Sharing is caring: Onstar to let GM owners rent out their cars

Sharing is caring. Onstar will soon allow GM car owners to rent their cars out via a new startup called Relay Rides, a company that connects private parties who want to rent out their cars for a few hours at a time to short-term drivers in need of wheels.

Carlos Osorio/AP
The General Motors OnStar command center is shown in Detroit, in this February 2006 file photo. The OnStar automobile communication service maintains its two-way connection with a customer even after the service is discontinued. Onstar will soon allow GM car owners to rent their cars out via a new startup company called Relay Rides.

One way to drive greener is to use fewer cars more efficiently.

The average car sits stationary for 23 hours a day; surely if it were used more, we would need fewer cars overall?

That's the idea behind Relay Rides, a startup company that connects private parties who want to rent out their cars for a few hours at a time to short-term drivers in need of wheels.

GM Ventures, the venture investing arm of General Motors, bought a share of Relay Rides last October--and now the other shoe has dropped.

GM announced yesterday that it would soon let owners of its Onstar equipped vehicles rent them out through Relay Rides.

And using Onstar's remote unlocking feature, owners no longer need to deliver their keys to the renter in person. Instead, Onstar makes it possible for those renters to unlock the car using a smartphone app or by replying to a text message.

The announcement adds 6 million current Onstar users to the pool of potential renters, with an additional 9 million who have Onstar in cars dating back to 2005 but aren't paying the monthly subscription fees to keep the service active.

After launching in Boston in June 2010, Relay Rides went national earlier this year. With the Onstar announcement, it clearly hopes to take a pre-eminent position among the handful of similar car-sharing startups.

And the benefit to General Motors is that its newest, best-equipped vehicles may be exposed to the kind of younger, more tech-savvy users likely to experiment with a service like Relay Rides--a kind of experiential marketing, in a way.

insurance covered

Such services, generally known as "peer-to-peer car sharing," require some changes in state insurance laws--which California has already adopted.

The service has its own insurance policy, which covers renters and owners during the time the car is being rented out.

This neatly deals with the lack of coverage in states where insurers specifically say they won't cover a privately owned vehicle if it is being rented out.

The new coverage protects the owner against lawsuits for injuries and property damage while the car is being rented. RelayRides will also cover any “Comprehensive” (theft, vandalism, fire, flood) and “Collision” losses that may occur during the rental.

Owners who rent out their cars receive 60 percent of all fees collected from the renters, with Relay Rides keeping the rest.

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