Wed, Mar 14, 2018 - Page 10 News List

GM reportedly planning peer-to-peer service for individuals to share cars

Bloomberg

General Motors Co (GM) plans to start a pilot program this summer that would enable car owners to rent out their vehicles when they are not using them, people familiar with the matter said.

The tests are to begin in early summer through GM’s Maven car-sharing unit, said the people, who asked not to be identified, because the plans are not public.

GM vehicle owners would be able to put their cars on Maven’s platform for other drivers to rent and share the revenue with the automaker.

The pilot program — which GM will try to grow into a full-fledged business if it is successful — could mark another step forward in GM’s transition from manufacturer to mobility provider.

After GM’s stock stagnated for years as investors fretted over peaking car sales and Silicon Valley’s offensive on the auto industry, the shares rose to a record high in October last year as its self-driving car plans and services like Maven gained traction with investors.

A spokesman for Detroit, Michigan-based GM declined to comment.

Maven already rents vehicles to individual drivers, including customers looking for short-term wheels, as they have through services such as Zipcar. Maven Gig also lends cars to drivers working for companies, including Uber Technologies Inc, Lyft Inc and food delivery businesses.

Up to this point, GM has owned those cars. By launching a peer-to-peer service, Maven would get access to more vehicles without its parent having to carry more hard assets on its balance sheet.

Other companies already do with cars what Airbnb Inc has done for real estate: allow drivers to lend out their vehicles to defray the cost of ownership or make extra income.

Start-ups Turo and Getaround are two bigger names in the space, although GM dwarfs both upstarts with its market value of almost US$53 billion.

While peer-to-peer car sharing is a relatively new, niche business, the number of people signed up on Turo’s site has grown fivefold to almost 5 million and its car listings have tripled to 200,000 in the past two years.

The firm raised US$92 million in a funding round in September last year led by Germany’s Daimler AG and South Korea’s SK Holdings Co, which valued Turo at about US$700 million.

Getaround raised US$45 million in April last year, with Toyota Motor Corp among the companies buying in.

Peer-to-peer businesses could make more sense than car-sharing services that require owning and maintaining vehicles, said Alexandre Marian, a director in the automotive and industrial practice at consultancy AlixPartners LLP.

Automakers can make this model work, because they have huge networks of vehicle owners, he said.

“Carmakers are preparing for disruption, so they are experimenting with different models,” Marian said by telephone.

Tesla Inc has hinted at a peer-to-peer sharing network, although the vision CEO Elon Musk laid out in July 2016 alludes to a service using fully self-driving cars.

“You will also be able to add your car to the Tesla shared fleet just by tapping a button on the Tesla phone app and have it generate income for you while you’re at work or on vacation, significantly offsetting and at times potentially exceeding the monthly loan or lease cost,” Musk wrote at the time. “This dramatically lowers the true cost of ownership to the point where almost anyone could own a Tesla.”

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