This is the state of the union around car-sharing, according to Getaround cofounder Jessica Scorpio: “People are on the cusp of tipping over to access over ownership,” she says. By that, I think she means it’s not quite there yet, and that could be a treacherous route to drive for any business if it doesn’t have investors and team members with the fortitude to see it through. (In Getaround’s case those investors are quite splashy: Menlo Ventures, Marissa Mayer, and David Sachs, among many others.)
In case you’re unfamiliar: Car-sharing allows car owners to rent out their vehicles to local folks while they are not using them, for hours, days, or weeks at a time. Getaround, along with RelayRides, is one of the main players in the nascent game. For example, if I commute on the bus to my 9 to 5 job, I can rent out my car during those hours to someone in need of wheels, instead of letting it sit idle in my garage. Today Getaround launched a revamped app.
The service is available in five markets, including San Francisco and Austin, TX. And users seem to be pleased with the service, giving it a 5-star rating on iTunes. A renter can get a Honda for about $6 or $7 an hour, or a higher-end car for $20 or more an hour. Car owners price their own vehicles, but the company coaches them on finding the right price.
Scorpio insists the timing is right for a business like hers to take off, with things like mobile and social converging to allow car-sharing to go mainstream. But since the company has a way to go before people really start to accept it, does that mean the company isn’t doing as well as it could? Scorpio won’t share revenues. But she does say that more than 10,000 car owners are sharing their cars. The company has founded in 2009, which gives you a sense of how long it took to amass that following.
Still, with this new app revamp, it’s clear that the company is aggressively gunning for user acquisition. Chief among the changes is the ability for nonmembers to browse the service’s map and listings of available cars. This removes the key source of friction stopping a user who is probably still on the fence: the sign up. What’s worse, it’s a Facebook sign up – which, for a privacy nut like me, is always cause for pause. It also affords other little quirks. Note this review from a Yelper:
Update: the next day I was told the reason my account was suspended was no posts & no friends on facebook, so they could not verify my identity!!!
Of course, if you do browse the map, and are convinced to join, you’ll eventually need to connect through Facebook. But after you’ve had a taste, the thinking goes, you won’t be able to resist joining.
Also a part of the launch, the company has listed two Tesla Model S’s on Getaround Instant, Getaround’s Zipcar-ish feature. Instant cars are available on demand from pickup locations around the city, as opposed to a renter having to wait to hear back from a car owner and discuss logistics about meeting up.
In the pantheon of startup waves, the sharing economy, which is the buzzword umbrella under which Getaround falls, is one of the most refreshing in Silicon Valley in a long time.
But while refreshing, it isn’t all that new. Airbnb has rightfully gotten a lot of credit for ushering in the age of the sharing economy. But the idea that you could make use of idle resources that would otherwise go to waste has been a constant in the scientific community for years. For example, Rosetta@home is a bio-computing project that relies on people donating use of their computer processors to help advance the project’s research. Volunteers run the Rosetta program on their computers when they don’t need them.
But there are different emotions around sharing things like homes and cars. So what else could be stopping people from sharing their cars? It can’t only be that the user experience is inconvenient. This time Scorpio gives a safer answer: it’s new and still foreign.
There’s also a perception problem around insurance issues, perceived or otherwise. The company is backed by Berkshire Hathaway, and offers coverage up to $1 million. California, Oregon and Washington all have car-sharing laws that protect vehicle owners in the event that a renter has an accident. Still, there have been reports that some insurance companies either pretend they don’t exist, or don’t know they exist. And there is fear on a car-owner’s part that an insurance company might refuse to renew a customer’s service if that person is sharing his or her car.
CEO Sam Zaid has told me in the past that the Getaround drivers have had probably under 50 incidents, which are minor and usually result in a tow truck being called to the site or giving the driver a replacement car. But as for car-sharing in general, there is one oft-cited tragic case from a RelayRides driver in Boston, who crashed into another car and died at the scene, badly injuring the four adults in the other car. It’s a horrible case, but a bit anomalous in terms of the insurance question because the driver was killed.
Because insurance companies are so risk averse in nature, they often go for the most stringent solution – and what’s more unorthodox than collaborative consumption? Scorpio says a Getaround customer has never been denied insurance renewal, and that it’s simply a matter of educating the insurance agent.
Maybe then will the scales really tip.