Shelby Clark & RelayRides: Car sharing by and for the people

Nature of Business radio, created and hosted by Chrissy Coughlin, is a weekly show on business and environment.

How about renting your neighbor’s car that you have been admiring for some time now? Better yet, when you do so, you find a plate of chocolate-chip cookies (still warm) waiting for you? Perhaps not the norm but, nevertheless, now a reality thanks to Shelby Clark and his peer-to-peer car-sharing company RelayRides. The first of its kind in the U.S., Shelby talks to me about how he came up with the idea, how it works, the collaborative consumption economy in general, the official launch of their partnership with GM and much more.

A long time Zipcar customer and fan, Shelby was biking to get his Zipcar one freezing cold winter day in Cambridge, Mass. (I can relate to that). Unfortunately the car was more than two miles away, because cars in closer proximity were already rented. Increasingly frustrated that he couldn’t get a car on short notice, he biked past hundreds of cars parked on the street covered in snow and it dawned on him that he might be on to something. Why shouldn’t he be able to drive one of them?

Three-and-a-half years ago he launched RelayRides so he could. By taking advantage of underutilized assets and making it safe to rent cars nearby, Shelby has created a winning formula. It’s pretty simple. People who have a car to rent post their car on the RelayRides site and people who are looking to rent a car get on the site and find a car. Then the keys are exchanged. (Cars typically rent out around $8 an hour but each car owner sets his/her own price.) It’s fast and easy, there is no membership fee and Relay Rides covers the insurance — a big relief (and obviously imperative) for anyone whose car is going to be occupied for a time by a perfect stranger. And now you don’t have to walk just as far to get your car as you would to do your errand!

I asked him how he was convinced that this concept would work and his answer was quite simple. He said,

“It’s a numbers game. Even if 99.9 percent of people out there didn’t want to do it, there was still room for a meaningful marketplace.”

He acknowledges that clearly car sharing is not for everyone. But what is also clear is that this shared economy, perpetuated by the 2008 economic crisis, continues to accelerate, and with all of the environmental, economic, and social benefits, shows no signs of slowing down.

Shelby reports, for instance, that RelayRides car owners can make on average $250 a month. The average person spends $8,000 a year on their car so this is significant income. He also points out that there are 1.2 cars for every person in this country. He and his team want people to think about rounding down rather than rounding up by considering RelayRides rather than go out and buy that second or third car. It may seem counterintuitive that providing access to cars helps the environment but the average shared car actually takes 14 cars off the road. And there is the community aspect of this as well such as providing an affordable car rental option for your neighbors.

And you know that you are onto something if the largest automobile manufacturer in the world decides to play in its own disruption and wants to partner with you. Launching imminently, General Motors and RelayRides will, through innovative technology integration, leverage OnStar-enabled GM vehicles (models from 2005 to present day) to allow RelayRides borrowers to unlock reserved cars with their mobile phones. For cars without OnStar, RelayRides can install a small device to provide borrowers with convenient access to the car. This partnership certainly opens up a whole new community for RelayRides.

Shelby highlights the less obvious fact that for automakers, if you can’t get someone to buy your car, you can at least expose them to your cars so that, down the road, if they do consider a car purchase, your fleet will have a better chance of making their short list. (This happened to Shelby and his Mini Cooper.)

There are now around 30 companies worldwide doing something similar to RelayRides but RelayRides appears to have a leg up in that they are the first to go national and to partner with a major automotive company. It remains to be seen what they market with bear but the numbers tell the story. Today there are 1 million car sharing members in the US and it is projected to rise to over 4 million by 2016. I would say the road for car sharing looks pretty clear ahead.

Enjoy the podcast!

George Papoulias edited this podcast.