Frugal Shopper: P2P Car Sharing Could Save You A Bundle

Economic woes have got you thinking about whether you need that second or third vehicle at all?

What about borrowing a car from the neighbor whose vehicle is parked nearly all the time?

If only you knew when the neighbor's car was available and has set some ground rules. That's what a few new specialized P2P (person-to-person, or peer-to-peer) car-sharing services aim to establish, while saving money for those who don't need a car and making a little extra dough for those who do happen to own an extra one.

The concept of so-called P2P consumerism isn't entirely new—the term has been applied to sharing media like music and movies for years. But the idea has recently been expanded to use our connectedness—Internet, mobile devices, and all—to match people who own a desirable thing with people who want said thing, whenever it's available. Examples include Rent The Runway for fancy clothes, or HomeAway for vacation rentals.

Relay Rides, a Bay Area startup rolling out its services beginning next month, first in Boston, is one of a growing number of "collaborative consumption" services, enabled by technology, potentially allowing both car owners and renters to be able to defray or completely avoid some of the costs of ownership.

Almost like social media, with vehicles

Basically, after owners sign up, they tell the website or mobile application when there vehicle is available; likewise, renters shop those vehicles, based on when they need one, where it is, and what they need. Relay Rides covers the renter with comprehensive insurance and makes sure that he/she has a good driving record.

The company also puts a GPS device in the car (looking something like a taxicab computer) that can unlock the vehicle, immobilize the engine, and tracks its whereabouts; if it's not returned where and when anticipated, the company will help you locate the vehicle and will automatically assess a penalty.

Since so much of Relay Rides' success rides on technology integration, the company certainly considers itself a tech firm, says director of marketing Boris Mordkovich.

Relay Rides has standardized rates based on the model year of the car and whether it fits into Economy, Full Size, or Specialty categories. Given those variables, renting a Relay Ride could cost from $6 to $12 per hour, or $48 to $96 per day, with excess miles (over 20 per hour or 160 per day) costing 40 or 50 cents per mile.

Get money for loaning out your car, without the fuss

Would it be possible to play the system and become your own single-car-rental outfit? Sure. Surprisingly, Relay Rides does pitch itself as a way to make extra cash. "We're like like a car matchmaker, bringing people who have cars, and those who need them, together," it says, and according to the company a typical car owner could earn between $1,300 annually for a compact, offered ten hours a week, to $12,000 annually for a luxury model offered 30 hours per week.

A comparable service, called WhipCar, just launched in the UK and soon hopes to expand into other cities in Britain.

Is this the next big thing for car-sharing companies, which have been expanding at an astounding rate over the past decade? So far, "It's a more advanced form of 'Hey buddy, can I borrow your car,'" said John Williams, the spokesman for Zipcar, the world's largest car-sharing company, and it won't work for everyone—especially those who need a consistent experience, with clean, well-prepared cars in the same place each time, when they need them.

To help assure some level of quality with Relay Rides, though, owners get to rate the renters, and renters get to rate the cars.

Back in 2007, Zipcar bought out chief U.S. rival Flexcar, and it's continued its growth with various market expansions and conquests. The company just announced this week that it was buying the UK-based firm Streetcar—adding about 1,100 locations, in eight British cities, and about 50,000 members, for a new combined total of more than 400,000. Streetcar locations will eventually be given the Zipcar name.

Although its most popular vehicles are smaller, city-friendly vehicles like the Toyota Prius and Scion xB, Zipcar typically offers a wide range of vehicles like the Honda Element, Subaru Impeza, Toyota Tacoma, or Toyota Sienna, among many others.

Rental-car companies getting into the business side of it

Some rental-car companies are starting to wise up to the advantages of car sharing, though it's not all that different than short-term renting in some cases. Hertz has a car-sharing "Connect by Hertz" service in some college towns, Enterprise has WeCar, and U Haul has a U Car Share operation in some markets. And there are locally run car-sharing networks in a number of other U.S. cities as well as many Canadian and European ones. Several automakers are also getting involved in the business of car sharing, including Daimler, with its Austin-based Car2go.

But even with all these possibilities, if you're in a major metro area and looking to borrow a more unusual vehicle, like a Jeep Wrangler or perhaps a heavy-duty pickup, for a special task, you might have luck with a service like Relay Rides once it gets enough users.

P2P car sharing will come first to cities that already have existing car-sharing companies, because "people there are already familiar with this concept," said Relay Rides' Mordkovich. "But you'll find more availability and a lower price," eventually, on a P2P market, he says.

P2P could work where Zipcar won't

Mordkovich reports that Relay Rides so far is seeing "a lot of people who are really enthusiastic." And, he points out, the company's business model has the potential to be rolled out in areas where traditional car sharing simply wouldn't work; he argues that Zipcar relies on its vehicles being used for as many as nine or ten hours a day to make a profit, whereas they make the same percentage whether the vehicle is used only an hour here and there. So you could see car sharing start to make sense away from dense urban centers.

Owning a late-model vehicle, even for occasional use, is pricey. As we reported a couple of weeks ago, the average driving cost for a sedan is nearly $8,500 per year—or, not counting fuel but counting insurance, depreciation, financing, and maintenance, more than $6,000 per year. And many of those costs are fixed or nearly fixed whether you drive a lot or a little.

If P2P car-sharing services take off, they could be yet another alternative to owning a vehicle that might sit most of the time—and for city-dwellers accustomed to shuffling unused cars around from space to space, it could help a lot with neighborhood parking congestion.

And given today's high rates of unemployment, we bet there are a lot of U.S. car owners looking for a better way of utilizing that vehicle in their driveway—especially if it puts some extra money in their bank account.

[Guardian; NY Times Wheels Blog]