Courtesy Relay Rides

Peer-to-peer vehicle sharing services are ripe to expand to cities of all sizes

It was only a matter of time before car-sharing cut out the middleman. City residents already rent out their apartments through peer-to-peer programs like Airbnb, which was recently valued at more than $1 billion. Now people can be their own Hertz as well as their own Hilton. Anyone in San Francisco, at least. The Bay Area is home to at least five peer-to-peer car-sharing programs. The latest competitor, Wheelz, launched on the nearby campus of Stanford in September. (There are a number of others in Europe.)

The car-sharing model started by Zipcar has been tweaked in recent times. Paris has launched a test phase for its Autolib program, which will allow one-way sharing. Car-sharing is such a natural fit for cities that many are developing their own programs, as fellow contributor Emily Badger recently reported. But broadly speaking the field still belongs to companies. Peer-to-peer car-sharing expands the rental market to anyone who owns a car. Think eBay meets Zipcar with a Facebook twist.

With Getaround, for instance, owners set their own hourly, daily, or weekly rates. While the company takes a 40 percent commission, Getaround still estimates that car owners who rent their vehicle for 20 hours a week will make more than $4,000 a year. The model is a bargain for drivers, too. In San Francisco, for instance, Zipcar rates begin at $7.75 an hour or $77 a day (plus membership fees); rates at RelayRides begin at $5 an hour or $55 a day and include 160 miles worth of gas. Stories of apartment vandalism have surfaced among Airbnb users, but peer-to-peer car-sharing ventures include impressive insurance packages: Getaround offers full collision and theft insurance backed by Berkshire Hathaway; RelayRides provides $1 million liability coverage; Wheelz has a similar policy but also banks on the trust of a close-knit campus community.

The trend is clearly primed to grow. Last week General Motors announced a partnership with RelayRides that will make it easier for GM owners to join the program. While it typically costs $500 to outfit a car with the locking hardware required by RelayRides, GM will make the technology standard through its OnStar system starting in 2012. In a company statement, GM announced that RelayRides, which is also available in Boston, expects to branch into cities across the country. While many industry experts think car-sharing companies like Zipcar are tethered to large cities, the flexibility of peer-to-peer ventures gives them the potential to thrive in smaller cities.

The GM-RelayRides partnership is designed to boost sales — the more people who drive a GM, the more who might like to buy one — but it may also be good for city congestion. Households that join car-sharing programs "exhibited a dramatic shift towards a carless lifestyle [PDF]," conclude the authors of one recent study, with many one-car households shedding their lone vehicle. Car-sharing seems beneficial to city environments, too. In the same study, researchers estimated that the average car-sharing vehicle is 10 miles per gallon more fuel efficient than those shed by program participants. These benefits will only grow, the authors conclude, as peer-to-peer programs extend the range of car-sharing into lower-density neighborhoods.

About the Author

Eric Jaffe
Eric Jaffe

Eric Jaffe is the former New York bureau chief for CityLab. He is the author of A Curious Madness and The King's Best Highway.

Most Popular

  1. Design

    The Military Declares War on Sprawl

    The Pentagon thinks better designed, more walkable bases can help curb obesity and improve troops’ fitness.

  2. Modest two-bedroom apartments are unaffordable to full-time minimum wage workers in every U.S. county.
    Maps

    Rent Is Affordable to Low-Wage Workers in Exactly 12 U.S. Counties

    America’s mismatch between wages and rental prices is more perverse than ever.

  3. A house with two cars is pictured.
    Equity

    It's Time to Change How We Measure Affordable Housing

    A cheap home isn’t affordable if it comes with high transportation costs.

  4. Equity

    The Poverty Just Over the Hills From Silicon Valley

    The South Coast, a 30-mile drive from Palo Alto, is facing an affordable-housing shortage that is jeopardizing its agricultural heritage.

  5. A new apartment rises in Cleveland's University Circle neighborhood, one of the region's major job hubs.
    POV

    One Key to a Rust Belt Comeback: Job Hubs

    Cleveland is looking to make inclusive growth attainable by connecting jobs to people and people to jobs.