Starting today, some six million General Motors vehicle owners with OnStar can rent their cars by the hour through the RelayRides nationwide car-sharing service - without having to meet the renters face to face. GM says owners could make hundreds of dollars a month, but the brave new world of street side car rentals comes with some unusual risks.
Car-sharing services such as Zipcar and Wheelz have been gaining popularity in urban areas, where many people need occasional transportation but can't justify the cost of owning and parking a vehicle. Yet the potential size of the OnStar-RelayRides network far surpasses even established rental-car firms like Hertz and Enterprise.
Launched in 2010, RelayRides lets car owners set their own hourly rates - typically $5 to $12 - and takes 35 percent of the revenues as its fee. Potential renters surf the company's website and pick cars by profile; the rental fee includes gas and 20 miles of driving, along with extra insurance and roadside assistance. RelayRides says some owners can make up to $650 a month from the service.
Before today, RelayRides owners had to either meet renters in person to drop off and pick up keys, or install a special card reader on the outside of their vehicles that allowed renters access at specific times. By using OnStar's ability to lock and unlock subscribed vehicles remotely, renters will now be able to get into an OnStar-equipped car by either smartphone or replying to a text message - one of the reasons GM's venture capital arm invested in RelayRides.
Users of RelayRides in Boston and San Francisco have already uncovered a few problems, from complaints of dirty, poorly maintained vehicles for rent to spotty customer service. RelayRides says vehicles must be in good condition, but will allow cars up to 12 years old and with 120,000 miles into its system -- far older than most rental companies. RelayRides and other services also require a clean driving record for renters, but in February a RelayRides renter died and injured four other people after crashing a rented Toyota Prius; as reported, the claims from that case could exceed the $1 million in insurance RelayRides carries.
And car insurance companies have raised other objections, warning people who rented their vehicles that such uses violate their personal insurance policy and could lead to their rates rising or getting their policies dropped. Legislatures in California, Oregon and Washington have passed laws banning insurance companies from that practice, but the option still remains in all other states. OnStar may make your car easier to rent, but that doesn't mean it's as easy as pushing a few buttons.
To see what we think about RelayRides, watch today's Daily Dish!