Peer-to-peer carsharing (also known as person-to-person carsharing and peer-to-peer car rental) is the process whereby existing car owners make their vehicles available for others to rent for short periods of time.
Peer-to-peer carsharing is a form of person-to-person lending or collaborative consumption, as part of the sharing economy.[1] The business model is closely aligned with traditional car clubs such as Streetcar or Zipcar (est. in 2000),[2] but replaces a typical fleet with a ‘virtual’ fleet made up of vehicles from participating owners.[3] With peer-to-peer carsharing, participating car owners are able to charge a fee to rent out their vehicles when they are not using them (cars are driven only 8% percent of the time on average).[4]
Participating renters can access nearby and affordable vehicles and pay only for the time they need to use them.[5][6] In 2011, an American research company Frost & Sullivan calculated that an average Getaround renter saved over $1,800 per year by using a car-sharing service over owning a car for the same number of miles driven.[7] In 2014, the United States House Committee on Small Business stated that “buyers pay less than they would without the service, and sellers earn more--if only because they often would not be able to bring their service to market without the peer-to-peer platform.”[8]
Businesses within this sector screen participants (both owners and renters) and offer a technical platform, usually in the form of a website and mobile app, that brings these parties together, manages rental bookings and collects payment.[9] Businesses take between 25% and 40% of the total income, which covers borrower/renter insurance, operating expenses, and roadside assistance.[3] In return they provide roadside assistance, customer service and vets renters with DMV checks.[9]
As with person-to-person lending, the Internet and the adoption of location-based services as well as the spread of mobile technology have contributed to the growth of peer-to-peer carsharing.[10] Also, millennials are less attracted to car ownership as previous generations.[11]
Although many personal auto insurers in the U.S. exclude coverage for commercial use of insured vehicles either through a livery and public transportation exclusion or a specific "personal vehicle sharing program" exclusion,[12] In 2011, California was the first U.S. state to pass Assembly Bill 1871, which allowed private car sharing.[13] Several other states in the U.S. have passed legislation allowing individuals to share their cars without risk of losing their personal car insurance. These include California, Oregon[14], Washington, Maryland,[15] and Colorado.[16]
In the U.S., New York is the only state that does not allow peer-to-peer car rental because the owner cannot exclude him or herself from liability to a renter.[citation needed]
Peer-to-peer car sharing has the potential to reduce the number of vehicles on the road and lower pollution levels.[17]