Americans love their cars. But the truth is that we don’t really use them all that much. At least that’s the premise put forth by an exciting new startup called Getaround, whose goal is to create a peer-to-peer network where anyone who owns a car can rent it to anyone who needs a car. Getaround, which is based in San Francisco, has been earning some serious buzz since winning the prestigious TechCrunch Disrupt award on June 1.
The idea for Getaround was hatched in 2009 at Singularity University, a Silicon Valley-based institution founded by Dr. Peter H. Diamandis and Dr. Ray Kurzweil in 2008. The university brings together cross-disciplinary leaders who are charged with funding solutions to humanity’s greatest challenges. One such problem, as founders Sam Zaid, Elliot Kroo and Jessica Scorpio saw it, was that most of the 250 million vehicles in the U.S. idle unused for 22 hours a day. What if they could find a way to make sharing those cars as efficient and safe as, say, renting a hotel room? With that challenge, Zaid, Kroo and Scorpio decided to remain in the Bay Area to see if they could turn their concept into a for-profit enterprise.
Certainly, Getaround has a foundation to work off of, as the peer-to-peer concept has already proven viable in other areas; The market for vacation rentals and hotel rooms has been disrupted by sites such as AirBNB.com and project-funding has seen the rise of Kickstarter.com. Given the success of those models, “the founders decided to create the AirBnB of car rentals,” says John Atcheson, Getaround’s vice president.
One of the interesting decisions the Getaround team made was to reach beyond their website by fully embracing the latest social media tools and technology in bringing their venture to life. That meant building a smartphone app and using Facebook as a gateway where new owners and renters could sign up for the service. Signing up for the service is free, though it does require you to own an iPhone or equivalent smartphone that will let you deploy the company’s high-tech app, called the Getaround Carkit. The app combines GPS, Wi-Fi and keyless remote technology. In other words, renters need only their iPhone to get rolling in their rented ride, which, depending on the ride you choose, costs a minimum of $3 an hour (the site currently boasts a Tesla roadster, which is available to rent for $50 an hour with a two-hour minimum).
At the same time, owners get full control over when their car is available, how much it costs and even to whom they want to rent. Getaround recently overcame a major barrier to making owners feel comfortable using the service when it partnered with Berkshire Hathaway, the insurance company owned by Warren Buffet, to offer coverage that includes liability, collision, and comprehensive (theft, fire, etc.). That coverage supersedes the policies of both owners and renters while the car is rented. As a bonus, renters also receive roadside assistance coverage as well.
For its part, Getaround plans to take a 40-percent commission on every deal it brokers which, given that it estimates that a renter can earn $2,000 a year simply by renting their car for an hour every day, could make for a nice renewable revenue stream.
There’s no doubt that the company shows promise—something that has already attracted investors such as General Catalyst Partners and Barney Pell—but it remains to be seen whether Americans in particular will be so willing to let anyone else drive their precious cars even for an hour.