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Peer-to-peer: Members of RelayRides, a car-sharing website, can rent Natalia Widulinski’s Dodge Nitro for $8 an hour. Analysts predict as many as 10 percent of urban drivers will use such services by 2016.

Surprisingly, General Motors is supporting the concept as well. In October it became an investor in RelayRides, which has so far raised $13 million; the company plans to use the money to offer services in more cities. As part of the deal, GM will adapt its OnStar communications service so RelayRide members can use it to open, and turn on, vehicles that owners want to share. Executives at GM say they entered the agreement in an effort to make car sharing into “a favorable business model.”

The government is also studying the peer-to-peer model. Last month, the Federal Highway Administration agreed to provide $1.7 million to another company, Getaround, to fund startup costs and research on the impact of car sharing in Portland, Oregon. Founded only last year, Getaround operates in San Francisco and San Diego; it allows borrowers to access cars by using a custom-designed iPhone App.

The car-sharing companies screen renters by making sure they have good driving records. Cars must have state safety inspection stickers unless they’re in a state that doesn’t issue them, in which case they get examined by company inspectors. The companies have umbrella insurance policies that cover members while driving the shared cars, although drivers may be responsible for a $500 deductible. Drivers pay tolls and parking tickets. Enforcement is easy because the companies can track car usage and identify drivers by their access numbers. Getaround’s price includes the cost of gas, while RelayRides recently started to charge users for gas. California and Oregon have passed laws recognizing car sharing as different from traditional renting, meaning that borrowers in these states aren’t subject to the excise taxes and convention-center fees that cities frequently levy on car renters.

Not everybody is enthusiastic about peer-to-peer car sharing. Rick Hutchinson, president of City CarShare, an 11-year-old San Francisco nonprofit that owns the cars it rents out, says the idea is interesting, but “it isn’t clear how much it will reduce cars on the road.” City CarShare tries to reduce car use by encouraging biking and public transportation, and its fleet is made up primarily of fuel-efficient cars and hybrids.

Other skeptics question whether there will be much demand for any kind of car sharing outside of a few large cities, since in suburban or rural areas the cars available to users might be too far away to be practical. And while sharing appeals to twentysomethings, many older Americans can’t imagine life without a car of their own.

Still, sharing makes sense “if you do the math,” says Peter Campisano, a 71-year-old economist in Boston who gave up his Cadillac a year after he moved into the city from the suburbs. A ZipCar member, he says: “For me, it’s the perfect solution for my transportation needs.”

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Credits: RelayRides

Tagged: Business, Business Impact, business

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