RelayRides: Rent Your Own Car to Others by Smartphone

Aug. 13, 2012— -- Renting a car can be a hassle -- you have to search online for the best deal, trek across town to pick it up and bring it back with a full tank of gas. There's got to be an easier way, right?

Now there's RelayRides, a peer-to-peer car sharing service that allows car owners to rent out their vehicles by the hour or day and set their own rates. The service first launched in Boston and became available nationwide in March.

Those in need of a car simply go online and search listings in their local area. In New York City, we found 56 cars available within 5 miles of ABC's offices, some for as little as $8 an hour.

Even though the company takes a 40 percent cut of the rental price, founder Shelby Clark says it's a great way for car owners to make some extra money.

"It's not uncommon to make over $1,000 a month. So you can get your car payment, insurance, gas, everything paid for. At the same time, you're helping out a neighbor."

While the idea of fast cash may leave you with dollar signs in your eyes, Clark says the actual average profit is closer to 250 dollars per month for car owners.

Nervous about loaning out your ride? Before potential car renters can hit the road, their driving records must be screened and approved. RelayRides also insures every transaction with a $1 million liability insurance policy that covers any physical damage up to the actual cash value of the vehicle.

"It's our insurance policy that's on the hook, not yours," said Clark. Renters, meanwhile, are covered by a $300,000 policy and provided 24-hour roadside assistance.

Both car owners and renters can review each other online through a peer-to-peer rating system, which also incorporates social media elements via Facebook, allowing both parties to see if they have any friends in common.

If you're the type who's usually searching for your keys, RelayRides' latest solution has you covered. The company has partnered with General Motors and OnStar to allow users to unlock registered OnStar vehicles via smartphone.

"It's pretty wild. You press a button on your phone, and the car unlocks," said Clark. Users without a smartphone can unlock enabled cars by responding to a text message sent from the vehicle.

Drivers who rent OnStar vehicles have access to the same services that OnStar subscribers do, which include automatic crash response, in-vehicle security and navigation services. OnStar-enabled brands include Chevrolet, Buick, GMC, and Cadillac models.

Nick Pudar, a vice president at OnStar, said, "We're really leveraging the technology that OnStar's been using for many years, now in a very unique way."

For city dwellers without a car, RelayRides appears to be a viable alternative for the times when an hourly car rental is necessary or a last-minute weekend trip beckons. It is reminiscent of the car-sharing service Zipcar, which supplies its own fleet of cars at set locations, but Clark says RelayRides is differentiated by its elements of community building via one-on-one transactions.

"The concept of borrowing sugar from a neighbor has sort of been lost, so we're helping to connect people and sort of re-create a community," he said.