By on October 5, 2011

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though, at least this might “get butts into seats,” something GM execs say is the key to overcoming what they call “outdated perceptions” of GM products.

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37 Comments on “Rent Out Your Car Via Onstar...”

  • avatar

    Why does a LARGE part of me have an immense problem with allowing folks to come up and lock/unlock my car via their cell phone? I mean, I’m sure there are safety features built into this system, but I think I’d rather pass on something like this.

    • 0 avatar

      Why does a large part of me have an immense problem with (If I’m an average Joe) letting an uncontrolled stranger take temporary possession of my car to do what ever they will, where ever they will, with it?

      “But occifer, that’s not my dime-bag under the seat, it must have been stashed there by the last person who rented my car via On-Star!”

      Seems like a great way to drive-down the book-value of your car before you’ve even finished paying-off the loan!

      Idea is dead on arrival unless there are so many people just barely hanging onto their cars that this is their only hope of forestallng reposession… … but then again, maybe such is the situation of the average Joe in the current economy?

      If this is such a good idea, look for the GM dealer-body to jump-in with both feet using their used-vehicle fleet to populate the rental program.

      btw, anybody think the graphic detail of the powerpoint slides is a bit excessive for communicating the idea? Tome, either they have an over-staffed graphcs department, mamagement that doesn’t realize that such pretty detail costs money, or these slides were prepared for public introduction (of a seemingly stupid idea that should have been killed by the board or CEO.)

      • 0 avatar

        @Robert Walter: “btw, anybody think the graphic detail of the powerpoint slides is a bit excessive for communicating the idea? Tome, either they have an over-staffed graphcs department, mamagement that doesn’t realize that such pretty detail costs money, or these slides were prepared for public introduction (of a seemingly stupid idea that should have been killed by the board or CEO.”

        Speaking as a graphic designer, just how much time do you think that slide took to prepare? If it took more than 15 minutes, the designer should be fired. Unless you’re being facetious, the details on the slide are pretty basic. We’re at stick figures for people and rectangles upon rectangles showing houses.

        Personally, I’d like to work on an over-staffed graphics department, as having been in the in the biz 27 years, I’ve never seen one.

        Sorry to say, but my trade has been infiltrated by a bunch of folks who have little training and less talent. Powerpoint graphics can be produced pretty inexpensively and aesthetically cheaply, too.

  • avatar

    I cannot imagine renting out a car I’ve paid for to a total stranger. I know how rental cars are used… what private vehicle owner would sign up for this kind of thing?

    • 0 avatar

      +1. Although if you lease your car for 3 or 4 years and turn it in, I could kind of see it. You’ll probably be out of it before the results of any abuse show up, and if not it will still be under warranty. Even still though, if the renter keeps it longer than planned and I need it, I’m screwed. I don’t see this model taking off.

  • avatar

    Allowing strangers to use my car for a fee? Even if RelayRides provides an insurance policy, why would I want to be my own Zipcar? How do you deal with abuse, smoking, etc. Even a “car is a Maytag” folks should think twice about this. I do agree that GM does need to get people to log some seat time in their products to help put to bed the notion that all their stuff is crap. The truly closed minded folks (jj99 I’m looking at you) will never change their mind, but there is a whole generation out their that has had very little exposure to non truck GM products. If Hyundai can erase the memory of the Excel, GM can as well…

  • avatar

    they got rid of brands and streamlined in order to become more focused then they go off and find more distractions and hair brained ideas. “Shiny New GM”? I don’t think so…

  • avatar

    If she is young and hot, I will rent out my back seat.

  • avatar

    I spend ~30 weeks a year in rental cars. I don’t drive them any differently than my own cars.

    Given rental rates, you could probably completely cover the average car payment with 3-4 daily rentals a month, though I assume they are targting shorter rentals like Zipcar does. I would find that somewhat compelling, assuming the insurance end of things is properly covered. I assume that smoking in a non-smoking car will be handled the same way hotels and Hertz do it, a hefty fine billed to the persons credit card.

    Anyone in Maine want to rent a BMW? Given my travel schedule it will sit in the garage more than 50% of the time. I have a pragmatic view of such things, having rented out the spare room in my house to short-term interns a couple times.

  • avatar

    This can only end in tears.

    Well, bent fenders and tears.

  • avatar

    I think Sanjay needs to enroll his ZR1.

  • avatar

    This is sort of like Airbnb for cars, and before jumping in, folks ought to read about what has happened to some people renting out their home to total strangers that way.

  • avatar

    Well, think of it this way: With OnStar GM can not only keep track of where the car is (or is going and has been), how fast it’s going, how hard it’s being used, the weight on the seats, what’s playing on the stereo, and probably also images collected through RVM-mounted mini-cams as well as voice conversations.

    So you should have NOTHING to worry about! All that information that’s being collected will help keep your upholstery clean and your fenders undented. And I am sure it will never, ever be used for any questionable purpose whatsoever. I mean. . . I haven’t read the TOS on it or anything. I just clicked “OK”. But I’m sure it’s ok. I mean. . . GM is part of the government, basically. And it’s not like they feel at liberty to kill US citizens or anything.

    So go ahead! ;-)

  • avatar

    I’m guessing no one here has used Zipcar or any of the other flexible renting services.

    If I lived in a larger city and only used the car occasionally, this would be a way to make a few extra bucks. I would tend to agree with krhodes, I don’t drive a rental car much different than my own car.

    All that OnStar is doing here is muscling in on Zipcar’s (and others’) turf, by leveraging their technolgical advantage.

  • avatar

    Would I need to visit the DMV to have the vehicle’s title branded as a rental vehicle or will GM/RelayRides take care of that and just mail out an updated version?

    Are the banks that cover the loans/leases ok with lowering the value of their collateral like this? Never mind, they are GM vehicles so they had no significant residual value anyway. This will add to that in a huge way unless they don’t count since they are fleet vehicles or something.

    • 0 avatar

      Someone didn’t read the part about the “million dollar insurance policy” provided by GM.

      Really, my biggest concern would be that the car gets used by bored businessmen for afternoon quickies with diseased hookers.

  • avatar

    And would your current insurance policy cover the damage when the renter crashes your car? Are you protected from being sued by a renter over claims that they were injured in an accident because you failed to maintain your car properly?

  • avatar

    I cannot believe that someone ran the numbers and determined that this project had some sort of payback. You only have X number of cars out there with on-star. You have to undercut daily rental rates to make it attractive to the renter. Undercutting daily rental rates means limited profit by GM and/or the owner. If the owner profit is too low, you’ve reduced your pool of people willing to do this. If GM profit is too low, the program wouldn’t have gotten off the back of [Lutz’s] napkin (wait, scratch that). All jokes aside, I can’t see this having a very wide appeal. It seems like it is targeted toward city dwellers, but I’d certainly not let someone else take my car out and park it god-know’s-where in a city like Philly, for example, where people seem to park by feel. If it was targeted toward trucks, it would at least make some sense because all of us need a truck occasionally.

  • avatar

    Looking forward to flogging every Corvette in the neighborhood.

  • avatar

    tax implications?

    since this is income is it not?

    and the car becomes a tool for earning money?

  • avatar

    Hertz and the rest of the rental companies are gonna be p1ssed about this.

  • avatar

    I somewhat wonder if the amount of money owners would get from this would even be more than what they’d get by using their car as advertisements. I’d much rather stick some ads on the doors and maintain full control/use.

  • avatar

    As others have said, insurance is the elephant in the room.

    To discuss the idea without mentioning that (probably lethal) cost, is a waste of bandwidth.

  • avatar

    How do I make sure renters of my car already know how to drive a 6-speed? How do I make sure they don’t drop the clutch ?

    In a word – NO. (although maybe for $2k/hour…)

  • avatar

    Sounds like a perfect way for drug dealers to go about their business

    buying, selling, shootin’, pimpin’

    New car everyday, tellin’ y’all GM owners, out the way!

  • avatar

    Lemme flame for a bit here:

    This is how money is made. Take an underutilized, depreciating asset and max out the utilization as much as you can. You think Southwest is worrying about the condition of its interiors? Their whole business model is based on “keep that plane in the air AS MUCH AS POSSIBLE”.

    I know how awful airplane interiors can become, I’m a Gold member on Delta. But fear of wear & tear doesn’t stop landlords, who usually retire quite wealthy with a nice income stream.

    The ideal situation here is a smart college graduate who buys a new Malibu and a new house. He takes roommates to pay for his house. He rents the car to said roommates. Just as they cooperatively keep the house clean, they cooperatively keep the car clean. Since this blog is as much about being financially smart as it is about cars, the average TTAC poster should not be deterred from driving a used car to save a buck. Therefore, having trusted friends/family paying off your car for you should be no problem.

    Personally, I’m looking forward to this. I’d be interested in buying a stripper Colorado and undercutting local U-Haul services.

    It’s all about setting up income streams that, once established, provide a trickle of income. Several trickles combine to form a steady stream.

    Now, lots of people like to blame others for being poor. It’s easy to let someone else take care of you for 30 years and then retire. But a few smart NYC residents could make a few dollars doing this.

    • 0 avatar

      I think the big difference you are missing is Delta doesn’t let you drive their airplanes.

      I’m really afraid someone is going to rent my car to “teach” someone to drive stick for 2 hours and then stick me with the repair bill. I’d be afraid to rent out any stick car in the USA for the same fear.

      Also: Anytime I rent a car for a few days it’s because I’m going to do a ton of mileage, otherwise I’ll just use my own.

      Last rental was just shy of 3 days and I put almost 1800 miles on it. If someone did that with my sports car, how would I make _ANY_ money by renting at a price most people would find reasonable?

      If I let someone borrow my car on a Sunday & they bring it back a few days late I could be out of a job…….

      As other posters mentioned, if someone has drugs on them & they get pulled over and your car gets seized you are screwed every which way to Sunday. Does GM insurance cover that?

      Way too much risk for very little reward (unless you raise your prices accordingly).

      • 0 avatar

        You’re putting too much of your situation in the picture. This program is not for you, either as a renter or owner.

        First, of course you’re not going to lease out your stick shift or sports car. I wouldn’t trust my cream-puff roadster. Instead, I’ll use my old Fit or buy a used minivan to rent out.

        Second, it sounds like you already have cars to drive. This program is for renters who do not have cars already, either by choice or necessity.

        Finally, you’re also applying your situation to the reward. $2000 a year for 33 rentals (at $15 hour, 4 hours per rental) is $116 a month extra after 30% taxes. For some people an extra hundred bucks and change per month is worth 11 hours without a car. It might be peanuts to you, but it’s a 5% raise to someone making $40k.

      • 0 avatar

        So how much does a new tranny/brakes/$other_big_part cost when someone abuses your car & it dies? Is it still worth it then? I don’t think insurance covers wear & tear…

        What makes you think all of those 33 renters or that $2k you just made won’t be eaten up by tires/brakes/transmission/etc ? It just takes one of those renters to be irresponsible and you are in the red, even with a cheap car.

      • 0 avatar

        Here are the insurance FAQs from RelayRide, for those who are interested.

        As to Robstar’s comment about risking a transmission/etc, it sounds like their insurance might cover some damage.

        As for the rest of the risk, damn right there is risk. Where there is risk, there is reward. That’s how money is made. The trick is to manage it. Some people would rather not bother with it.

        How does insurance work?
        RelayRides provides a supplemental insurance policy from an independent, national carrier that will cover the borrower during the reservation. You (the owner) retain your existing policy that will continue to cover you during the times when you drive the car. Then, whenever a reservation takes place, RelayRides’ insurance kicks in and provides a $1,000,000 comprehensive liability protection. If anything goes wrong, RelayRides’ insurance covers the damages.

        If a borrower gets into an accident, will my insurance be affected?
        No, your insurance is not affected. When you drive your car, you are covered under your existing policy. However, when a borrower uses your vehicle, we provide the insurance policy to protect them and your car. If they get into an accident, our insurance policy will go into effect, leaving your personal policy untouched.

        What happens if a borrower wrecks my car?
        If there is an accident, we will file an insurance claim for you under the program provided by RelayRides. Our insurance carrier is an independent, national brand that will provide a rental while your car is in the shop, or pay you the value of your vehicle if the car cannot be repaired.

  • avatar
    Steven Lang

    I’ve been doing this for nearly two years.

    Here’s the cliff notes version.

    Rent the cheap car. DO NOT EVER rent the expensive car.

    Always get a $100 deposit, get the debit card information and make sure they have current insurance with a $500 to $1000 deductible. Liability only equals no keys to your car. Also make sure their driver’s license is current.

    The vehicle folks come in with is usually a pretty good representation to how they will treat your car.

    The law is more than likely not on your side. If they don’t return the car, you may have to go through an asinine several week procedure where you have to inform them via certified mail and let a certain time period go by BEFORE even beginning the paperwork for a warrant. Related to this, always bring spare keys.

    Attract the folks you would want to rent your car. Do not put something on Craigslist and then just hope for the best.

    Finally, the insurance policy for this service does not include abuse. THAT will more than likely be your big issue if you keep on renting your vehicles out.

    Good luck!

  • avatar

    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.

  • avatar

    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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