How RelayRides wants to make money by renting your car
Many brilliant business ideas have come about from figuring out how to make money from unused time or assets. Take Airbnb, which allows people to rent out their homes or extra beds.
Now, RelayRides is taking that same idea and applying it to automobiles. Not using your car? Rent it out to someone else. At San Francisco International Airport, car owners can set up a deal with Relay Rides where they get to "park" for free, with the start-up then renting out their vehicles to travelers. The car owners are also paid 10 cents for each mile the car is driven.
While this might seem risky to some car owners, RelayRides chief executive Andre Haddad tells CBS News that all renters are vetted before they're allowed to take the keys. While car owners get to make extra money from their vehicles' unused downtime, the benefit to RelayRides is that the company is sidestepping the need to build a rental car fleet.
"We have a very good insurance policy that provides incredible protections to our owners and our renters," Haddad said.
The company has an off-site parking lot where car owners can drop off their vehicles for free. In addition to receiving a per-mile payment and free parking, owners also receive a car wash for their vehicles.
Cars are protected with a $1 million insurance policy, RelayRides notes.
Not every car is eligible, however. Automobiles can't be older than 2003 models, and need to be in "fair" condition. Cars also must have no mechanical issues and have a valid registration. On top of that, short-term deals aren't available, with owners needing to pledge their cars for at least three days.
One downside is that if an owner returns home early from a trip, RelayRides can't guarantee it can retrieve their car in time. The upside? Well, money. One San Francisco resident recently said she's made more than $12,000 renting out her car through the service.
The success of RelayRides is another example of the growth of the "sharing" economy, following on the success of Uber's instant ride-booking service and Airbnb. So far, RelayRides isn't as big as either of those other sharing services, but its new $25 million in funding will allow it to rev up its engines.