Is it time to rent out your car for cash?

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Peer-to-peer car rental is coming to Portland. San Francisco-based startup Getaround launched a few months ago, and although they haven't made any specific plans, they have made it clear that they're coming soon. Other players in the space are likely to follow as well.

Peer-to-peer car sharing is sometimes characterized as "Zipcar meets eBay." While Zipcar's fleet-based car sharing model allows members to share a decentralized fleet of vehicles that are owned, insured and maintained by a single company, the peer-to-peer model championed by Getaround and its competitors, RelayRides and Spride, allow private car owners to make their vehicle available for use by other drivers in their area in exchange for payment.

Peer-to-peer car sharing is seen as a natural extension of online file sharing and the person-to-person lending model (also known as P2P lending or social lending), and a further move towards collaborative consumption — see www.collaborativeconsumption.com — which is increasingly popular since the rise of social media.

Getaround, RelayRides and Spride's business model replaces Zipcar's fleet with a "virtual" fleet made up of vehicles from participating owners. Participating car owners make money by renting out their vehicle when they are not using it. Participating renters, meanwhile, can access nearby and affordable vehicles and pay only for the time they actually use them.

Car owners set their vehicle's location and availability schedule. With Getaround, owners also set their hourly (and, at their option, daily and weekly) price, and have the ability to approve each renter. Soon, owners will be able to set separate pricing and availability for specific groups they define (e.g. just their friends and neighbors; or just a certain firm's employees). Since a private vehicle owner, unlike Zipcar, doesn't necessarily need to recover the full carrying cost of their vehicle, rental fees are expected to be a dollar or two per hour less than Zipcar.

A final advantage is that the peer-to-peer model works in less densely populated areas where there might not be enough daily demand to meet Zipcar's high breakeven costs. So residents of suburban and even rural areas that could never support the level of activity required by Zipcar can now benefit from car sharing.

Like traditional car-sharing companies, the peer-to-peer firms screen participants (both owners and renters) for things like vehicle condition and driving history. Their websites bring the parties together, manage rental bookings and collect and distribute payment. Insurance during the rental period is covered by the peer-to-peer car sharing company’s insurance policy, thereby completely shielding the owner’s personal coverage.

Getaround has already signaled their intention to launch in Portland at some point. How soon the company arrives here depends on how many people sign up to share their cars, and to use the service. Anyone interested in learning more can go to the company's website.

Steve Gutmann is a finance and business development consultant for several for-profit companies and the Portland Sustainability Institute. He is currently working with a range of private clients focused on district energy, carbon trading and networked, sustainable transportation.