When the Car-Rental Fleet Is Parked in Your Driveway

Sharing your car with strangers might not appeal to everyone, but a slew of start-ups think enough people are comfortable with the idea that there is money to be made from it.
RelayRides Inc., Getaround, and several soon-to-launch companies let car owners make extra money by renting out their personal vehicles, which otherwise might sit idly for hours or days in a garage or on the street.
Shelby Clark said he founded RelayRides to "make it easier and easier to access a vehicle than to own a vehicle." His company has about 60 privately owned cars available to rent in the Bay Area for $5 to $12 an hour.

 Caterina Rindi earns extra income renting her Toyota Prius by the hour through RelayRides in San Francisco.

One reason for the flutter of car-sharing activity here is a California law that went into effect in January that allows private car owners to rent their vehicles without being liable for accidents or other things that might happen during a rental.
The Bay Area has another advantage for the start-ups: an educated car-sharing consumer thanks to City Carshare, a not-for-profit celebrating its 10th anniversary this year, and Zipcar Inc., the short-term car-rental service that recently went public. But unlike Zipcar and City Carshare, the newer companies rely on private cars, meaning they don't have to own a costly vehicle fleet.
Still, they face expenses. Both RelayRides and Getaround have a $1 million insurance policy for every car rental. Each also has invested in technology that allows a car to be accessed via a smart card (RelayRides) or mobile-phone app (Getaround). Getaround said its cost for technology is about $1,500 per car, while RelayRides declined to disclose its cost.
Some analysts say that despite the early enthusiasm, car-sharing companies will need a much larger market share to be successful long term. Fred Lowrance, an analyst with investment firm Avondale Partners, points out that even Zipcar has yet to make money.
With RelayRides, renters are charged a $50 late fee if they return the car late—return times are tracked by GPS, which registers when a car is back in its home neighborhood.
Before prospective borrowers can join, their driving records are checked.
Judy van Soldt said that after a "beta experience" on her first rental with RelayRides where the smart card didn't work, the experience has been smooth. So far, she has driven a Smart car, a hybrid vehicle and a Volvo that looked bad on the outside but was fine on the inside. "No funny smells," said Ms. van Soldt, a 47-year-old architect who lives in San Francisco's Noe Valley and doesn't own a car.
For car owners, the services are a way to put a depreciating asset to work. "We are enabling owners to become an autopreneur," said Jessica Scorpio, a co-founder of Getaround.
Caterina Rindi, whose black Toyota Prius was the first car in the RelayRides system, said she makes $200 to $300 a month renting it out two to three times a week at $7 per hour. (Of the RelayRides rental fee, 65% goes back to the owner.) That compares with the $7.75 an hour that Zipcar charges in the Bay Area, but its customers also pay a $25 application fee and a $60 annual fee.
Ms. Rindi, who runs a small food business, said the process hasn't been without kinks but is a believer in car sharing. She said the company has taken care of issues such as when a borrower left her car in a no-parking zone and it was towed, and when another renter smoked in the car (RelayRides kicked the borrower out of the service).
Source http://online.wsj.com