Who covers the cost (often quite high) of fixing/cleaning dings, dents, rips, missing/broken parts, broken headrests, dog hair, dirt (from plants?), gum, and other such things?
These are car maintenance issues I see all the time when using both Zipcar and CityCarShare. If I had a personal car, I'd flip if it was subjected to the level of abuse that these fleet cars are -- the depreciation due to wear and tear would be significant.
[Edit] Since I got downvoted to 0 (and have no idea why), I'll expand on the relevant answers I found in the FAQ:
What if my car is returned dirty?
Renters are required to be responsible and keep
the car as clean as possible. At the end of every
rental, you can rate the user and leave feedback.
If they return it in a dirty condition, you should
note this when leaving feedback.
... actually, that's the only FAQ item I can find on the subject. The cars are insured, but what's the deductible? Who pays it? Is the insurance company really going to pay out a claim for a broken headrest, a ripped seat, or a ruined floor mat?
As you point out from the faq, the onus seems to be on the owner and the only consequence for the dirtiness is the ability to rate the user. I think a more serious question relates to the adjudication process in the case of more serious violations such as scratches, damage or theft of items from the car. Do they automatically take the word of the owner - and what happens in the case of false claims against a renter by an owner - what appeal process does the renter have in that case?
I tend to agree; I'd not be at all keen to loan my car to some random stranger. I'm more attached to it than the average person, but there just seem to be too many things that could go wrong; what if they smoke in it? What if they drive it into something? What if they steal it? Maybe those things aren't likely, but they'd worry me too much. And yes, they're apparently insured, but the inconvenience of having your car off the road for a week or two goes far beyond just the cost of getting it fixed.
But if other people want to rent their cars this way, great. Sounds pretty good from the rentor's point of view. Also, the existing car rental companies could do with a damn good shake-up and if this gives it to them, so much the better. I guess I'm not in their target audience - I'm not anyway since I don't live in the States, but I'm interested to know if enough people are keen on something like this to make it work. My gut feeling has been 'no', but I wouldn't mind being proven wrong.
Every rental car I've ever had has had at least some of these faults. None are what I would be prepared to live with in one of my own cars.
But I'm probably atypical. I would never own a holiday apartment for rental either.
However, if it was structured right, you could get to the point where people purchase a car specifically for the intent of hiring it out for profit, in the same way that people do with yachts, holiday apartments and other high-value durables. Although I think you'd be better off with a private 'fleet' of several cars to spread the risk across several units of any one car being off the road at a time. I could see myself purchasing a vehicle specifically for rental. Maybe an insurance write-off that can be repaired and works OK but has very low market value because of the title history. Maybe a car that has an out-of-fashion color or cosmetic damage like hail damage that won't matter to the renting person, but makes the car pretty much worthless in the marketplace. I can think of 10's of strategies of purchasing a vehicle at below-market value and then putting it into a rental pool. If I didn't purchase the vehicle as a personal possession, but merely as an investment item, I think my attitude towards it would be different.
But, if it's profitable for me to buy a car for the purpose of renting it out, why shouldn't the startup cut me out and directly purchase cars to profitably rent out? And get economies of scale while they're at it? Maybe it's a way to bootstrap, but it seems like an unstable strategy, and that those purchasing cars to rent out are likely to find themselves on the receiving end of, ah, an uneconomical transaction.
A distributed model where other people contribute their money, and the business makes money as an agency is well established in other fields. I know of many holiday properties where each individual apartment is privately owned, but the building is managed by a single entity. The owners wear the depreciation costs and interest charges (if using borrowed money) but get to keep the majority of the revenue from rentals, and any capital appreciation from the property, or wear any losses from a drop in value.
In the same way, a startup can allow others to contribute the capital value, wear any depreciation, financing and insurance, and just take an agency fee. This is really not much different to other rental car companies who presumably lease all of the rental vehicles either off some central owner of the vehicles, or directly from the manufacturer. Or, perhaps they just have a large, revolving credit line which they use to purchase the vehicles. They certainly aren't going to own them, so it really comes down to a definition of title.
I think the blurring here is that most people see car ownership as a strictly private-use phenomonen, whereas in property or boats, mixed private/investment or pure investment is much more common.
The cases you come up with are, to my understanding, management being hired out by a collective, not the management creating the collective in the first place. You also talk about a lot of entities who can obtain advantages of scale by bundling a lot of cars together. I submit that despite the fact you think you are arguing against me, you're actually arguing for my point. This startup in the long haul is going to look more like the central owner of the vehicles from an economic point of view than a neutral aggregator. It's the one in the position to make the most of all those issues and I just do not see how it can possibly be more economically efficient for little bits of rental here and there in the long term. They'll be used to bootstrap, then bumped out of the way when it's finally economical. Though hopefully they'll make some sort of profit in the meantime.
Neither would I. Nor would I want to type "rental car" into Youtube if I ever decided to participate in this program.
It seems that Getaround might actually be preferable to traditional car rental methods because of the low friction associated with the transaction. Enterprise Rent-A-Car will pick you up, but you have to go back to the retail location to fill-out paperwork and drop off the kid who brought the car to you. It would be so much easier to just use a car already located in your building's parking garage.
I looked at the Getaround site and couldn't find any details about how the in-car gizmo works. This support thread has some clues:
I'm a bit bothered by the statement "without giving too much away..." Security through obscurity? I presume that the CarKit does not integrate with the vehicle ignition? If not, must a person who rents his vehicle leave an ignition key in the vehicle? If so, the iPhone app implicitly becomes a location tool for easy-to-steal vehicles. Just smash a window and start up the car. If the carkit does indeed replace the need for a physical key, I suppose the security concerns would be no worse than those associated with aftermarket remote starters. It is bothersome that Getaround is not more forthcoming about the technology.
Modern car security usually involves a coded key. The key is coded to an immobiliser computer, which is then coded to the main engine computer. Sometimes the key works by RFID. Without the correct combination of key/immobiliser/engine computer the car will never start. You can't just replace the key - it has to be ordered via the dealer and programmed to match the car - same goes for all the other computers. You can't just take out an engine computer from car A and put it into car B and expect it to work. Each is encrypted to only talk to it's matching set of key/receiver/immobiliser computer/engine computer - subsitute one out and nothing will work. The actual ignition lock is immaterial - and a lot of newer cars have done away with it altogether and just have a slot for the key and a start button instead.
So for someone like Zipcar etc, it wouldn't be economically feasible to try and develop new hardware for the car that adapted/circumvented the proprietary immobiliser security systems in modern cars. Much cheaper and easier to leave the original key in a locked box.
As for parting out- you're probably correct. Without an original set of keys, you're not going to get the car going again, because the only way to get a key is to apply to the factory for one. And they keep a list of stolen vehicles in the same way cellphone companies know which handsets have been stolen.
The flipside of all this - if you're purchasing a used car and only one key is available start asking questions why. If you go to the dealer to purchase a replacement key you might find out that the car has been blacklisted and no more keys are available. Cars that have been carjacked or stolen by stealing the owners bag with keys in it generally don't have the spare keys available.
The engine ignition security system is usually totally separate from the lock/unlock feature despite both functions being accessed from the same piece of hardware (ie the key/keyfob). So my guess is they've interfaced with the lock/unlock system but not the ignition system, which is why the key is still kept in the car for starting.
"The National Insurance Crime Bureau (NICB) reports that 2009 marked the nation's sixth consecutive year of declining vehicle thefts in the United States. U.S. motor vehicle thefts declined 17.1 percent from 2008 to 2009—the largest annual decline in decades."
Also "premium" cars from zipcar have pretty discreet branding - just some on the rear bumper, nothing on the doors.
The interesting stats are the thefts of older vehicles - which are way higher than new vehicles because of the crude anti-theft measures in 80's and 90's cars.
Also (and perhaps I shouldn't say this) I often see additional zipcards in the trunks of zipcars - by the spare tire - presumably for use by service personnel.
I assume the car is unlocked via a cellular uplink, rather than connecting as a local hotspot over wifi or bluetooth (since you can track the car online). What happens when it's in a garage with no signal?
Many newer cars have chips in the keys, tied to a system in the engine that prevents it from starting without the proper code. This means I have to leave a key in their box to start the car. If someone smashes the window, it's now much easier for them to steal my car.
I'd worry about wear-and-tear. Rental cars are rolled every couple years, you can buy cheap because they are often beaten.
Has anyone used any of these services?
Very cool idea and hope that the legitimate concerns are mollified.
I also wonder how many people would really be willing to rent their own car out. I would expect the people that need the money (more then care about strangers doing lord knows what with their car) probably have the crappiest cars to begin with.
Based on the screenshot in the tour, setting your price to $12/hour nets you $9.60/hour, so they charge a 20% commission. Not bad considering all the insurance and so on is taken care of.
To prevent rental abuse, it would be interesting if their car kit had an accelerometer, monitored RPM, etc. to detect when things are outside of the norm. There are some other potential issues I see with this. Their car kit appears to plug into the cigarette lighter -- what happens if someone breaks in and steals it? Also, those with integrated Bluetooth handsfree should not use their vehicle's address book functionality or they expose that to any renters. What if someone returns your vehicle but parks it in a spot that, the next morning, becomes a "no stopping during rush hour" zone?
It'd be interesting if this becomes a viable way to make money in high density areas. Lease a handful of half-decent cars for a few years and leave them full-time as rental vehicles. If it's realistic to make $350/month for only 15 hours a week, that could be profitable. Presumably you would only need to get parking/storage-level insurance as driving insurance is provided by GetAround.
When I first joined Getaround, I had the same doubt. I wasn't sure if people would be willing to rent their cars out - full insurance, tracking, or not.
What's been interesting is the type of signups we've gotten - there are a bunch of regular cars, of course, but right off the bat we saw a lot of luxury vehicles as well (the Tesla being only one example).
We've seen an interesting trend, kind of similar to what the folks at Airbnb saw - sure, there's people who are doing it for the money, but there's actually quite a few people who've signed up because they want to help out their community/friends who need cars once in a while, or just because they want to share their cool cars with as many people as possible.
Or did the fact that it merely offered it put you off?
I'm not related to the app in any way, but I'm curious about your reasons.
Is there a way to see if there are any cars in a particular location? My second question while viewing the site was "is this available near me?" Your eligibility page answered that, as I'm not in the U.S., but if I was, I'd probably still want to know before handing over my Facebook info, and certainly before handing over my driver's license info.
I realize theft risk means you probably don't want to map every car to non-signed-in users like Zipcar can, but something like "number of vehicles within 5/10 km of zip code 90210" would be useful.
In fact, I only found out you're only in California from a discussion/support topic. That seems like something that should go somewhere prominent and upfront.
My background: I've run a car rental company for nearly 7 years now, so I know a thing or two about the logistics. Granted, my business deals with luxury/exotic cars, so some of the issues we face are quite different, but nonethless the core issues remain.
Here are my concerns:
* Rental cars get treated like crap, whether it's a Buick or a Bentley. "Mystery damage" appears in a high percentage of rentals. The customer will, 9 times out of 10, say "Oh, that was there when I picked the car up." We solve that problem by having a trained staff member take photographs of the car before and after and have the customer sign a very detailed check-in and check-out report with every inch of the car covered. In the event of a dispute, we are documented up the wazoo. If these transactions are happening person-to-person, how is that documentation being done? It takes at least a few weeks of solid training to get our employees accustomed to having "the eye" for damage to our cars. I doubt P2P renters are going to train themselves. This, then, opens up every rental experience to a massive potential for liability and dispute, and in the cases where the documentation isn't up to spec, both parties will be left with a very bad taste in their mouths (and potential lawsuits).
* Insurance. They claim to offer insurance, and I'm sure they've managed to find a carrier to cover them, but insurance in the car rental world is dicey at best. Often carriers will provide coverage, but if you've got too many claims (and a business like this is ripe for claims -- see above) then you'll get dropped like a hot potato. And if you get dropped, there aren't many other options. And the few options that exist cost 2x - 10x the price. I've seen this again and again - it's very easy to start and run a car rental company for the first year. Then you have an accident and it comes time for renewal and the story -- and numbers -- change dramatically.
* In general, and this is my weakest argument, lots of people try to enter the car rental business because they think of cars as commodities that can be treated like any other piece of equipment. The problem is that cars are massive rolling accident and lawsuit machines. If you're renting a dress to someone (Rent The Runway) or your couch (AirBNB) or a watch or a tux or etc. etc. etc. that's one thing. But there isn't a chance that dress is going to cause a death. Or a massive accident. And if the dress gets ripped, it's a $100/$1000 problem, not a $20,000 or $50,000 problem (or in the event of an accident w/ injuries, a $20M problem).
Anyway, I want to embrace new and innovative models, but this smells of disaster to me.
While some firms operate like yours, with detailed checkin/checkout process, others seem to care less as long as you turn up in something with the right plates on, that seems to be the right make and color. 10 minutes at one of the large rental locations in LA will show this. My thoughts are that these companies just work on volume, purchase the cars cheap, turn them over regularly and just work on pure numbers.
Whether this can translate to a mixed-lot private rental remains to be seen. It is just too easy for a one-time renter to do a lot of damage to a vehicle and disappear, taking their facebook account with them. The reputation model works well in many cases (see ebay with high reputation buyers/sellers) but breaks down at the starting point. I guess it can be covered by a higher premium for first time renters but then that is going to dissuade new people from trying out the service. Perhaps the company can offer cash bonuses to people willing to rent to first-time customers or something.
As for your last argument - I think - despite your valid claims, that a bog-standard rental car can be treated as a commodity, despite the mechanical complexity and insurance / liability issues. It just takes the right mix of legal protection and insurance underwriting. How you get that is the key to the puzzle, and the person that gets it right will win this battle, if it can be won.
The thing that makes Streetcar for me though is the customer service. I've gone to car drop places and it's not been there (parked on another street due to some idiot parking in the carshare spot), had problems in-car with the stereo (and in one case, working out how to put the damn thing in reverse!), and the CS reps have always been super helpful and proactive about helping me (and in the case with the moved car, gave me an extra half hour of rental time).
I guess you would have the actual owner on hand to help you with that sort of thing, but it's not quite the 24hr support and detailed knowledge about the cars I would get from the streetcar people.
My friend in Paris has listed his vehicle and gets tons of requests all the time. The demand is there for borrowing a car temporarily. (I-go, and zipcar), but there are legitimate concerns for sellers.
One way to do this is to ask for a deposit. This can be upwards of 3000 Euros which makes the seller appeased but also adds a barrier to the buyer. I wonder how this P2P model will work when one catastrophic event could ruin the business and reputation. There seems to be so many barriers. Not sure if the amount of revenue justifies the risks involved.
Peer-to-peer is "personable". Perhaps have some people e.g., Bob & Alice, and how it works for them. At the moment it is a bit cold and un-personable, and at worst makes possible users wary of the service.
See http://www.airbnb.com, for example: an embedded video with an attractive person. Goes a long way to assuring/soothing the prospective user.
I travel a lot lately, why can't I browse all areas that have opened up?
That may make me a luddite, a terrorist, or even a social-scrooge, but you'd think it would be worthwhile to make a minor concession to your potential customer base and allow people to create accounts without having to go through (and link them to) Facebook.
"You will be asked to log into Facebook. Getaround is a community built on trust and by connecting with Facebook, you enable safe and open sharing."
Probably the reason is they want to verify your real identity (i.e. legal name) and they have a better chance at that with Facebook. Although they could presumably do that with a credit card.
You may be interested in this:
Remember, your choice to speed is just that- a choice. Any negative repercussions you have brought upon yourself, happened as a result of your choices. I'm not judging you- it's not like I've never driven over the speed limit- but do remember it's a choice.
I'd also like to be able to show them how many miles I drive a year (ALOT!) - mostly highway out of state, so I have a far higher chance than the average person.
A simple 18 months figure (ZipCar's) doesn't get the guy with one ticket 2 years ago who barely drives with no experience. Also, I'd like to be able to show something like my credit score as it's an indication of my level of responsibility. Of course - it's a pipe dream...
I think the traditional car rental business today pretty much Just Works (tm). It doesn't have any huge flaw. Or rather, what flaws it does have, I don't see how this startup's feature set is solving.
I think the basic idea is exciting, and I wish them the best. But I think it's full of prickly complications that won't get magicaly solved by being able to throw up a sexy Rails website or by having an electronic widget in the vehicle. It doesn't really need this sort of technical solution, more of a people/legal solution. Their solution is orthogonal to the actual problem(s), is what I'm trying to say, if that makes any sense.
This is absolutely true, which is one thing that makes (working at) this company so interesting/challenging.
On one front, without technology development, you can't scale without a lot of capital investment -- even the custom technology used by zipcar is cost prohibitive (around the $1000 price-point, and requires several hours of professional installation). While we support swapping keys with the renter, we don't want to open both parties up to the inconvenience and liability of handing your keys over to a total stranger. The carkit provides greater choice to the owner as to how they want to rent out their car (allowing them use a smartphone instead of the physical key), and empowers them to keep better track of how it is used when rented out.
On the other, as you put it, technology doesn't solve all these prickly complications -- there are serious operations, customer support and business development problems that must be met in order to make this work. Insurance is a critical piece in the puzzle, and one that our team has been working on for a year and a half now. We are confident in our insurance partner and the custom policy we have worked together to create at this point -- and we will continue to work with our provider to ensure that we can continue to provide coverage as our company grows.
Or, worse, remove some of its engine parts and replace them with cheaper ones.
Do I need to tag each part in the car and strip it down each time it's returned to make sure no one has swapped anything out? (Some internal parts are expensive enough that it might be worth someone's time to rent my car and remove a new part for their own car rather than buy a new one themselves.) If this happens, how I prove it?
What about scratches? Does the car need to be photographed by both parties before and after each rental session. Otherwise either party could make a false claim about scratches or other cosmetic damages.
How are damage or theft claims verified and what role does getaround play in all of this?
Let's consider slightly older vehicles. Or, for that matter, even newer ones. How many parts on a car could be profitably swapped out with low value replacements while allowing the vehicle to remain operable? One could certainly replace a water pump with an older one, but it couldn't be so badly damaged that the vehicle could not be driven a few miles. What's the marginal difference in the value of the stolen part vs. the semi-operable one? Is the sum total of these marginal differences minus the cost of renting the vehicle sufficient to make this crime worthwhile? For non-commodity vehicles (a Honda Civic w/ many aftermarket parts, etc.), I can see positive ROI for the thief, but owners of such vehicles would no sooner rent them out than they would offer up their pets or girlfriends by the hour.
For the individual owner without fleet economics to back them up, however, one individual event (ie, theft, major damage) can be enough to put them out of the pool.
I would prefer personally approving people who want to rent my car...
I speculated about this in another post. Perhaps the CarKit thingy acts as a remote starter, so the renter never has the physical key?