Getaround: Peer-to-peer car sharing and car rental startup

Based on the screenshot in the tour, setting your price to $12/hour nets you $9.60/hour, so they charge a 20% commission. Not bad considering all the insurance and so on is taken care of.

To prevent rental abuse, it would be interesting if their car kit had an accelerometer, monitored RPM, etc. to detect when things are outside of the norm. There are some other potential issues I see with this. Their car kit appears to plug into the cigarette lighter -- what happens if someone breaks in and steals it? Also, those with integrated Bluetooth handsfree should not use their vehicle's address book functionality or they expose that to any renters. What if someone returns your vehicle but parks it in a spot that, the next morning, becomes a "no stopping during rush hour" zone?

It'd be interesting if this becomes a viable way to make money in high density areas. Lease a handful of half-decent cars for a few years and leave them full-time as rental vehicles. If it's realistic to make $350/month for only 15 hours a week, that could be profitable. Presumably you would only need to get parking/storage-level insurance as driving insurance is provided by GetAround.

Modern car security usually involves a coded key. The key is coded to an immobiliser computer, which is then coded to the main engine computer. Sometimes the key works by RFID. Without the correct combination of key/immobiliser/engine computer the car will never start. You can't just replace the key - it has to be ordered via the dealer and programmed to match the car - same goes for all the other computers. You can't just take out an engine computer from car A and put it into car B and expect it to work. Each is encrypted to only talk to it's matching set of key/receiver/immobiliser computer/engine computer - subsitute one out and nothing will work. The actual ignition lock is immaterial - and a lot of newer cars have done away with it altogether and just have a slot for the key and a start button instead.

So for someone like Zipcar etc, it wouldn't be economically feasible to try and develop new hardware for the car that adapted/circumvented the proprietary immobiliser security systems in modern cars. Much cheaper and easier to leave the original key in a locked box.

As for parting out- you're probably correct. Without an original set of keys, you're not going to get the car going again, because the only way to get a key is to apply to the factory for one. And they keep a list of stolen vehicles in the same way cellphone companies know which handsets have been stolen.

The flipside of all this - if you're purchasing a used car and only one key is available start asking questions why. If you go to the dealer to purchase a replacement key you might find out that the car has been blacklisted and no more keys are available. Cars that have been carjacked or stolen by stealing the owners bag with keys in it generally don't have the spare keys available.

But, if it's profitable for me to buy a car for the purpose of renting it out, why shouldn't the startup cut me out and directly purchase cars to profitably rent out? And get economies of scale while they're at it? Maybe it's a way to bootstrap, but it seems like an unstable strategy, and that those purchasing cars to rent out are likely to find themselves on the receiving end of, ah, an uneconomical transaction.

My background: I've run a car rental company for nearly 7 years now, so I know a thing or two about the logistics. Granted, my business deals with luxury/exotic cars, so some of the issues we face are quite different, but nonethless the core issues remain.

Here are my concerns:

* Rental cars get treated like crap, whether it's a Buick or a Bentley. "Mystery damage" appears in a high percentage of rentals. The customer will, 9 times out of 10, say "Oh, that was there when I picked the car up." We solve that problem by having a trained staff member take photographs of the car before and after and have the customer sign a very detailed check-in and check-out report with every inch of the car covered. In the event of a dispute, we are documented up the wazoo. If these transactions are happening person-to-person, how is that documentation being done? It takes at least a few weeks of solid training to get our employees accustomed to having "the eye" for damage to our cars. I doubt P2P renters are going to train themselves. This, then, opens up every rental experience to a massive potential for liability and dispute, and in the cases where the documentation isn't up to spec, both parties will be left with a very bad taste in their mouths (and potential lawsuits).

* Insurance. They claim to offer insurance, and I'm sure they've managed to find a carrier to cover them, but insurance in the car rental world is dicey at best. Often carriers will provide coverage, but if you've got too many claims (and a business like this is ripe for claims -- see above) then you'll get dropped like a hot potato. And if you get dropped, there aren't many other options. And the few options that exist cost 2x - 10x the price. I've seen this again and again - it's very easy to start and run a car rental company for the first year. Then you have an accident and it comes time for renewal and the story -- and numbers -- change dramatically.

* In general, and this is my weakest argument, lots of people try to enter the car rental business because they think of cars as commodities that can be treated like any other piece of equipment. The problem is that cars are massive rolling accident and lawsuit machines. If you're renting a dress to someone (Rent The Runway) or your couch (AirBNB) or a watch or a tux or etc. etc. etc. that's one thing. But there isn't a chance that dress is going to cause a death. Or a massive accident. And if the dress gets ripped, it's a $100/$1000 problem, not a $20,000 or $50,000 problem (or in the event of an accident w/ injuries, a $20M problem).

Anyway, I want to embrace new and innovative models, but this smells of disaster to me.

Peer-to-peer is "personable". Perhaps have some people e.g., Bob & Alice, and how it works for them. At the moment it is a bit cold and un-personable, and at worst makes possible users wary of the service.

See http://www.airbnb.com, for example: an embedded video with an attractive person. Goes a long way to assuring/soothing the prospective user.