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RelayRides: Like Zipcar without the car fleet

Posted by Scott Kirsner  April 12, 2010 10:07 AM

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When you first heard about how Zipcar worked, didn't it sound a bit strange? You're supposed to go online to reserve a car before you want to drive it? How do you ensure that people return the car when they say they're going to? What about keeping it full of gas, and keeping the inside from looking like a rental car at the end of spring break? How could car-sharing possibly work in America, which has celebrated car ownership for more than a century?

These days, Cambridge-based Zipcar has 350,000 members and a fleet of 6,000 vehicles in the U.S. and London, and the company could go public as soon as this year. 

And there's a new car-sharing start-up in town that sounds, well, a bit improbable: RelayRides.

RelayRides is similar to Zipcar, except the company doesn't actually plan to purchase any cars. They're going to use your wheels. 

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The idea comes from Shelby Clark, a former management consultant and Kiva.org executive now finishing up a degree at Harvard Business School. Clark says he went to HBS "with the goal of starting something with a social mission and social impact" in the case of RelayRides, increasing the utilization of cars that are already owned, and potentially preventing some number of new cars from being purchased. 

Clark is a Zipcar member, and says that when he lived in San Francisco, the service enabled him to avoid buying his own new car. "I think there's a real trend of people rejecting ownership in favor of access," Clark says. "You look at things like Netflix, RentTheRunway, Zipcar, or various textbook rental programs. You get the benefits of ownership without the hassle and cost."

Clark says that as a Zipcar member, he has occasionally run into car availability issues, and been forced to reserve a car several miles away. So he started thinking about how a car-sharing service might be able to station more cars in more neighborhoods around a city, without having to ensure that they were being used often enough. The answer: don't own the cars. 

RelayRides will enable car owners to rent out their own cars to others, and earn anywhere from a few hundred bucks to $8,000 a year, Clark says, depending on how popular their vehicles are, and how centrally-located.

"There's certainly a segment of the population that wouldn't consider it," Clark admits, "but there's also a segment that would say, this is real money, and this idea really resonates." Working with Clark on RelayRides is Dave Brook, founder of CarSharing Portland, the country's first commercial car-sharing service.

Initially, Clark's plan is to offer lower hourly rental fees than Zipcar (which would similarly include gas and insurance), but over time he wants to let owners set the rates. If you have a mint-condition Mercedes SLK parked in the Back Bay that you add to the rental pool, you should be able to command a premium hourly price.

The biggest concern people express about the concept, Clark says, is that a renter will damage the car. "We'll have a $1 million supplemental insurance policy that covers the rental period," Clark says. As to whether people will treat the interior of the car gently or not, Clark says hopefully, "If I borrow a friend's car, I'll tend to treat it better than my own car." Car owners who participate will also need to go online and set a schedule when their car is available for rental, and if you want to add a last-minute trip to the grocery store, there's always the chance that someone will have signed up for that time slot. RelayRides takes a 15 percent cut of all rentals, but passes the rest of the revenue on to the driver, who is responsible for buying car and handling the car's maintenance.

One really appealing possibility is that RelayRides could bring car sharing outside of urban areas into the suburbs, where Zipcar isn't active because of the lower population density. Nothing stops someone in Wellesley or Walpole from making their a car available for rental through RelayRides.

While car owners will at some point pay a fee to be part of RelayRides (the fee will cover the installation of an access control/tracking device in each car), Clark plans to run a pilot this summer with about 100 vehicles that will be free for car owners to participate in. "We'll see what happens when the rubber hits the road," he says. The company will be based in Boston for the time being, although Clark acknowledges he feels the pull of the Left Coast, having worked there prior to business school.

As to whether it might feel like a violation to share your personal vehicle with strangers, Clark points to the success of services like VRBO and Airbnb, which rent out vacation homes and spare rooms: "Letting a stranger into your house is a much larger barrier to entry, I think."

What do you think? Would you participate with your own car, if you could earn a few grand extra each year? Could this lure drivers away from Zipcar?

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Scott Kirsner was part of the team that launched Boston.com in 1995, and has been writing a column for the Globe since 2000. His work has also appeared in Wired, Fast Company, The New York Times, BusinessWeek, Newsweek, and Variety. Scott is also the author of the books "Fans, Friends & Followers" and "Inventing the Movies," was the editor of "The Convergence Guide: Life Sciences in New England," and was a contributor to "The Good City: Writers Explore 21st Century Boston." Scott also helps organize several local events on entrepreneurship, including the Nantucket Conference and Future Forward. Here's some background on how Scott decides what to cover, and how to pitch him a story idea.

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