Miguel Casillas figured renting out his company’s three-vehicle fleet made perfect business sense.
Casillas, executive director of the non-profit SV Links, shuttles international business tourists around Silicon Valley in a Tesla Model S, Model X and a Mazda SUV one week a month.
The other three weeks, the expensive cars sit idle. So Casillas listed them on Turo, a vehicle sharing service. Last year, he brought in $19,000 renting the cars out through Turo, helping offset the vehicles’ cost.
“I felt very nervous the first time I rented (out) a Tesla — it’s a very expensive toy,” Casillas said, but “it went very well.”
The first car-sharing platforms offered a meager selection of cars and were often little more than a way for environmentally conscious consumers to feel good as they fetched groceries, ran errands or slipped out of town for a mountain hike. But growing competition in the car-sharing market has multiplied choices and digital features for customers and owners.
Well-funded Bay Area startups Turo and Getaround pair individual car owners with consumers looking to rent a vehicle in a digital marketplace.
Major automakers have entered the game. Last year, GM established Maven, a vehicle sharing platform featuring Chevy Tahoes, Volts and other GM cars. Unlike Turo and Getaround, Maven owns and maintains the fleet, like a traditional rental car company, but offers more services and flexible renting schedules. Tesla has also hinted it may roll out a service, making its $90,000 cars more affordable to own.
You can still get a thrifty vehicle from longtime car-sharing service Zipcar to run to Monterey, but now you can also rent a Tesla Model S or a new Chevy Tahoe with WiFi and a $100 gas card. Vehicle sharing has spread beyond the coasts, into dozens of cities.
The Boston Consulting Group estimates 35 million people worldwide will use car sharing services by 2021. That’s up from 5.8 million users in 2015. It’s become far more popular in Europe and Asia than North America.
“The opportunity is so vast,” said Andre Haddad, CEO of San Francisco-based Turo. “We think that’s going to be the future of car ownership.”
The vehicle-sharing platforms start with a simple premise — vehicles are one of the two or three biggest investments consumers make. Cars sit idle most of the time, so why not unlock that value by renting it?
Turo and Getaround have created virtual marketplaces, or platforms, and take a cut when vehicle owners and renters are paired. All the car-sharing services offer mobile apps, allowing customers to browse and book cars instantly. Many offer advanced features through their apps, such as allowing customers to unlock vehicles through their phones.
The services have fared well in cities, where younger consumers are less likely to own or need a car.
Young renters “love the absence of a ball and chain,” said Brendan O’Brien, co-founder of Aria Systems, which provides payment software for vehicle sharing platforms and manufacturers.
Turo’s Haddad wants vehicle sharing to become the future of car ownership. The company, once known as RelayRides, had fewer than 50 cars when Haddad came on board in 2011. It now offers 125,000 vehicles and more than 800 models in cities and airports across the U.S. and Canada.
Turo offers a compelling deal for car owners and renters. By renting out her car one week a month, the owner of a new Tesla Model S can make enough through Turo to cover her
$1,020 monthly car payment. The owner of a Honda Civic can earn about $350 by renting out his car 11 days in a month.
The cost of renting a car through Turo can be one-third less than going through a traditional rental car agency.
But a few hurdles — cultural, not technical — remain. With so little experience in peer-to-peer rentals, owners may be reluctant to give over the keys to a stranger. Turo encourages owners to hand their keys to renters in person because they believe the personal connection helps build trust between parties.
“That’s an incredibly important part of that trust,” Haddad said.
Much of the company’s efforts have been to accumulate data — on driving records, safety, and personal information — to create a safe and reliable platform.
Getaround, Turo’s smaller San Francisco-based rival, grew from a student project.
“More and more people want to go car-free,” said co-founder Jessica Scorpio. “It’s just a market waiting for us.”
The six-year-old company has 2,500 cars concentrated in cities around the country. Getaround offers vehicles in urban parking garages for short day trips or weekend escapes. Its app allows a renter to choose a car, pay and unlock it from their phone.
Like Turo, Getaround gets owners and renters through background checks and driving history to ensure the proper mix of reliable and responsible users. Both companies include insurance coverage in rental fees, although owners still need their own insurance for their personal use of their cars.
Curtis Rogers, 35, lived in Nob Hill in San Francisco and was ambivalent about owning a car.
He was an early employee at Lyft and heard about Getaround from a friend. He rented from Getaround and had good experiences — the service was convenient and filled his occasional need for a car. When he decided to buy a Prius, he promptly listed his car with the service.
He averages $630 a month after Getaround takes its fees. “It’s definitely paying for itself,” Rogers said.
Of course, renting out a personal car can have downsides — more mileage on the odometer and engine, cleaning up after less-than-fastidious drivers. Some renters may struggle to figure out how to operate a Prius or Tesla.
Casillas said he’s had few problems with his customers. Since the vehicles can rent for $300 per day, he’s felt comfortable sharing his Teslas with affluent clients.
He became friends with a Turo user from Israel and later stayed at the man’s home on a business trip to the country.
“The people who rent these are mostly high-end,” he said. “I normally want to meet these people.”
Published at Thu, 06 Apr 2017 14:00:06 +0000