Peer-to-peer carsharing

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]