Making car-sharing a carbon-sharing service
RelayRides is the latest startup to target San Francisco for an online service that lets people rent their cars to those in need of wheels for a few hours (the company is also starting up in Boston). Think of RelayRides as a Zipcar without its own cars. (A local Bay Area competitor is Spride Share.)
In reality, RelayRides and Spride Share are carbon-sharing services.
Instead of adding to greenhouse gas emissions by acquiring a new car — or creating demand for an Avis or Zipcar to buy a car — you use an existing one with the carbon already baked in. Car owners profit from sharing by pocketing the rental fee minus a 15 percent commission paid to RelayRides. The Cambridge, Mass., startup is backed by Google Ventures, among other investors.
Here’s how it works:
You sign up with RelayRides and have a device installed in your car that lets renters unlock the vehicle with a membership car as one does with Zipcar. It also tracks mileage and includes a GPS location chip. Your car is also outfitted with an immobilizer that prevents anyone from starting the vehicle without a reservation.
Owners go online to specify the times their car is available and the rates they want to charge. They’re responsible for paying for the gasoline renters use and are on the hook for any damages to the car up to $500. RelayRides vets the driving records of renters, who pay a mileage charge if they travel more than 20 miles in an hour.
RelayRides estimates that owners that rent their car for 10 hours a week can earn between $2,300 and $3,700 annually, depending on the type of vehicle.
Policy, not technology, had been the obstacle to peer-to-peer car sharing. But a law passed this year in California allows people to earn money from sharing their car without automatically voiding their insurance policies. RelayRides, however, insures each car owner participating in the program for up to $1 million.
“Consumers are increasingly rejecting traditional forms of ownership, preferring to borrow rather than buy,” Shelby Clark, RelyRides’ chief executive, said in a statement. “RelayRides builds on this changing consumer behavior by enabling neighbors to support each other, both financially and practically.”