GM Jumps Into Carsharing Lane with RelayRides
The carshare business has long been the interesting little business many in the auto industry consider cute but inconsequential. In fact, when I've brought up companies like Zipcar to auto execs what I've often heard has been, "Come on, that's a niche company in a niche market. It will never be a big deal."
Well, one driver at a time carsharing companies and programs are becoming a big deal.Zipcar went public last year and increasingly the auto companies are striking deals with these companies. The latest is General Motors, which is partnering with the carshare operator RelayRides.
RelayRides is a program in San Francisco and Boston that allows people to rent another persons car (or vice versa) for an hour, several hours, or a whole day. Depending on the type of car you need, how long you'll need it, and how many miles you put on the car.
The carsharing experience could cost as little as $5/hour or as much as $55 per day. It is business model that appeals to people who need a car for just a couple hours, or who own a car, but don't use it for long stretches of time so they are looking to make a few bucks.
Under the new partnership between GM and RelayRides, people who own a Chevrolet, Buick, GMC or Cadillac can immediately make their car eligible for RelayRide rental. Those cars with OnStar will be unlocked through a code sent to the renters cell phone. GM cars that do not have OnStar will have a small device attached to the car if the owners decide they want to be a part of the RelayRides program.
It's too soon to know how big this program will become, but for GM the attraction is increased exposure to people who might otherwise rent another brand.
So why is GM doing this? For the same reason Ford recently announced a deal with Zipcar to have Ford models in the Zipcar University program. It's great exposure to a group of potential buyers. Sure these people are not buying right now, but at some in the future they might and these extended test drives are the best exposure an auto company can hope for.
Carsharing is growing in popularity. Roughly 640,000 people in North America were carsharing in July 2011. By 2016, one firm estimates the number of users will hit 4.4 million. Still think carsharing is a quaint little business?
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