After we shell out $30,000 or $40,000 for a car, it becomes all too easy to forget that our vehicles are often sitting idle for the majority of the day.
“We own too many cars. We park them 22 to 23 hours a day, so there’s a vast amount of underutilization,” Sam Zaid, CEO and founder of online marketplace Getaround, told PYMNTS.
The rise of the sharing economy and the increasing trust and familiarity with marketplace models can help shift away from car ownership — and monetize those idle assets.
Marketplaces, he said, “do really well” in categories where assets are indeed underutilized — Airbnb stands out as prime example. And with the prices of autos touching levels of relative unaffordability not seen in decades, there’s a secular trend not to buy cars — but to share them.
Getaround operates as a “connected carsharing” marketplace, where users leverage the Getaround app to search for local cars, trucks and vans, book them and unlock them (and pay for them) once its time to take them on the road for hours or days. The supply and demand — the hosts offering their vehicles for rent, and the drivers, respectively — never wind up in a face-to-face interaction.
With a nod to that more seamless experience, said Zaid, “you don’t have to meet people. You don’t have manually record things like mileage or fuel. And so you can make money sharing your car in a much more passive way.” One of the key demographics for carsharing tends to skew toward younger people who are go-getters and digital nomads. Jade noted, “You’re looking at millennials and Gen X and Gen Z.”
To date since its 2009 founding the marketplace has attracted more than 1.7 million guests worldwide, with 6 million trips taken in 1,000 cities spanning eight countries.
To ensure that hosts are pricing their cars competitively and maximizing their earnings, the Getaround platform collects real data from cars and use it to inform dynamic pricing and security deposits. “We look at very localized supply,” Zaid said, in a bid to balance supply and demand.
Getaround leverages artificial intelligence (AI) and machine learning to power TrustScore, its model geared toward pricing risk on trips while reducing insurance costs. The company unveiled the latest iteration of the model late last month, and has estimated that insurance and claims costs will be reduced by up to 50% using the next-generation AI system. Verification of drivers’ phone numbers, driver’s licenses, driving record and payment information are all part of the vetting process and by identifying high-risk users and preventing them from using the service, AI can also help reduce the risk of accidents and improve overall safety for all users.
Zaid explained that the company inspects and monitors the condition and health of vehicles, leveraging data to provide safe and reliable vehicles. “We’re really leveraging data to look at the condition and health of the car to make sure that we’re providing quality and safe vehicles. That’s where the vetting and data really helps the vehicle, both upfront and over time.”
Getaround is already providing insurance as part of its package when booking a car, but the company sees an opportunity to enhance driver safety even further through IoT technology and integrations with OEMs. Zaid explained, “We get a lot of data around how people are driving cars, a lot of signals about the car itself. And so that’s an area where we can use AI to really enhance driver safety, to even provide feedback to drivers on potentially how to drive better or drive safer.”
With a nod to the real-time analytics behind the scenes, Zaid noted that “once you hit ‘submit,’ we’re running through all these algorithms, ensuring that you’re a vetted customer on the marketplace, collecting all of the payment information — then we take a commission and pass the rest [of the fees] to the owner who’s providing the car.”
Roughly 25% of people who share their car end up becoming entrepreneurs on the marketplace, building up small fleets of cars — starting a couple and eventually owning and sharing as many as 10 or more vehicles across the platform.
“It becomes what they do full-time,” said Zaid, as some owners can make several thousands of dollars annually per vehicle.
The company recently announced that it would acquire Hyrecar, a gig carsharing marketplace, for about $9.5 million. The transaction, upon closing, is expected to generate an incremental annualized gross booking value of $75 million. The acquisition, he said, adds scale and reach in urban areas, with a broader range of vehicle choice for users.
Ultimately, Getaround’s mission is to empower people to make additional income and unshackle themselves from the burdens of car ownership while also having a positive impact on the environment. Zaid believes that carsharing can reduce the amount of driving people do and promote more efficient use of vehicles, which can have a significant impact on the environment. Beyond Getaround’s typical scenario where consumers opt to book the cars for their own personal use, Getaround also has an integrated partnership in place with Uber, where a driver can rent an Uber-eligible car on the Getaround platform that’s synchronized with the Uber app. Drivers, he said, can start driving for Uber within minutes rather than having to use their own cars.
As he told PYMNTs, the online carsharing marketplace model is one that seeks to “help the world shift to that world of cars are something you access, and they’re not something necessarily everybody has to own … while allowing people to make additional income.”
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