Rent Out Your Car Via Onstar

Edward Niedermeyer
by Edward Niedermeyer

Onstar may have been pressured by privacy activists into dropping changes to its terms of service, but the telematics service is still betting that people want to be more connected than ever. So much so that it’s going offer a service allowing you to rent your car out to strangers.

A GM press release explains

RelayRides allows vehicle owners to choose to rent out their idle vehicles, with the owner controlling the rates and availability of the car. RelayRides provides an online marketplace and a $1 million insurance policy to make the transaction safe and convenient.

Through innovative technology integration, RelayRides will leverage OnStar to allow RelayRides borrowers to unlock GM cars with their mobile phones. For vehicles that are not OnStar enabled, RelayRides must install a small device in the car to provide convenient access to borrowers. The integration makes all eligible OnStar vehicles immediately “RelayRides ready” without having to install additional hardware…

RelayRides will leverage OnStar technology through a mobile application to allow customers to check for available vehicles, make a online reservation online as well as check future reservations, locate their reserved vehicle via GPS and lock and unlock the vehicle, all through their smart phone.

And GM isn’t just mating its Onstar technology to the “peer-to-peer” car sharing program (which is still only available in San Francisco and Boston), its VC arm GM Ventures “is in advanced discussions with RelayRides about an investment in the company as part of GM’s overall commitment to addressing urban mobility issues.” Car sharing programs have become a big trend in the automotive industry, with Daimler, BMW, Toyota and others jumping on the bandwagon in some form or other. But as might be expected from the company that brought us the Volt, rather than surf the trend, GM is going one step further by leading the industry into the peer-to-peer rental space. And as with all of these investments, it’s tough to see how this makes sense in the long term. In the short term though, at least this might “get butts into seats,” something GM execs say is the key to overcoming what they call “outdated perceptions” of GM products.


Edward Niedermeyer
Edward Niedermeyer

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  • Friedclams Friedclams on Oct 06, 2011

    I live in the Boston area, which is where RelayRides started. When I heard about it (they were leafleting outside subway stations) I briefly considered renting out my old van (vans make more rental $$) before deciding it was too risky. I thought the concept was dead in the water but here it is, years later, linked to OnStar. I am guessing RelayRides vets the potential renters, their insurance score, credit score, CORI report, etc. Whether that is good enough I don't know. But wouldn't this cannibalize the sales of new cars? Why the hell does GM want in on this? To sell OnStar units? I am baffled.

  • SunnyvaleCA SunnyvaleCA on Oct 06, 2011

    I see this as a "race to the bottom" system for both the owners and borrowers. Given the situation for the car owners and the car borrowers, I see a feedback loop that spirals towards beater cars and borrowers who can't rent from regular rental companies. Owners of nice cars aren't going to rent them out. Owners of already abused cars will see this as a way to make some quick money. Since the lenders have very little vested interest in the overall quality of the service (being but a tiny cog in a big wheel), the cars where the owners think it is "worth it" will be cars that are filthy, malfunctioning, damaged, etc. Borrowers are going to be pre-selected as well. Business travelers are more likely to use the rental car company at the airport and write off the business expense. People whose cars are in the shop are likely to go with a rental car company and have their insurance company pay--and people whose insurance doesn't pay are already a pre-selected bunch. Vacation travelers probably want to go with a known quantity when they are visiting unknown lands. Who is left? I also assume that lease agreements and car loan agreements absolutely forbid "commercial use" of any kind. If I were the real owner of the car (leasing company or bank), I wouldn't want this kind of risk without knowing the details and getting a bit of payoff too. People buying or leasing a new vehicle aren't going to rent it out (so won't require this option up front) and lease company or bank isn't going to later change their policy to accommodate this. When there are two insurance companies involved with every minor scratch on the car, each will point fingers at the other. If that's not the case and instead the program's insurance will cover any damage found after the borrowing, then an owner of the car will have a field day getting all sorts of minor damage fixed via insurance fraud.

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