How Technology and Trust Change the Car Rental Industry

From last week:

In watching the video below, which was one of our reading assignment last week. The speaker Rachel Botsman discussed several great businesses and platforms that based on trust and technology. This makes me keep thinking about an instant car rental platform called Getaround. This company’s business model is also based on people’s trust and technology.


The traditional way

Many of us probably have some experience of renting a car, there are many traditional car rental companies like Enterprise, Sixt, Hertz, and U-Haul. I personally have rent a car with all of the companies listed above. These car rental businesses usually require an appointment before picking up the car, and when the customers come for their cars, the agent will first ask you some personal information, then recommend the insurance, explain the payment, do some paperwork and finally hand you the key. The process of renting a car in this traditional way has some disadvantages. First, most of these companies rent their cars on a daily basis, so if you want to rent a car for only 3 hours, they still charge you as you have rent a full day. Second, because some agents don’t want you to choose cars, there are not many car options. Last but not least, the traditional way of renting cars is very time-consuming and inconvenient for customers.



Getaround & How it works?

Getaround launched to the public in May 2011, the company currently operates rentals in Boston, Chicago, New Jersey, Portland, and San Francisco. Getaround uses the economic principle of collaborative consumption, which you can use others car when they aren’t using it, or you can rent your car to strangers while you’re stuck at work. It has a mobile App, which makes car rental extremely easy.

The app will ask for your payment card and your driver license in the first place, and you will be ready to rent. When you need a car,  you just use its App and search the cars nearby. There are many different cars available. You can choose your favorite one or just pick one that is close to you. Compare to the traditional car rental method, you don’t have to go to a specific store and fill different paperwork with the agent. This saves you a lot of time. Besides, Getaround’s fee is more reasonable and on an hourly basis. If you want a car to go for a 2.5-hours shopping in Costco, you only have to pay for the 2.5 hours.

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The traditional car rental requires the agent to hand you the car key in person. This step is also time-consuming and there is the possibility which the customer might lose the keys. However, this is not a problem in Getaround. When you find your reserved car, you don’t have to meet the owner and pick up the keys. The Getaround CarKit key allows you to unlock/ lock the car from your App, so basically, your smartphone or smartwatch will be the car key during your rental time. There are also many useful features in the app, for example, if you feel you need extra time, you can request to extend the ride. download.png

The owner and the renter don’t have to worry anything, because Getaround itself provides insurance for every renter. Compare to Enterprise and Sixt, the insurance is not included in the final price, but the agent will highly recommend you to buy one, incurring extra cost.

Once the car is returned, the owner leaves the renter a review, so the community knows whether the renter is good or not. The renter also can leave a feedback on the car, so the other drivers know the condition of the car. This review function just works as Airbnb and Uber, where every user has access to the reviews, and this helps the users to trust others on the platform. Getaround also has the driver license from every renter so the car-owners will feel comfortable to give their cars to strangers because car-owners trust the platform itself.

In Airbnb, people rent out the house or room they don’t use. In Getaround, people rent out the cars they don’t use. It’s interesting that the idea behind these two platforms are similar and both based on one important element —— trust.


I personally have never used the App, but I think I will definitely give it a try someday, I do think the platform benefits both the car-owner and the renter. The owner can just make extra income without putting any effort. The App also makes the renter’s life easier. I think the trust shifting in the digital age creates a lot of unknown potentials and opportunities. Companies like Airbnb, Uber, and Getaround did well in capitalizing this trust shift. What other businesses or platforms do you think have capitalized such trust?





  1. NeroC1337 · ·

    This is an interesting rental-car business model, creating a user cycle very much lie Uber and Lyft that more drivers would attract more users to use the apps, and more users the more profitable the drivers could earn and thus more people would sign up for drivers. I think Getaround could have a greater future than Zipcar in the rental-car business, just because the company is not putting down fix-cost to buy new rental cars, finding parking spot. However, I’m really interested in how the company is doing compare to the competitors. Because once the snowball starts to rolling the business could be big; but the first step to let people trust the idea, using the app, start rolling the snowball is the hardest. Despite of the fact that I haven’t used it neither, the company should have a significant amount of the market share considering it started in 2011. Love to hear more about Getaround.

  2. Jobabes121 · ·

    Wow… great post, and although this business model is no different than Airbnb’s, for some reason this still makes me hesitant in actually participating in the app usage. As @neroc1337 pointed out, it has been out for a while (since 2011), and I wonder if its phase of “growth” has already diminished quite a bit, given that a startup’s typical lifetime goes on for about 5 years until exit. It either lacks marketing strategies or have not yet convinced customers to use its service, which is probably why many of us may have not heard of it yet.

    My biggest concern is that since many put valuable items in their cars (let’s say, jewelry or even car insurance documents), I wonder if people are willing to make the car spaces empty and allow a complete stranger to drive the cars. There can be a serious theft issue, and it should require a very, very detailed and thorough background check of the renters specifically until they can qualify as the members of Getaround. Also, since drivers’ state can play such a large role in the car operations, any drunk or absent-minded renters may completely destroy the car. In that case, I doubt the insurance policy will cover the whole cost. Since driving involves so many risks outside of the normal trust between a renter and car owner, I doubt this business model would thrive as much as Airbnb would (which is apparent with its past 7 year performance).

  3. Molly Pighini · ·

    Very interesting post, Henry. It seems only natural the “Airbnb” model would find its way to cars as well. I agree with both comments above. The company will only succeed if it starts to see real network effects with more users attracting other users. I also agree that it could be difficult to establish significant trust as driving does seem to have more associated risks than simply living in/occupying a home. In time, however, I think there could be a largescale application of this idea. It seems inefficient and unnecessarily expensive for us to continue buying and using cars in the way we do today. Many people work all day, leaving their cars unused for many hours. Other people work from home or live in walking communities where they only need the use of a car occasionally or on weekends. I could foresee a day where people don’t buy personal vehicles, but car companies run a service similar to Getaround, allowing people to use cars for a period of time, simply by paying a fee. The cars could be spread out in communities similar to what we’re seeing with Bird Scooters or Lemon Bikes.

  4. katherinekorol · ·

    This is a cool concept and although similar to Uber and Lyft, I think it has its own benefits that they don’t have. While Uber and Lyft are practical for getting from point A to point B, Getaround provides users the opportunity to have access to a car for hours in order to run errands or make a day trip. Like Molly said, I could see a time where people don’t buy cars because its too costly and complicated. I also visualize it kind of like the bike share programs, where cars would be parked at a location and you pay a fee for however many hours, then return it to another parking location.
    I’m not sure if I would rent out my own car for this service, but I could see myself using it to borrow other people’s cars. I’d be curious to know what the implications of this are if the renter gets a ticket and is caught driving a car under someone else’s name. I’m sure there is some insurance aspect that the app has to deal with. Theres definitely a lot of risks that come with this but I think they could easily be ironed out after a few years of testing and tweaking.

  5. murphycobc · ·

    This is interesting to me and definitely centers a lot around trust. Like, you have to trust whoever is picking up your car is a good driver, and is safe. Imagine your license plate picking up a ticket for running a red light. You would have to go through a lot of hassle to prove it wasn’t you, have the user pay for the ticket, and get it off your record. The question for me would be, is that all worth it for a small stream of cash?

    As well, Henry mentioned leaving valuables in the car. I do’nt have much, but if my car registration went missing, or my beach chair in the back (Always need to be ready for a quick trip!) I would be pretty annoyed. The same must ring true for AirBNB, certain items missing after a stay, but it would be top of mind for me.

  6. markdimeglio · ·

    This is a cool post. I have heard of Getaround before but I have not really looked into what they do. I feel like this a great example of how user trust can transform people’s behavior. I never thought that people would be so willing to actually lend their property to people they don’t know. And not just a small item like a lamp or something but a $20,000+ automobile. Im sure the insurance part of it helps a ton but also the company’s efforts to promote user trust seems to have had pretty awesome effects.

    The company started in 2011 and I wonder how many total users they have. I also wonder if they will be able to expand going forward and challenge other ride-sharing platforms like Uber and Left.

  7. Interesting. I heard about the rental car site, which is based on the Airbnb principle and even registered there, but has not yet used its services.

  8. kseniapekhtere1 · ·

    That’s a great post. I have heard about the concept before but I never knew of a specific app that provides this service. I think it totally makes sense that similar to homes people can share cars to make/save money. Personally, I can see myself renting a car from someone through Getaround but I feel reluctant to let some stranger to drive my car even if it’s for couple of hours. However, couple of years ago I would probably feel uncomfortable letting a stranger into my house through Airbnb and now I don’t think it’s that big of a deal. I agree with previous comments that Getaround would benefit from network growth. I also wonder how it is priced relatively to Zipcar. Zipcar provides similar hourly rentals and has lots of stations around the city. And personally I feel that it is safer to rent from Zipcar than some stranger because I think that Zipcar cars go through more regular maintenance. That’s why I wonder how Getaround differentiates itself from Zipcar and other car sharing services.

  9. kennedy__bc · ·

    I’m interested to learn about who fronts the cost to install the remote access to the vehicle via the app and if customers using the car have to return the car to the exact same location as it was found. My first concern is just regarding the initial cost of installation, I had a remote control engine started installed in my car at home and it was fairly expensive and also fails to work at random times. It will be interesting to see if Getaround fronts these costs for the renter or pushes it onto them in hopes of saving costs. Secondly, if I were to rent my car out saying in a city to an individual parking can be a nightmare places such as Boston and I would hate to have to walk several blocks in hopes of finding my car using GPS tracking. From what I have read about other apps GPS locating is that it can be extremely laggy and misguided. If Getaround can avoid faulty GPS locating renters will be more willing to take the risks associated with lending their car to strangers and avoid the displeasure that comes with walking aimlessly around looking for your vehicle.

  10. Interesting company. Thanks for bringing it to our attention!

  11. DingnanZhou · ·

    Great post! You did a pretty good job explaining the company and its business model. I knew a “airbnb” type of car rental company called Turo, where you can rent cars from strangers. I think this company Getaround just took the business to another level – everything is just so smooth without a middleman! As we discussed, sharing economy is built on trust so that more idle resources can be fully utilized. @kennedybc brought good concerns for GPS settings. I was intrigued to see how company will resolve this issue and grow in the future!

  12. Wow really great content and insight…

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