Getaround P2P Car Rental Model Is Working. Really Working

Getaround couldn’t have timed their debut at TechCrunch Disrupt New York in May any better. Rumors around Airbnb’s huge growth and new funding round were already swirling. And whether Getaround liked it or not, they were being dubbed the “Airbnb of car rentals.”

Like hotels, the car rental market is huge. And ripe for P2P disruption. Some people, like me at first, thought no one would hand their car over to strangers. But just like Airbnb, that’s wrong. Lots of people want to rent their car out. On average car owners get $325 per month renting the car out (and gas is paid by renters). The top 25% of owners get $910/month on average.

Many owners who don’t use their cars that often rent it through Getaround to make their monthly payments.

The average rental cost is $9/hour. There are higher end cars, too, like this Audi A4 for $11/hour, and this 2010 BMW 328i fro $15/hour or $60/day. The picture above is the owner of that BMW holding up his monthly check from Getaround.

Getaround is now handling over 15,000 hours of rentals per month, and they’re only available in San Francisco (more cities next year). Soon they’ll end field testing of the keyless carkit that will greatly ease the renting process, and it will become available on lots more cars.

And the growth. It’s still relatively small, but the company is growing by up to 50% per month right now. The model is proving out, and they’re preparing to raise a much larger round of financing to fuel growth (look for news on that soon).

I invested in Getaround shortly after they won TechCrunch Disrupt, and it’s looking to be one of the stars of the portfolio. More like this one, please.

37 thoughts on “Getaround P2P Car Rental Model Is Working. Really Working

  1. sghoshoxon says:

    All sounds cool but is not the rental costs too low… I mean, $9/hr – average rates is pretty cheap… And I don’t believe, they are renting out BMWs in dozens every day. Does the cash flow add up?

  2. Shout out to TechCrunch Disrupt… volunteered in May 2010 (and May ’11) in NYC, and both were the best conferences I’ve ever been to (“ever” being since my first tech conference at Web 2.0 in SF, March ’09). Had the opportunity to skip school for 2 weeks and help YouNow launch at Disrupt in SF last month too.

    It is an amazing adrenaline rush and what you and the team (biggggggg shout out to Gene!) created with TCD is so legit.

    If you bust out with an Uncrunched Conf sometime in the near future, please sign me up as a volunteer. So game. – John X

  3. Damon Pace says:

    Congrats to GetAround. It should be interesting to see them compete with the other P2P car sharing networks out there.

  4. Love the concept – has a huge potential. It will be interesting to see how Getaround and other P2P car services handle “bad” press, if any, that they might get in future (as happened in the Airbnb case when renter destroyed the property)!

  5. Getaround needs to white-label their technology and distribute through big-box retailers like Wal-Mart or Target (i.e. Wal-Mart Car Share Powered by Getaround). People could sign up in stores and receive their carkit (this could help with identity issues) and give them critical mass while helping retailer strengthen brand loyalty (users are now connected through this branded marketplace that helps them make extra money).

    Thoughts??

  6. Kori Handy says:

    I like the concept in theory, I also do not think people with BMW, Benz and Audi are lining up to rent their cars for $8- $11/hr. If your driving that car, minimum wage payments are not sexy. This concept will work for broke people looking to make extra monthly revenue who drive pieces of shit, not lending out my BMW any time soon so strangers can drive my car and treat it like crap. We all know how people drive rentals.

    This idea will fail, I am sorry to be that guy. Take it back to the drawing board.

  7. I think it makes more sense for renting cars than it does for apartments.

    Still, I’d hate to have a stranger in either my car or my apartment.

    • Social Media Maven says:

      If the money was right I might buy a car knowing I can pay it off with rentals. Keep it empty and if it gets dinged a bit, screw it, I wouldn’t care. Figure if I could haul in $450/month on a car with a $250/month payment I’d be making money on buying a car. Pretty cool.

      • Dave Smiddy says:

        I don’t have a problem with someone renting my car — it’s just a car. GetAround provides what appears to be a good insurance policy. So, it seems like an easy decision to make and GetAround’s site is pretty easy to use.

        I have had a 2010 Prius on GetAround for a week. It’s a great, clean car, that has about 8500 miles. So, I am a bit perplexed as to why my experience is not meeting the hype — I have had 0 rentals, $0.00 income. Are there too many 2010 Prius’ in the market? Is there not enough demand? Is there something screwed-up about my car’s profile?

        GetAround recommends a few things to help attract renters: Good pictures are required. I have good pictures. Do they need to be great? If so, that requires more effort and may not be worth the time.

        GetAround recommends lowering the rental rate to attract renters. I lowered my rental rate from $9/hour to $7/hour. Still no rentals at a 25% discount from Zipcar’s rate for a comparable car.

        What would help: Owners should have better information about demand in the market PRIOR to handing over their PII. A simple market overview page for owners to help assess competition and pricing would be great. GetAround should provide preferential treatment (i.e. position, highlighting, rev-share reduction) for new owners to help fuel demand. GetAround should provide a helpful critique about the new owner’s car profile before pushing it to the marketplace (i.e critique the photos, editorial, etc). GetAround needs a better system for marketing and promoting cars in order to win the 40% rev-share — leverage social media, user permissions to publish, email blasts, etc.

        I like the p2p sharing concept, just not sure about demand. I hope it works out. :-)

        • pj says:

          I think the appeal of Getaround lies in renting “cool” cars, just like the fun of AirBnb is to rent special spaces. So you’re not so much competing with Zipcar than with a BMW Z3 which rents for $6/hour at Getaround.

          My 2 cents.

  8. Daniel Cole says:

    Great to see GetAround continuing their progress towards mainstream. It will be interesting to see how they stack up against RelayRides and their recent deal with GM Onstar. Wheelz is also has a strong offering with a deep bench for talent. Either way, plenty of market to go around for a long time. Wish them all the best of luck.

    Ryan, interesting ideas about new distribution models to reach the masses. Important to work out all the kinds and legal issues at small scale before getting a Wal-Mart in the mix.

    My startup; ToolSpinner, will have the same disruptive impact for personally owned power tools.

  9. Tesla Roadster for $75 an hour? Sign me up! That would be a sick birthday present!!!

  10. Are there really enough dare devils willing to rent their homes or cars to make these kinds of businesses viable past a certain point? I’m curious to see where the ceiling is.

    Personally, I wouldn’t rent out my car unless it was a POS. I “rented” my car to a buddy after he begged me for hours. He threw me $300 and I finally gave in and he came back the next morning with a wrecked car. Despite him paying for the repairs I had to deal with a month-long process of fixing the car.

  11. James Greene says:

    If you are looking to rent out your recreational vehicle or rent someones recreational vehicle, check out Qraft.com.

    People make money off recreational toys they hardly ever use, and it opens up a huge playing field for people to experience excursions they normally would not be able to afford.

    Mike, this is one area with a huge market – easily 20 billion a year on recreational rentals.
    And we are eliminating the risk by providing insurance for those who rent and don’t have insurance.

  12. Carol Rose says:

    Nice concept! I would never rent out my car – considering what sort of treatment it can be offered by the renter but I guess I am an exception here.

    On the hindsight if I actually rent out a car it would still be mine and I can make the installment with the money I just earned through Getaround – So Cool! Wish them all the luck for the future

    • @Carol — we appreciate your optimism! It’s understandable to be skeptical about renting your car out to people you’re not totally familiar with—the whole concept of peer-to-peer car sharing is still pretty new (google “collaborative consumption”).

      We do provide insurance coverage as well as a community rating system to encourage good rental experiences. And yes, getting paid to share your car when it’s otherwise idle in your driveway is a healthy motivator for a lot of car owners.

  13. I’m not sure about that one. It might work for a little while, but I have doubt for the long term.

    The problem is, by comparison to AirBnB, it’s different to rent your house than your car. Your house doesn’t loose value every time you walk in or sleep in it. Actually, it’s an investment that just gains value.

    Cars don’t. Every time you add some mileage, value goes down. On top of that, you have to consider maintenance cost, which no doubt will increase if you have more usage from every joe and let’s just hope that no one scratches it or wrecks it lightly (some things might not be noticeable at first sight when the car returns, but after a couple of days/weeks it will break down, let’s say you bumped into a sidewalk or something). So those prices seem pretty low to me when you account for all of this (and accounting the cut that the company is taking for itself).

    Of course rental car businesses have been around for a little while, so it can work. Bringing it to p2p is disruptive.

    I just doubt it’s going to appeal to the mass, which means it’ll stay marginal at best.

    My pessimistic 2 cents on it :)

    • @Alexandre—depreciation is a fair question. It’s worth noting that the age of a vehicle represents a significantly greater (fixed) depreciation cost than miles driven (variable).

      A phenomenon we’ve noticed with P2P car sharing is that renters are far more likely to return a car in better condition to its owner than they would with a rental company. We’ve gotten a fair share of happy owners telling us a renter either washed or vacuumed out their car or filled the gas when they didn’t need to.

  14. Alex says:

    How about insurance? Accident? Dents? Crashes?

    • John Best says:

      Indeed. I think it’s going to be a difficult model to export globally, simply because of potential legal issues around insurance. I know here (in the UK) it’d be a difficult sell to get renters on board, as it would mean insurance price hikes, so any potential gains for the renter would be some way down the road (pun intended).

    • This would be covered by getaround’s insurance policy (500 deductible that the borrower would pay, then they’d pick up the rest), however, it doesn’t take away borrower headaches for having to deal with that madness. They also can’t solve problems that go unseen (which can be a big issue).

  15. John says:

    yeah, I know this blog is about crunchfund and its investments. but is too biased for my taste and I guess I will stop reading it. but now, for the first time, I see what problems TC might have with this kind of articles on TC.

  16. thessert says:

    Mike, Since I commented on the elvis picture, all your pictures have been extremely relevant. You originated the random photo, and it was hilarious.

    Anyway, huge supporter of this business model! The efficiencies for the world will see from services like this will be awesome. Why should a family own 4 cars?? We should move away from mass production.

    Detroit should design cars specifically for P2P sharing.

  17. Tom F says:

    You can’t steal and dismantle a house and sell the parts. But a car…

  18. Daniel Gold says:

    Shoutouts to my friends @sam zaid and @jessica scorpio on their hard work into making their company a sucess. !

  19. Nice to hear the term P2P. I knew it was gonna be big. http://www.P2Person.com

  20. John Taft says:

    Is it true that Sam, the CEO is dating Jessica (the other co-founder)?

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