Carsharing digital marketplaces also enable owners to rent out their vehicles to customers. But how can owners trust their automobiles to strangers? The following case study, featured in the most recent Payments and the Platform Economy Playbook, provides an in-depth look at how car rental marketplace Getaround got vehicle owners to enroll in — and have faith in — its service.
One of the sharing economy’s most powerful selling points is its promise of financial empowerment. Workers can earn a living or extra money by driving for rideshares like Uber or Lyft, posting their services to gig marketplaces like TaskRabbit or renting out their properties on services like Airbnb and HomeAway.
The sharing economy also features carsharing platforms, which provide vehicle owners with marketplaces through which they can rent out their automobiles. This rapidly growing market is expected to be worth $11 billion by 2024, especially as municipalities push vehicle ownership alternatives to ease congested roadways and help residents save money.
The carsharing model carries risks for vehicle owners, however, who must be able to trust potential renters even though they haven’t met them. This can leave owners wondering whether interested parties are who they claim to be and whether their vehicles will be returned in good condition.
There are many platforms trying to resolve these problems, though, including early carsharing player Getaround, which was founded in 2011 after winning the battlefield competition at TechCrunch’s Disrupt conference. The service allows owners to list their vehicles on its platform, and renters can complete transactions, unlock vehicles and access them via smartphone. The company claims to have more than 200,000 members in the U.S.
Platforms like Getaround must foster trust when onboarding vehicle owners, assuring them that renters are properly vetted and that their automobiles will be in good hands, said John Marshall, the company’s vice president of product and engineering.
“Sharing valuable personal property – like your car – with people nearby is a new concept for many, so we do everything possible to help our owners feel comfortable while they are earning income sharing their vehicles,” Marshall said.
The following case study explores how the company earns vehicle owners’ trust by authenticating those who want to access their automobiles.
For Vehicle Owners, Assurances Come from Insurance
Purchasing vehicles can be costly. In addition to upfront costs, owners must also cover registration, maintenance and insurance.
Maintaining valid insurance policies can be tricky for owners who want to rent out their vehicles. Policyholders are ultimately held responsible for incidents involving their vehicles, and insurance companies could be unwilling to cover claims for accidents involving unauthorized drivers.
Covering these liabilities is crucial for carsharing marketplaces, and providing insurance coverage can reassure vehicle owners that a platform has put adequate safety nets in place. Getaround, for instance, provides an insurance policy for each booking made on its platform. Marshall said the offering is valued at $1 million, includes comprehensive collision and liability coverage and also carries a $1,000-per-incident damage fee for which renters are responsible. Accidents involving classic cars or expensive, exotic vehicles can incur even higher fees.
Understanding Vehicle Renters
Offering such assurances to sellers can, in turn, help carsharing players woo more participants to their platforms. Financial uncertainty is just one of the obstacles carsharing models face, however. For these platforms to be successful, vehicle owners must also be able trust potential renters with their personal property.
Getaround addresses this concern by reviewing renters’ credentials to confirm their identities, ensuring they are legally authorized to drive their requested vehicles and determining whether they can be trusted to pay for the service. The platform is built to automatically verify renters’ identities and their driving eligibility when they log in. As part of its screening process, the company reviews drivers’ DMV records and bars those with extensive violations. The platform can also restrict access to certain vehicles based on renters’ ages. Those who wish to rent Tesla models or other “specialty” vehicles, for instance, must be at least 25 years old.
Getaround also works to build profiles that ensure renters are who they claim to be. Its review process relies on 16 points of reference – including social media scans – to confirm the renters’ identities, and Marshall said these measures are critical to winning trust.
The company’s automated review process also ensures renters can make authorized payments for vehicles listed on the platform by assessing their credit histories, and Marshall added that it protects owners from financial fraud by assuming responsibility for payments. With such safeguards in place, he said, vehicle owners and renters don’t even have to exchange keys, let alone meet in person, to ensure smooth and safe transactions.
“We’ve long emphasized the need for automated verification to remove that friction while maintaining a safe and secure marketplace,” he said.
Removing frictions and providing safeguards are key to establishing trust on all sharing platforms. By catering to customers’ desires for smooth and secure interactions, sharing economy players can win more members and keep their current ones satisfied.
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