Are You Ready For: Peer-To-Peer Car Rentals?
With car sharing on the rise, my home state of Oregon is moving towards changing insurance rules to allow private “peer to peer” rentals by auto owners. The Oregonian reports that HB 3149 is headed for the Governor’s desk, having been approved by the state House and Senate. Sponsor Rep Ben Cannon explains
Most insurance policies prohibit people from using their cars for commercial purposes. This bill says someone can participate in car sharing without having to worry that their insurance will be canceled.
California is the only other state to have passed such legislation, and already Facebook-based peer-to-peer car rental firms like Getaround have popped up to fill the demand. With average car ownership costs reaching $8,000 per year according to the AAA, Cannon argues that research showing that cars sit parked for 90% of their lives proves the need for more car-sharing flexibility. And established car-sharing firms like Zipcar, which operate their own fleets don’t feel threatened by the bill, as they are not expanding beyond urban cores and as Zipcar’s CEO puts it, peer-to-peer rentals validate the car-sharing model. But would you rent your car to a stranger?
More by Edward Niedermeyer
Comments
Join the conversation
Great idea! I would love to buy a Panther and keep it available for the grad students in my area. Imagine, a 1099 sole proprietorship, renting your extra car to whomever needs it. If I were king, I'd write up a special kind of permit for it.
There's a phenomenon known as "crack rentals" or "rock rentals". If you don't have money to buy a rock of crack cocaine, you loan your car to your dealer, your dealer gives you the rock and drives your car around for awhile, probably selling drugs the whole time and thereby making your car "contraband" subject to seizure and forfeiture upon your dealer's arrest. http://www.urbandictionary.com/define.php?term=crack%20rental Similarly, I once ran into a guy who had several junky cars that he lent out to prostitutes in exchange for favors. I wonder if anybody stopped to think whether insurance laws like this would make crack rentals more likely.
I have an old Ford Ranger that I'd consider renting out like this. It's incredibly useful, but only a few days a month. If the rental fees would cover my ownership-expenses (which I'm sure would increase with lots of people driving it), I'd be very happy. RIght now, the thing is rusty yard-art 28 days a month. But those 2 days when I use it make it worth keeping.
I read the bill, and it's not allowing insurance companies to sell such policies, it's requiring that all insurance policies allow such renting out. If people borrowing the cars are somewhat more likely to get involved in accidents, that means that to some degree everyone is going to pay that higher risk through higher premiums. It was already legal to sell policies that allow sharing. What this does is make it *illegal* to sign up for a policy that forbids sharing in exchange for a premium discount.