Call it the “sharing economy.” Or call it the easiest way ever to start your own car rental company. Whatever you call it, a new company that will allow South Floridians to rent — or rent out — their own cars for a few hours at a time is about to debut here.
CarHopper.co, the newest entry in what’s known as the peer-to-peer car rental business, is beta-testing its software and plans the grand opening of its digital doors early next month.
“Think of us like the eBay of car rentals,” explains Bora Hamamcioglu, the founder and CEO of CarHopper. “eBay doesn’t own any inventory; it matches people who want to sell things to people who want to buy them. CarHopper doesn’t own a fleet of cars, we match people who have a car to people who want to rent it.”
CarHopper, which will use an app available for Apple iOS as well as Android devices in mid-May, could also be compared to Airbnb, which allows people to rent out their homes to tourists and business travelers, or Fon, which exchanges wireless access among travelers. They’re all part of what’s becoming known as the sharing economy, in which people rent anything from beds to boats to one another via the Internet.
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South Florida has already had access to peer-to-peer car rentals for three years, since the nationwide launch of RelayRides.com, which is available in 2,500 cities across the United States. “We don’t break out our business by regions, but I can tell you that Miami is one of our top markets,” says Steve Webb, head of community for the San Francisco-based company.
The big difference between the two companies: CarHopper allows rentals of as little as an hour in length, attractive to customers without a car who need to go shopping, run a few errands, or impress a date with a $115,000 Ferrari sports car.
Does it seem unlikely that somebody who owns a $115,000 Ferrari would be renting it out? Think again, says Hamamcioglu. “This is a way for people to amortize a very expensive piece of equipment that spends most of every day just sitting around in a driveway,” he says. “In our preliminary sign-up of potential customers, we actually had more people interested in offering their vehicles than people who needed rides.”
Here’s how CarHopper works:
Somebody with a vehicle to rent registers it online with the company, complete with photos and a listing of special features like GPS or satellite radio as well as the car’s availability — say, every night from 8 to midnight, or weekends only. The renter also specifies his price — per hour, per day or per month. (CarHopper will collect 20 percent of the fee as a commission.) And the owner can attach conditions to use — for instance, a mileage limit.
Meanwhile, somebody who wants to rent starts checking lists of available cars, which can be filtered by price, location or features. The prospective renter must supply a credit car number and driver’s license information, which is verified by a company in San Francisco.
“The drivers must have no major violations in the past three to five years — we’re still working that out with the insurance company — and no DUIs, ever,” says Hamamcioglu. (CarHopper has a $1 million insurance policy protecting the vehicle owner against anything that might happen to the car.)
After that, it’s simply a matter of the renter picking out a car and the owner agreeing. They meet face to face for an inspection of the car and to turn over the keys.
Hamamcioglu says it’s hard to predict prices in advance, because they’ll be set by owners. But prices at other peer-to-peer car rentals have generally been about 30 percent less than those at conventional companies. And Getaround.com, a peer-to-peer company serving San Francisco and Portland, Oregon, offers cars for as little as $5 an hour.
“I think we’ll be in that same range,” Hamamcioglu says. “Of course, the price depends on the car. You aren’t going to get a BMW for $5 an hour. But a Smart car could certainly rent for that.”
Once CarHopper is up and has been running for a while, both owner and renter will be able to see how they’ve been rated by partners in previous transactions. “An owner who takes too long to respond to an offer to rent is going to get a poor rating for that,” Hamamcioglu says. “And a driver who keeps the car too long, or returns it with trash on the floor, is going to find it difficult to rent again.”
The idea of handing your car over to a stranger may sound strange at first, but officials at other peer-to-peer car rental companies say it passes quickly.
“People have been doing home-sharing forever, even before Airbnb came along,” says Meg Murray, head of community at Getaround.com. “And a car is much less personal than a home. Once you start actually doing it, it makes perfect sense.”
Hamamcioglu, 26, is a former venture capitalist (“I decided I didn’t fit very well into a 9-to-5 job”), born in Turkey, educated at Georgetown University, and now a U.S. citizen living in Brickell. He plans to expand CarHopper out of the Dade-Broward-Palm Beach area to the rest of Florida within a few months and to two or three neighboring states by the end of the year.