General Motors (GM) is rolling out a pilot program that will allow car owners to rent out their vehicles when they are not using them, similar to the AirBnB real estate program. Testing will begin this summer through a car-sharing unit named “Maven”. Owners of GM vehicles will be able to put their cars on the Maven platform, enabling other drivers to rent their automobile.
If the pilot goes well, GM hopes to grow the program into a fully developed business, thus marking GM’s transition from manufacturer to mobile vehicle provider. GM is hoping that the fledgling Maven program, along with self-driving car plans and other innovations will help to revive the company. GM’s stock has stagnated for years due to peaking car sales and Silicon Valley’s offensive in the auto industry.
Currently, GM’s Maven unit already rents vehicles to individual drivers, including customers looking for short-term rentals such as through services like Zipcar. The current cost is $8 per hour (plus tax). Another innovative GM program, Maven Gig, lends vehicles to drivers who drive for services like Uber, Lyft and other delivery-type businesses. The vehicles rented out through these programs are owned by GM. But by opening the program up to become a peer-to-peer service, GM would be able to offer more vehicles without having to carry more hard assets on its balance sheet.
GM is not the first company to allow car owners to rent out their vehicles to help meet the cost of the vehicle or earn extra income. Two of the larger names in the space are startups like Getaround or Turo. While peer-to-peer automobile rental services are relatively new, the niche business has grown fivefold in the last two years. Large investors, like Toyota Motor Corp., have taken notice and are investing in these types of companies.
One of the advantages of moving towards a peer-to-peer business model, as opposed to a manufacturer-to-consumer rental, are the costs involved in owning and maintaining the vehicles. Carmakers are in a unique position to make this new model work because they have networks of vehicle owners they can access. Automobile manufacturers are well aware that the industry is ripe for disruption, so they are experimenting with these types of new business models.
The new business model is not without challenges, however. For example, The American Care Rental Association is pushing lawmakers to eliminate tax loopholes that car-sharing companies have avoided but members have to pay. Furthermore, auto rental companies are seeking to ban ride-sharing businesses out of airports. Maven has recently announced expansions into two major cities, Austin, Texas and Toronto.
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