Car Insurance Car

I took my first trip in a Portland car2go vehicle this wet morning — a 10 minute trip from NW Portland over to my house in NE Portland.  Given the weather it was probably the least auspicious launch of any car2go city.  But by noon at least the rain had stopped and people were venturing out of the houses and condos and coming downtown.

Yes I could have done the trip by transit — 44 minutes by bus with one transfer (and we have frequent service) — or 22 minutes by bicycle, but I was soaked and, besides I had this brand new car2go membership cards that was itching to be used.

Portland must now hold some sort of record for the most number of carsharing vehicles per capita — a little over 700 vehicles from the 3 companies — Zipcar, Getaround and now car2go — for 500,000 people in the city.  With 3 services, each with slightly different niches, the choices to go car-lite or even car free have never been greater.


What are the niches for Zipcar, Getaround and car2go? This is my take:

•  Zipcar is the premium brand for reservation-based, round-trip carsharing.  They've got a wide variety of new and late model cars, pickups and minivans.  The cars are parked throughout the close-in neighborhoods and, for regular users, they've got some membership plans that bring the cost down.

• Getaround, the peer to peer carsharing option for reservation-based round-trips has slightly older vehicles (none older than 1995) in an almost infinite variety of types, with the older vehicles at considerable discount over Zipcar, making them the affordable carshare choice.  Accessing the fleet is a bit more complicated since you have to request most vehicles from the owner via text message and you may have to meet them to exchange the keys (depending on how they've set up their Carkit.  (It's worth noting that both Relayrides and Just Share It also have a few vehicles listed in Portland.)  

• Car2go, of course, is on-demand carsharing with floating parking anywhere in a large (but not quite large enough) "home zone" + one-way trip option.  As long as a Smart car will get you and a friend to your destination it's an amazing service.  And, I think it will likely transform many peoples' trip habits as they get familiar with it.

One local, long-time industry observer (not me) predicts that zero car households in the close-in neighborhoods could be greater than 50% in the next few years — that's a long way from the current 16% we are now.  Of course that won't be solely because of carsharing — Portland has done many things right over the past 20 years — density, walkable neighborhoods, good transit.  And, it looks like we'll even get public bikesharing sometime soon!

And if you're interested in what infrastructure is conducive for households to actually start lowering their vehicle ownership, transportation planner Jarrett Walker has written a very interesting piece about it.  He thinks Portland has many of the right factors in place, even though we are not even in the top 50 cities for low car ownership.

So, I welcome car2go to Portland.  You're in good company here.  And thanks for the free coffee and Honkin' Huge Burrito (from one of Portland original food carts) this morning, too.

Thanks to Chris Brown of Auto Rental News for this informative interview with RelayRides founder and now Chief Community Officer for this informative peek behind the curtain of RR's national strategy here. And way to go Shelby and crew.

During the past few weeks, we've seen a couple of big developments in peer to peer carsharing:

• Zipcar announced significant investment in P2P startup Wheelz 
• Getaround launches 2 new cities — Portland, Oregon and Austin, Texas — and wins another award
• RelayRides roared back to life announcing a national expansion strategy and new operating policies

Zipcar's investment in Wheelz answers the question many have been asking about what Zipcar's response to P2P was going to be.  Wheelz business model is focused on college and university campuses s it fits with Zipcar existing strategy. At the present Wheelz is operating on only one campus (Stanford), so Zipcar has certainly gotten in on the ground floor of P2P.  Exactly how (and indeed IF)  Zipcar intended to integrate Wheelz into their existing operation and marketing is the next big question.  At this stage I would expect them to let the P2P market develop for a while and concentrate on behind the scenes integration.

Meanwhile Getaround seems to be maintaining its PR lead against other rivals (RelayRides, JustShareIt and Wheelz among others) being bestowed the title "market leader" by consulting firm Frost and Sullivan.  They also announced that Getaround is the recipient of the 2011 Frost & Sullivan Enabling Technology Award, presented to a company that has "developed a pioneering technology that not only enhances current products but also enables the development of newer products and applications".  The press release notes Getaround's new member screening process, "carkit" technology and smartphone app. Just about every carsharing company has some version of all 3 of these.   Getaround, like Zipcar, has done a good job of staking out their claim to technology prowess.  (My 2¢: depending on how it develops, RelayRides partnership with GM/Onstar may ultimately prove to be a much more significant development.)


RelayRides announcement of a national strategy was their attempt to get back in the spotlight.  Another part of the announcement was that they were instituting personal key exchange as an alternative to installing in-vehicle technology (similar to Getaround).  Key swap enables customers to sign up and immediately start renting out their vehicles without the cost or delay of getting technology installed (even the Onstar system is not plug and play).  And it appears that some vehicle owners appreciate meeting the people who are renting their car (and it may even encourage a little better driving behavior on the part of the renters, as well).  As I've said before I've got no problem with "key swap" per se, only that I'd call it car rental, not carsharing, since I don't think key swap offers the customer a level of convenience (unattended access to the vehicle) that constitutes "real"carsharing (i.e. so that it can serve as an alternative to owning a vehicle for a significant number of people).

New York Times Skeptical of P2P

Meanwhile, New York Times writer Josie Garthwaite wrote a Wheels blog entry that raised doubts about RelayRides strategy of going national when only 2 states had personal vehicle carsharing laws in place.

While there certainly are benefits to having a personal vehicle carsharing law in place, I think the article overstates the risk of a P2P company operating in states that have not enacted laws defining personal vehicle carsharing.  The big risk is to RelayRides if they got embroiled in some legal morass about which insurance should apply in a particular claim situation (which is certainly a possibility). However, RelayRides insurance company has signed off on the national approach, so they're the one's really taking the risk, and if there's anyone who has figured out how to profit from risk, it's insurance companies!

In states without P2P laws, it seems to me the biggest uncertainty faced by the P2P company is a possible slower growth rate.  This might occur if vehicle owners worry that their personal auto insurance might be cancelled or what might happen in the event of an accident during a P2P trip.  Depending on how the P2P company addresses this concern, it's posible fewer people may chose not to enroll their vehicles in the service.  RelayRides used to post a video with a long testimonial by a customer whose vehicle was in a major accident during a P2P trip (not sure if it's still on their website or not?)

It's worth noting that no personal auto insurance company that I'm aware of has publicly stated their opposition to the concept of P2P carsharing.  I would like t to follow up with direct interviews with RelayRides members in Massachussetts, which does not have a P2P law, to determine if the risks and uncertainty are as great as are suggested in the article.
What will next week bring?

A little reminder from The Consumerist web site of what happens when carsharing meets the real world.