

Getaround Wins TechCrunch Disrupt - ssclafani
http://techcrunch.com/2011/05/25/and-the-winner-of-techcrunch-disrupt-nyc-is-getaround/

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dotBen
This is one of those ideas which wins hearts at a conference like TC but I
don't get in terms of practicality. Aside from the issues already stated,
let's consider:

Keeping the key in the car (if you want to use their preferred auto-key-box-
thingy) - I can't believe that wouldn't adversely effect or void my insurance.
Certainly the part where I get a discount for an immobilizer is going to be
negated (because the immobilizer is in the key, now in the car). And parking a
car in SoMa with the ignition in it seems totally dumb - insured or otherwise.

It may come with insurance but that still doesn't cover someone driving the
shit out of the breaks, clutch, drive train etc. How do you account for fuel -
you can't say bring it back with a full tank because you may not keep a full
tank in there. How do you account for the extra miles the car is run for with
your own insurance?

How much are car owners _really_ going to make a month after they have taken
their cut? If you own a decent car, is $100/month really pushing the needle
and making it worth your while?

I still wonder about the premis - how many people REALLY want to share their
car with others. I won't let me best friend drive my car (or anyone else for
that matter).

Finally, from the renters side, I'm not clear what benefit this has over
ZipCars. I don't pay an annual membership with ZipCar, they're ~$6/hr, fuel is
included (which it isn't here), they have distribution and choice of car,
they're a known quantity, etc etc. Sure renting a Tesla or Porche is nice but
again, I wonder why someone who can afford such a vehicle wants to rent it out
to others and expose themselves to all the risk.

~~~
jdunck
Owners will charge what they are comfortable to cover all these prospective
costs. It is a market.

The main benefit from a borrower's point of view is that Getaround is both
cheaper and more convenient than conventional rental. In fact, an owner could
still charge more per hour, given that many rental needs are fractions of
days.

It may turn out that owner's acceptable fee is high enough that it does not
compare well with conventional rental, but from a pure market perspective,
this seems unlikely -- rental companies all these costs you point out, plus
the cost of idle inventory. An owner has already accepted the bargain of their
idle inventory, and only sees upside in rental against the existing costs.
Note that Zipcar also bears this idle-inventory cost on their fleet. Getaround
has an advantage in harnessing idling capacity at no cost to themselves.

It may also turn out that the cost of acquiring users (both owners and
borrowers) exceeds revenue per user, and so is not a feasible business. I
think this is a real risk, considering the markup of 40%. I rented from
Getaround in their earlier phase; it was an excellent deal, far better than
ZipCar. The cars were closer (read, more distributed than zipcars) and
cheaper. I think the 40% margin might move them into the range of more
directly competing with common rental rates though. We'll see.

It's hardly crazy, though.

~~~
dotBen
_Owners will charge what they are comfortable to cover all these prospective
costs. It is a market._

Too many unknowns to calculate a risk premium - a burned out clutch might cost
me $1000 to replace. What about the time the car is out of action because it
is in the shop getting said work done? I could pull out my spreadsheet and
begin to work some figures using pivot table, but this is about saving money
not practicing for an MBA.

 _The main benefit from a borrower's point of view is that Getaround is both
cheaper and more convenient than conventional rental._

Sure but the main competitor here in ZipCar (and its rivals) not rentals. If I
want to rent by the hour I'm going to ZipCar, not Alamo.

 _An owner has already accepted the bargain of their idle inventory, and only
sees upside in rental against the existing costs._

Not entirely true on existing costs - there are existing costs plus potential
new costs directly associated with the rental element -- see above. The upside
is the what's left of both of those costs.

 _The cars were closer (read, more distributed than zipcars) and cheaper._

I'm in SF, where their beta roll out is, and ZipCar is absolutely plastered
across the city. I can't see how Getaround has greater distribution than a ~10
year incumbent. I'm not also not seeing as being cheaper, esp if you compare
like-for-like models and factor in ZipCar includes fuel.

If I charge $7/hr, and Getaround take 40%, I make $4.20/hr. To make $100, I
gotta have the car utilized for 24/hrs a month - just under 1hr a day. I think
that's a tough threshold (given I need to use the car too). I'm not even sure
whether $100 makes it interesting for an owner either.

Getaround is probably going to W2 me on that, so I'll have to pay tax on it,
so I'll be lucky to end up with $70.

~~~
jdunck
" Too many unknowns to calculate a risk premium - a burned out clutch might
cost me $1000 to replace. What about the time the car is out of action? I
could pull out my spreadsheet and begin to work some figures using pivot
table, but this is about saving money not practicing for an MBA. "

Hmm, I guess I'm saying, charge $100/hr if you like. It's up to the owner. And
it's not about saving money for a car owner, it's about _making_ money. It's
only about saving to the borrower.

" Sure but the main competitor here in ZipCar (and its rivals) not rentals. If
I want to rent by the hour I'm going to ZipCar, not Alamo. "

At this point, I disagree -- rental is way larger than zipcar. And I think the
Getaround approach is more scalable, so that when conventional rental is dead,
Getaround will have a large lead, and distribution, over Zipcar.

" I'm in SF, where their beta roll out is, and ZipCar is absolutely plastered
across the city. I can't see how Getaround has greater distribution than a ~10
year incumbent. I'm not also not seeing as being cheaper, esp if you compare
like-for-like models and factor in ZipCar includes fuel. "

That's where I rented, too. Not sure what to say here, we're both anecdotes, I
guess.

" If I charge $7/hr "

Are you saying that because you're fixing on what Zipcar charges? Most of the
world hasn't heard of Zipcar. They've heard of car rental.

------
minalecs
Anyone know how it would effect my own insurance knowing that random people
will be driving my car on top of the extra mileage? Also what about extra
maintenance involved with renting out my car, are there any incentives from
Getaround concerning this ? Another concern would be that, yes in general
people that rent cars may not be as responsible with their rental as their own
car.

~~~
joeguilmette
Getaround comes with insurance, so while being rented your own insurance is
unaffected! As far as maintenance costs, you set your car's own price per
hour, so you can decide how much your extra maintenance costs will be.

~~~
TheSkeptic
Insurance is a red herring IMHO.

* Have you ever dealt with a major insurance claim? Even if you were renting out your car for $100/hour, that won't compensate for the headache you will be in for when your renter rear ends a brand new Mercedes-Benz and sends the passengers to the hospital.

* Think beyond insurance. What are you going to do when you receive a parking ticket or red light camera violation in the mail that a renter was responsible for? In the case of the parking ticket, you're on the hook no matter what.

* Even worse, if your renter is involved in an accident that's reported to Carfax, the resale/trade-in value of your car could plummet.

* There are no incentives great enough to compensate for all of the possible extra maintenance and repairs you may have to deal with. Depending on the make and model of your car, even a small ding or scratch could cost hundreds if not thousands of dollars to repair.

~~~
kjksf
Those are all valid issues.

Consider, however, that every time you rent your room on AirBnB you open up
yourself to as many problems (what if they steal from you; what if they damage
your room; what if they cause a fire) and yet that hasn't stopped AirBnB from
being a smashing success.

There's little point in opinionating on their chances of success. So far the
signup rates seem to be fantastic and whether they're successful or not will
become evident with time. We just have to wait a little.

------
compnerd
How would they prevent a group of car thieves from using prepaid Master or
Visa cards with fake names? Couldn't a thief just book a rental car for an
hour, find the location, unlock the car with the iphone app, then take off
with the car because the key will be inside? Let me know if I am missing
something?

~~~
jacobian
Right now it looks like they're requiring Facebook accounts to rent cars, and
so they can (presumably) use the Facebook social graph as a rough proxy for
trustability. Personally I sorta hate that policy (I've not got a Facebook
account...) but it's a fairly good idea, I think.

And, of course many, many said similar things about AirBnB -- "couldn't a
thief just book a room for the night and then make off with the TV?" -- and
that's proven not to be much of an issue in practice.

~~~
compnerd
Doesn't AirBnB require the host to be present during check-in and key
exchanges? I assume a person would be more tempted to steal something if the
owner never sees them in person.

------
rvanniekerk
What about the issue of car thieves in general? From the sound of it, you are
required to keep your keys inside the vehicle. The founders basically said
"the keys will be in the ignition". Is there no locking component of any sort
included in the getaround kit?

Doesn't this essentially make the application a directory of easy-to-steal
cars for potential thieves?

