P2P Car-Sharing Clears Insurance Hurdle In California

September 30, 2010


Over the past couple of years, many Americans have learned how to cut costs and share, not consume. But when it comes to cars, many of us still stubbornly hold on to more vehicles than we need.

And fittingly, entirely new types of businesses have sprung up to broker this sharing, take care of the legalese, set some ground rules, and make it possible.

Earlier this year, it looked like the idea—called P2P (person-to-person, or peer-to-peer) car-sharing by some looking to get into the business—was poised to catch on quickly. At the time, one operation, RelayRides, based in the Boston area, was just launching.

We thought P2P car-sharing would have caught on a bit more by now. After all, it's kind of like social media, but with vehicles. And you end up saving (or making money) by either loaning your car out for a small fee or not having to own another one. But, as it turns out, there are a number of legal hurdles. In our nation's most populous state, California, owners would have been violating their personal auto insurance policies by doing such a thing—even though P2P car sharing would provide coverage during the borrowed time.

Now, that hurdle has been cleared by in California, and a Bay Area company called Spride Share has already begun operating.

So far, another major hurdle for making P2P car sharing work involves getting the process going—getting enough people enrolled, with cars available where and when they're needed. Spride Share reportedly plans to merge with a large, 13,000-member non-profit car-sharing operation (City CarShare) next year, so it's promising.

[Fast Company]

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