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Cut-rate wheels: P2P car rentals picking up speed

Shelby Clark, founder and chief community officer of RelayRides, at the company's office in San Francisco.
David Paul Morris | Bloomberg | Getty Images
Shelby Clark, founder and chief community officer of RelayRides, at the company's office in San Francisco.

There's a new and cheaper way to rent a car—get it from someone who lives near the airport.

On a recent trip to Washington, D.C., Denise Williams rented a 2010 Toyota Corolla from Edward Salwin through RelayRides, the nationwide peer-to-peer car sharing site.

"The price was excellent," she said. "My rental was about $25 per day and all the rental car places at the airport wanted at least $50 a day, so I literally cut my price in half."

Salwin even offered to meet her with the car at baggage claim for no extra charge. Normally, renters have to pick up his car one Metro stop away from Reagan National.

"Picking up the car can be a little more of a hassle, but you can end up with a nice vehicle at a much-reduced cost," he said.

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RelayRides is a big player in this new P2P car rental industry. It was started in 2008 and went nationwide 17 months ago. Through its website, vehicles are available for rent-by-owner in about 1,500 U.S. cities.

RelayRides moved into the airport rental business in June. When owners list their car for rent, they put their home location and the site automatically shows members the nearest airports where it can be rented.

"Our prices tend to be between 20 and 40 percent cheaper than the traditional fleet-based car rental company," said CEO Andre Haddad. "And we are able to do that because we operate a virtual marketplace where we don't have to set up all the infrastructure and operations of a traditional car rental company."

The fleet is varied and always changing with many models that you can't get from the big-name companies, such as BMW, Infiniti and Audi.

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Tim Hebb, who lives near LAX, will rent you his 2013 Nissan Leaf for $47 a day or $300 a week. It's popular with people who are concerned about the environment or who want to try an all-electric vehicle, he said. Meanwhile, his 2002 Audi A4 (which rents for much less) appeals to visitors from Europe and Asia.

"It's very personalized service," Hebb said. "I bring it to the airport and pick you up curbside. It's pretty cool."

Another way to beat the system

FlightCar is another relatively new peer-to-peer car rental company that has a different twist in this business model. You can park your car at a nearby FlightCars lot when you fly out of San Francisco International or Boston's Logan International.

If the car is rented while you're gone, you make some money: $10 per day for a vehicle 2008 or newer, $10 a rental for one 2007 or older.

If the car just sits, owners still get free parking and a complimentary car wash.

"It's been growing pretty rapidly since our launch in February," said FlightCar CEO Rujul Zaparde. "So far we've processed just over 2,200 rentals at both locations."

Kate Prolman, a chef who lives in Boston, recently left her 2013 Ford Explorer with FlightCar when she flew to Ireland for vacation. That saved her $120 on airport parking. And since the car was rented for a few days during that period, she made money on the deal.

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"Free parking and a $50 check, how can you beat that?" she said.

FlightCar renters get some nice freebies: complimentary car seats and GPS units, plus a ride between the airport and the parking lot each way in a town car.

RelayRides announced this week that it has launched a similar airport parking/rental service at SFO. One big difference: it doesn't pay owners if the car is rented. RelayRides said it plans to expand the service across the country in the near future.

Legal speed bump

Car-sharing services don't charge the same fees and taxes airport rental companies are required to charge—which doesn't sit well with everyone.

FlightCar was sued earlier this year after it continued operating and ignored SFO's cease-and-desist letters, according to Skift.com.

SFO wants FlightCar to pay 10 percent of revenue and $20 per rental car—the terms rental car companies that operate at airports meet, Forbes reported. FlightCar currently pays $3.65 to SFO every time it picks up or drops off a client at the airport.

Zaparde told Forbes that his company is "quite different from a traditional rental car business."

The fine print

  • Peer-to-peer car renting is still in its infancy, so vehicle selection is limited. The car might not be new and might not be in pristine condition, but you always know what you're getting.
  • Renters are required to replace the gas they use.
  • RelayRides and FlightCar have 24/7 roadside assistance and provide a $1 million dollar liability policy to cover the owner should that vehicle be damaged.
  • FlightCar provides renters with a $300,000 secondary liability policy. Relay Rides provides state-mandated minimum liability coverage.

Herb Weisbaum is The ConsumerMan. Follow him on Facebook and Twitter or visit The ConsumerMan website.

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