Car Sharing – What is it?

06 Aug Car Sharing – What is it?

Car sharing is a new concept whereby a person can use their smartphone to rent someone else’s car.  It is the same concept as renting someone’s property on Airbnb.  The renter can use peer to peer car sharing for hours or days, depending on need.  GM’s car sharing application Maven allows individuals to rent out qualified GM cars.  To be approved for the program, a car is inspected and outfitted with the proper technology.  The car sharing program already launched in Chicago, Detroit and Ann Arbor with more cities to be added.  Other companies like Turo and Getaround also offer car sharing services.

Similar to Uber, peer to peer car sharing poses significant liability and privacy issues.  From a liability standpoint, if a renter gets into an accident, GM is supposed to offer up to a million dollars in coverage since the vehicle is used in a commercial setting.  However, the rental agreement states Maven liability insurance only provides coverage up to the state minimum, which varies state by state.  In Missouri and Illinois, the state minimum is $25,000 per person and $50,000 per accident.  Additionally, the renter is typically required to have their own automobile insurance under their state’s financial responsibility law.  A driver cannot operate a motor vehicle without their own insurance, even if the owner of the vehicle has automobile insurance of their own.  The conflicts in coverage and the potential lack of insurance by the renter of the program could pose several issues for all parties involved.

Another issue that arises with car sharing is the lack of privacy.  Similar to most applications used on phones, the rental agreement for Maven’s program explicitly states it will be collecting, using and storing data obtained during the car sharing experience.  For the owner, it includes all the personal information associated with ownership of the car.  For the renter, it includes your personal information and a consent for Maven to conduct a background check to determine eligibility.

While the concept of car sharing could ultimately benefit both the owner of the vehicle (by monetizing an idle asset) and a renter, this program will inevitably undergo numerous changes as legal and privacy issues arise.