I would love to hear what insurance companies would have to say about this. This qualifies as such a bad idea all the way around the I can’t imagine anyone support it.

Wait. Marcus thinks it’s good. That seals it, it’s a dumb idea.

Well, if you actually read the FAQ at the RelayRides website – they provide an insurance policy covering your vehicle and the renter of your vehicle during the reservation period.

But we wouldn’t expect you to read… that’s too hard.

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.

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.

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.

“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.

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.

I am more interested at the moment with Chicken Caesar – A Game of Plots, Politics and Poultry

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.

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.

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.

I followed link, twit. They links didn’t have any substantive information, just vague generalities.

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.”

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The kind of people who would want to use shared cars in the United States would be people who commute downtown by public transit,

Living in a big city like myself, these “p2p” car sharing services are great. I don’t own a car, but occasionally need to use one if I need to venture outside the realm of public transportation. Solid idea.

I am extremely glad to go through the interesting and endearing ideas discussed in the post. There are numerous points to peer-to-peer car sharing service, however, just as you said, how successful this idea will be only coming days will confirm it. porsche service & repair encino

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.