How peer-to-peer carsharing services are disrupting the rental car industry

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Growing problems in the rental car industry can mean great things for the sharing economy

Many travelers over the past few months have realized how difficult the renting a car has gotten. Everything from low supplies and outrageous prices has made car renting feel almost impossible. While it may seem as if this problem came out of nowhere, most of the issues can be tied to the pandemic and the War in Ukraine.

However, unlike many pandemic-related supply chain issues, this one does not seem like it will die down anytime soon, and, in fact, it may transform the rental car industry forever. Because car companies in general are opting to produce less vehicles, this could mean permanently higher prices and completely different car supplies than before the pandemic.

In the past two years, the average daily car rental price has skyrocketed from around $46 to $81.

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Consumers are not the only ones feeling the pain from this shift; the rental car companies have faced staggering losses themselves. In 2020, Avis lost almost two-thirds of its airport rental business, and Hertz revenue dropped 46% before they were forced to file for bankruptcy. Companies were forced to sell their cars to recoup some of their losses, with Hertz going from a fleet of 700,000 cars globally in 2020 down to 481,000 cars in early 2022.

While some consumers have opted to try their luck and schedule car rentals earlier for possibly lower rates, others have flocked to peer-to-peer car rental services, which are like “Airbnb for cars.”

Peer-to-peer carsharing services allow consumers to book cars from people willing to part with their car for any amount of time. It can be for something as quick as a grocery trip or an entire vacation, which is similar to how people rent from airport vendors. Companies like Getaround and Turo have made waves in this space due to their easy user interfaces and options for cars.

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People have also praised peer-to-peer carsharing companies for their possible environmental benefits, due to fewer cars be needed for people to complete their goals.

However, peer-to-peer carsharing companies have hit their share of snags too, particularly in regards to insurance. New York state has outlawed them due to the liability the owner has over the renters actions. Other states have opted to embrace peer-to-peer car sharing by passing legislation that allows people to share cars without losing insurance, most notably California, where many of these startups are based.