale of peer-to-peer operations.

For renters, this can mean a considerable difference in convenience and vehicle accessibility; for people like Clark, it can mean the difference between a miserable 2-mile trudge in snowy weather—or an easy stroll—to retrieve a rented car.

Person-to-person car-sharing may also be emerging because mobile technologies are making it more convenient, providing the ability to gauge user need, crowd-source available assets, and fulfill requests more flexibly and intelligently—by location and in real-time. The Taxi Magic iPhone app, for example, allows users to summon a cab with the push of a button. Applied to ride-sharing, this type of real-time mobile technology could have broad implications for when and how people opt to share. (How many people would rather share a ride than pay for a cab, provided both were readily available?)

Sunil Paul is exploring the convergence of technology and peer-to-peer car-sharing in his own endeavors, with an eye toward the urban future: “Because of what’s possible with smartphones and information technology within the car, as well as embedded new technology that’s going to be built into cities themselves—it’s really transforming transportation in a way that hasn’t happened since the automobile was created in the first place. We are taking advantage of new technologies—especially smartphone technologies—to deploy and create new forms of transportation, and make existing forms of transportation more convenient.

For many people, sharing is about reducing transactional burden—removing costs and unnecessary hassle by accessing just what they need, when and where they need it. As RelayRides and other peer-to-peer services begin to demonstrate material benefits for members of truly open and scalable systems, we can expect to see a new psychology—and allure—to sharing emerge. This has the potential to change how we mobilize, consume, socialize—ultimately, how we live and function together as a society”

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