Disrupting the Disruptors: Peer-to-Peer Car Sharing Service Launches Nationally

from the yet-some-people-are-still-worrying-about-CD-sales-for-chrissakes dept

One of the points we often try to make at Techdirt is that the effects of disruptive technologies are going to be felt far beyond the entertainment and publishing industries—they are not limited to the online world. The internet creates abundance of information, but it also creates a push towards decentralization in all things, and that’s one of the big ways it intersects with the physical: although you can’t download a car, you can create whole new systems for buying, selling, renting, reviewing and maintaining cars, and those systems will replace established but less-efficient ones.

Nobody is immune—not even the last disruptor. Companies like Zipcar changed the game with their car-sharing services, but they are already facing new challengers. RelayRides, launching nationally this week, has a model that takes things one step further:

While those companies own fleets of cars, RelayRides is entirely peer-to-peer — if you have a car, then you can make it available for rental when you’re not using it. RelayRides says the average car owner makes $250 a month from the program.

Since it takes advantage of the cars already on the road, founder and chief community officer Shelby Clark argues that peer-to-peer carsharing can have a big impact—after all, a fleet-based company couldn’t simply declare one day that it’s launching nationally.

That’s especially true in non-urban areas. For example, Zipcar doesn’t have any cars available in the Los Angeles suburb where I grew up, and it’s hard to imagine that establishing a fleet there would make economic sense anytime soon.

How big and how successful this approach will become remains to be seen, but it’s a creative idea that makes a clear point: disruption can happen anywhere, to anyone. As the entertainment industry continues to fight progress, experts from every side of the debate love to make profound-sounding statements about how the internet has changed our media consumption habits, but that’s old news. From mobile-based taxi & limo services to the coming era of 3D printers and things like the Pirate Bay’s Physibles site, digital technologies are disrupting a lot of things, not just media. Governments and industries cannot continue getting bogged down in tiresome debates about saving obsolete business models—not if they want to have any hope of embracing the opportunities, and solving the potential problems, of a fast-approaching future.

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Comments on “Disrupting the Disruptors: Peer-to-Peer Car Sharing Service Launches Nationally”

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Moby (profile) says:


Honestly, I don’t see this catching on in a big way. Even for companies like Zipcar that depend partly on an honor system, user integrity is a problem. I don’t have faith that enough car owners would maintain their vehicles to a standard most us are accustomed to while renting a vehicle.

I can just imagine the nightmare once a vehicle breaks down thru no fault of the driver and the owner freaks out. That is one scenario of many I see plaguing such an idea.

Anonymous Coward says:


It’s kinda weird, while I was initially (and still am) skeptical of the OP, it seems like the moment obvious trolls are against it, it naturally wants to make me less skeptical. There is a part of my brain that automatically says, Techdirt trolls are generally wrong and so if they say something chances are I should more closely consider the opposite.

Now I wonder if this is a sort of reverse psychology?

But, seriously, aside from the trolls, I do have my reserves about this kinda service.

Anonymous Coward says:


I’ll admit, I was skeptical too, so I went to visit their site to find out for myself.

Anyhow, I was interested because I recently got a job working from home, and so my commuter car (I used to drive ~100 miles/day) is now sitting in the driveway wasting away.

I’ve been considering selling it and sharing my wife’s vehicle, but now I might consider something like this. The only problem is, I don’t want to destroy the vehicle. If I still had my previous commuter (an older “beater” car), I wouldn’t have any qualms though.

Furthermore, I think a lot of people have a spare car that they kept when they bought a newer one – or have a spare truck they only use for utility. I think this program offers an interesting option for those people to monetize and otherwise make those vehicles useful instead of rotting int he driveway/garage.

Anonymous Coward says:


It’s a non-starter. Almost every normal car insurance policy for private use includes language regarding acceptable uses, including commercial use and such. You cannot simply “turn off” your insurance police for the time the car is on a rental. Basically, it’s insured at all times, and your insurance company retains primary liability. It’s very hard to get out of it. Further, while vicarious liability has been run off federally for rental cars, it’s not clear that a private car “rented out” would get the same free pass. That could make you, as the car owner, personally liable.

The FAQ is also very light on details. Who provides the coverage? How much is the coverage? Does it apply in all states / provinces?

It also doesn’t address issues such as car licensing. In many places, cars used for commercial purposes (such as rental) must be plated differently or with a different class of license plate. How would that line up?

There is so much here to deal with, in all sorts of angles, and way too many moving parts to get right. It’s a lawsuit looking for a place to happen, when some unlicensed driver who “borrowed” your car plows into a crowd and kills a few people, and suddenly you are left on the hook – with your insurance company dumping you for a non-covered commercial rental business, and potentially the “rental company” insurance not covering a car that isn’t registered to the company or properly registered for that type of use.

You also don’t want to know what a lawsuit would look like if your car has a known defect (like that leaky brake line) and you let it get “borrowed” anyway.

I worked a long enough time in the car rental industry to know the deal. It’s not as easy as it looks.

Anonymous Coward says:


Actually, what is 3 clicks away is a vague FAQ style answer that says little. Can you name the insurance carrier? Can you tell me where the insurance is good, and where it is not? Can you assure me that MY insurance company isn’t going to be on the hook, perhaps with a written statement from their carrier?

The site is remarkably light on actual information, plenty of vague generalities and reassuring statements with no names.

Anonymous Coward says:


And I’ve worked long enough in the insurance industry to know that you’re making a really big deal out of something that isn’t necessarily that complicated. I’ve worked with plenty of self-insurance pools that cover all sorts of non-traditional insurance situations such as this. You silly people dealing with commercial (for-profit) insurance policies always have make everything so crazy-complicated.

Insurance policies can be written to cover any eventuality – sure, maybe there will be a catastrophic claim, and RelayRides will incur a large loss. But if such a situation occurs, their insurance rates will likely increase and they’ll have to find a way to cover them.

Now, as for vehicle licensing, I’m not well versed in that. Considering RelayRides is working directly with GM, I’m guessing they’re not just some fly-by-night group by college kids who threw this idea out there overnight.

Anonymous Coward says:


“You silly people dealing with commercial (for-profit) insurance policies always have make everything so crazy-complicated.”

The problem is that as soon as your are renting your car out to people, you really need one of those crazy complicated insurance policies.

Oh, and I didn’t mention the tax liability as well. Will your income get 1099’ed? Will it move you into a new tax bracket? As a renter, will you be required to collect and submit state sales taxes? What about fuel taxes? If you loan out your pickup and it’s used to haul cargo for hire, you could run into issues there as well – such as is the vehicle licensed and insured for commercial use (delivery)?

Once you start taking money for something, it starts getting weird.

Anonymous Coward says:


An awful lot of those questions are answered in the terms of service…

It clearly indicates that the vehicle cannot be used for commercial services and it clearly states that you are responsible for your own taxes: “RelayRides will need certain information from you to ensure we can report income paid to you as required by law.”

It’s clear you just can’t comprehend that perhaps all of these things might have been considered before they decided to offer this service…

Anonymous Coward says:


It doesn’t matter if the terms say that they cannot use it for commercial purposes, because (a) as a rental, it’s already a commercial transaction, and (b) what is stopping them?

As for the tax issue, vague statements in a FAQ are not exactly clearing it up. 1099? What happens if the car is registered in one name, and payment comes to another (wife’s car, example).

Lot’s of holes.

Anonymous Coward says:


I’m starting to detect someone who is a bit sensitive that the rental car industry might have some competition…

Anyhow, I guess we’ll see if it sinks or floats.

I might even try it out myself… not because I consider it a way to make money, but because I consider it an interesting idea. The car owner has the ultimate say for each renter, so…

Speaking of taxes – I wonder if I could write off the car payment… Something tells me my tax lady wouldn’t be too happy 😉

Richard (profile) says:


It doesn’t matter if the terms say that they cannot use it for commercial purposes, because (a) as a rental, it’s already a commercial transaction, and (b) what is stopping them?

As for the tax issue, vague statements in a FAQ are not exactly clearing it up. 1099? What happens if the car is registered in one name, and payment comes to another (wife’s car, example).

Lot’s of holes.

All your objections are answered by one simple fact. They are already doing it!

They could not possibly have got this far if the problems you outline had not been overcome.

Andrew D. Todd (user link) says:

Actual Scarcities (To Richard, #20).

I am not particularly impressed by the fact of this automobile-share business being running in a small way. It’s like these apartment-share firms– the business is running on a limited supply of customers who have not thought through the possible consequences, and who will drop out when they get burned. In the case of an apartment, that means burglary and identity theft by a guest, meth-cooking, etc.– in short the usual occupational hazards of being an inn-keeper. In the case of rental automobiles, it means the statistically infrequent case of a bad crash, with one or more people seriously injured, and plaintiff lawyers creatively trying to find someone who can be sued (“deep pockets”).

You don’t generally need a national service to provide an essentially local product. When someone does a national start-up under those conditions, I always wonder whether he expects to make money from his ostensible customers– or from an IPO. Things like chain restaurants grow organically, starting with one restaurant, and gradually adding more locations, generally on the principle of local management buying in through the franchise system. MickeyD’s does not say, “everyone take turns using the griddle and the fryer to cook your own lunch.” They hire kitchen and counter help instead, and they are experimenting with robots.

Automobiles per se are not a scarcity– you can always get a “beater” for a couple of thousand dollars, and at that level, the capital cost of owning the automobile, the foregone interest if you had kept the money in the bank instead, is less than than the price of gasoline and the wear and tear on the automobile itself.

Don’t forget that downtown parking space is usually fairly valuable. Once you begin to have skyscrapers, they tend to outrun the available space for parking. It is generally easier and cheaper to build an elevator leading to more office space than it is to build ramps leading to sub-basement parking. Since the scarcity is the parking space, not the automobile, it makes sense to put a driver in the automobile, so that it can get in, pick up its passenger, and leave quickly. In short, a taxicab. A taxicab driver can control his risk, by not allowing the customer to drive.

Leigh Beadon (profile) says:


Lot’s of holes.

Why are you so anti-innovation?

Every time anyone has a new idea, you run yourself ragged trying to find every possible problem with it, every possible reason it won’t work.

You really are the worst kind of person. If everyone was like you, we’d still be living in caves with you sitting there saying “Make fire never work. Too hard! Rub sticks take too long. Tam-Tam MAD!”

Chris ODonnell (profile) says:

You know what else would never work?

Think of all the cars parked in garages and office building parking lots all day in major cities, and all the people without cars in that city that need one occasionally for 3 hours. I think parked commuter cars at work are the untapped market here. These guys might not be the ones to figure out how to overcome all the obstacles, but somebody will. That kind of excess driving capacity is just begging to be used.

tracker1 (profile) says:

For large companies...

I have a friend who is in Sr. Mgt for a fortune 100 corporation. One of their strategies for disruptive technology is to use the legal system to bury said entity under lawsuits until said entity dies in bankruptcy.

I have very little faith in our government and legal system so long as this is a reasonable strategy. I am fairly certain that his company isn’t alone in this.

Anonymous Coward says:


Oh Marcus, you are such a dick. When I come with valid arguments, you get to name calling, trying to slap an “anti-innovation” tag on me.

I am all for innovation. The difference? I don’t want innovation at any cost, innovation by ignoring the law, or innovation by ignoring the rights of others.

Look, this product is just something that may have some limited demand, but as I noted, the risks and the issues surrounding it are significantly larger than the benefits. Just because you CAN do something doesn’t make it right. You cannot have innovation without consideration for how that innovation works within (and around) existing systems and laws.

Example: If you rent a car, you could be considered to be running a business (home based or other) and you may require a permit. You may also require, if the people come to your home to pick up the car, to have liability insurance for operating that business.

There is just too much here for this to be a great idea. Zip car and other “car share” companies have the right idea, with ownership (and the risks and liabilities that come with them) centralized to one place. It’s a model that makes a ton more sense, and fits way more easily into existing rules, laws, and legal requirements.

As for the rest of the insults, honestly, grow a thicker skin child. The worst kind of person is the type that addresses those critical of their views with insults and such. I suspect that’s why Mike hired you, they two of you have a very similar approach when you are pointed out to be wrong.

Anonymous Coward says:


Nope, I don’t work in the car rental business (and have no financial links to it anymore either). It’s more a question of understanding all the legal implications that come with this sort of operation.

I guess the easiest way to explain it to people who don’t get it (like Marcus) is that there are too many moving parts on this one, and they are not really directly compatible parts either. The legal implications of private car ownership versus fleet ownership, commercial use versus non-commercial use, vicarious liability, trickle down liability, and so on all conspire against it. There are reasons why rental cars are more expensive than your monthly car payment (and no, it’s not just for making a profit), and they are all reasons why this one looks like a legal minefield.

My comment of the day is pretty simple: Just because something is technically possible doesn’t mean it’s right or a good choice.

art guerrilla (profile) says:


1. u r a dick (i’m being redundant: u r a lawyer, richtig ?) ANYTHING you claim is automatically suspect…
2. *CONSTANTLY* bitching about posters calling you names is both un-manly, AND hypocritical in extremis…
now, here’s the thing, *most* of us here are big boys and grrls, and a few choice insults and random curse words are no big deal; but it takes a real dickless wonder to bitch about being cursed, whilst cursing everyone else out…
*IF* you were the superior being you *CONSTANTLY* claim to be, you would be above the fray… instead, you wallow in the virtual mud with the rest of us tech-piggies, then complain because your wingtips got doo-doo on them…
man-up, wormtongue…
3. *NOT* that thinking of downsides, potential gotchas, etc is ‘wrong’, but -again- you are simply a dick about it…
(oddly enough, many dicks are self-righteous pricks, as well!)
of course, if you started acting like a human bean, instead of a parasite-on-society, er, lawyer, at least half your posts would be unnecessary…
really, you do your ’cause’ far more harm than good with your *CONSTANT* asshattery…
art guerrilla
aka ann archy
art guerrilla at windstream dot net

Leigh Beadon (profile) says:


Who said anything about innovation at any cost? It’s your attitude that is so awful.

You seem to derive a lot of glee from figuring out why everything will fail. Guess what? A lot of things will fail, and the people creating them know that. The investors pouring millions of dollars into services like this know that too. But the reason they are successful, while you are nothing but an idiot anonymously trolling a blog, is that they are not afraid of failure.

You, on the other hand, are terrified of it. Actually, worse: you seem to get off on it. You don’t have any good ideas of your own, so you put all your effort into tearing down the good ideas of others.

You know what would have been a great reaction to this piece, with all your thoughts about how it might go wrong? “Hey, cool idea, here are some things to consider, some problems that may come up, and some of my thoughts on potential solutions.”

But no, you are 100% sure this and everything else even slightly innovative will fail – and that leaves you in this hilarious state of angry stasis, railing against every attempt at progress. You should work on that, or you’re never going to accomplish anything.

Anonymous Coward says:


“Who said anything about innovation at any cost? It’s your attitude that is so awful.”

Innovation without consideration of the implications is innovation at any cost. No concern about what it does, no concern for how it might conflict with laws, no concern for legal ramifications… just innovation no matter what. That’s not really helping.

As for my attitude, it’s not awful – it’s realist. Sorry if that doesn’t mesh up with your pie in the sky look out your Mom’s basement window (and that is where you live, right?)

“that they are not afraid of failure.

You, on the other hand, are terrified of it. Actually, worse: you seem to get off on it. “

Nope, not terrified of failure at all. More power to them if they get it right, and too bad if they fail – their problem. My concerns aren’t bout success or failure, but rather what else they take out while they are figuring it out. When you pay attention, you can see the risks, and you work to mitigate them. If you want innovation no matter what, you don’t care.

“You don’t have any good ideas of your own”

Oh, how far from the truth little one. Too bad you just don’t know and don’t understand. As a side note, I am also a better rapper than you… 😉

“you are 100% sure this and everything else even slightly innovative will fail “

Again, not at all. They may succeed in some ways, but in other ways it might not be practical. Again, just because something is physically possible doesn’t make it the right choice or the right path to take. Careless innovation, especially if it hurts other people not involved, is the worst thing possible.

“you’re never going to accomplish anything”

Oops, too late, already did. You just don’t know it. Too bad! Marcus, you really need to learn that you don’t have all the answers, and that your naive way of looking at the world (encouraged by Mike’s cheerleading) just isn’t the whole answer to anything. I see you trying, but mostly you are flailing about trying to “be innovative” or “be about innovation”. Your ideas have to work in the real world, not just on paper, not just “it’s possible”. You have to have some solid ideas as to where you are going, and then you might do it.

One day, you might even have enough money to move out of Mom’s house, meet a nice boy, and have a relationship.

Anonymous Coward says:


Pretty simple: your car isn’t licensed for commercial use (required in most jurisdictions for rental cars).

Your car isn’t insured as a rental vehicle.

Your car isn’t inspected as a rental vehicle (required in many states).

Your standard insurance policy doesn’t have enough liability coverage for third party usages.

Your business (renting cars) isn’t registered with the city, state, or other licensing jurisdiction.

Real world lesson for you: All the terms and conditions in the world cannot bypass the state and federal laws regarding motor vehicles, business, and so on. You cannot T&C something that is no legal and claim it as legal.

Sorry to disappoint you.

TtfnJohn (profile) says:

Actual Scarcities (To Richard, #20).

Insurance issues aside, when I lived in Vancouver in the places that are forests of residental high rise towers known as the West End and Coal Harbour there were organized “lending” services where people with cars, the minority, would lend out vehicles on a per booking basis. When they started the cars were booked by calls to a common email box and then they could pick them up at the time and place the owner kept it. All of that is done on the Web now, I think. These services were and I suspect are very successful at what they do which is providing people with a vehicle should they need one.

The reason for the lack of cars in those areas isn’t as much lack of street or on property parking as it is that just about anything you can think of was available within walking distance or businesses would provide delivery, It certainly wasn’t because people couldn’t afford them!

If conditions are right, the price is right and the service is relatively convenient then I can see this or something like it succeeding. While it isn’t exactly “green” it certainly doesn’t add to the number of vehicles on the road and may reduce emissions some.

Andrew D. Todd (user link) says:

Actual Scarcities (To Richard, #20).

Well, I don’t know very much about Canadian auto insurance, but my understanding, based on a limited amount of internet-searching, is that it is much less high-stakes than American auto insurance, because you Canadians have national health insurance. The value of a damaged automobile isn’t really worth arguing about, at least not in front of a jury. It’s the medical bills, and the loss of income which are the critical element.

Likewise, outside of New York, very few American cities have “forests of residential high rise towers.” Americans make every possible effort to drive out of the urban congestion. In extreme cases, such as Los Angeles, significant numbers of commuters drive over four-thousand foot mountain passes to get to work, and live in the desert on the other side of the mountains. When one finds “forests of residential high rise towers” in an American city, they usually turn out to be welfare projects, as in the case of Chicago. In New Orleans, to get still more to the heart of the matter, the welfare projects were built on the site of the old brothel district. I realize of course that Vancouver has its own special geographic issues, but Americans would have resolved those issues by dynamiting road tunnels under mountains, and connecting up the tunnels with freeways, not by building high-rise apartment buildings.

The kind of people who would want to use shared cars in the United States would be people who commute downtown by public transit, as a matter of economic necessity, but who want to be able to drive around downtown at need. They have automobiles at their suburban homes, but they cannot afford downtown parking on a regular basis. Auguste C Spectorsky’s _The Exurbanites_ (1955) is the classic book about the conflicts of people who try to live a long way from their work. Fleet-based car-sharing service such as Zipcar work for people like this. I understand that Zipcar has a special arrangement for students living on college campuses, where congestion is enforced by administrative fiat (*). Zipcar’s economics are not materially determined by the cost of the automobile itself, since they only have about one automobile for every hundred members. The annual membership fee of $60, by itself, pays for the automobiles in about three or four years. Zipcar uses computer systems built into its cars to reduce the cost of running what is basically a conventional auto-rental operation, and to make it feasible to rent cars by the hour, instead of by the day, and to create “franchise locations” which are nothing more than reserved parking places. Of course, under certain circumstances, a reserved parking place may cost quite a lot more than an automobile, but this is reflected in the local rental rates. The minimum hourly rate would appear to be more or less competitive with a taxicab (or a delivery service), based on reasonable assumptions. I don’t think most Zipcar customers are saving very much money using Zipcar instead of taxicabs. It’s probably mostly a matter of emotional comfort. Either you like saying “Home, James,” or you don’t.

The problem with RelayRides is that it is attempting to expand into the non-congested zones where Zipcar does not find it profitable to go. In these zones, people have their own automobiles, stored in the garages built into their houses, even if they only drive them thirty miles a week or so. The idea is that one can go and visit the drive-through window of a fast-food restaurant without ever going outside, and people are willing to pay a bit extra for that. That is why they choose to live in suburbia in the first place. Obviously, for that kind of user, RelayRides is a step in the wrong direction, because the customer first has to go somewhere and get a car. At urban densities, of, say, 100,000 people per square mile, Zipcar can afford to put a car within a hundred or two hundred feet of every customer, especially because nearly every resident is a potential customer. In a suburban area, with a population density of, say, a thousand people per square mile, where shared cars are a minority taste, the nearest shared car might have to be a mile away from a potential customer. Someone might have to drive it to the customer, and be driven back again, and dropped off when the customer goes wherever he wants to go. And the same thing in reverse when the customer brings the car back.

(*) One will often see a college dormitory, ten or twenty stories high, built with state money, in a district where private builders and landlords concentrate exclusively on tract houses. Freshmen are required to live in this dormitory, and to buy meal tickets to the attached cafeteria, and, if applicable, a season ticket for the bus which takes them to and from the center of the main campus, and the administration deliberately refuses to build sufficient parking, so that it can forbid the students to bring cars to school. The whole point of the exercise is to make the freshmen insular, to force them to live AT school. It’s like making children eat their Brussels Sprouts. In short, “No, we won’t assist you in getting transportation to go and see a Harry Potter movie at the multiplex out at the mall, but we _will_ show an Ingmar Bergman movie in the Student Union, and educated people are supposed to understand references to _The Seventh Seal_, but they are not required to know about Harry Potter.”

Kevin (profile) says:

When will the truth come out

According to The NPD Group they found that in 2011, for the second consective year, the total number of music buyers increased, up 2%. Plus, total music-track sales rose 4% thanks to “a healthy paid-music download market.
Ref https://www.npd.com or
So if the major labels claim their sales are down yet overall sales are up then it must be golden days for Indie artists.
The majors missed the boat. Sorry, that boat is sailing to the future without you lot on board.

Jason says:

There is most here to touch upon, altogether kinds of angles, and approach too several moving elements to induce right. it is a cause probing for an area to happen, once some unaccredited driver World Health Organization your automobile plows into a crowd and kills a couple of folks, and suddenly you’re left on the hook – along with your insurance underwriter marketing you for a non-covered business rental business, and probably the insurance not covering a automobile that won’t registered to the corporate or properly registered for that sort of use.heathrow airport taxi

Insurance policies is written to hide any happening – certain, perhaps there’ll be a ruinous claim, and RelayRides can incur an outsized loss. however if such a state of affairs happens, their insurance rates can probably increase and they will need to realize the way to hide them.

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