The Car Sharing Economy Is On The Rise: A Conversation With RelayRides

RelayRides Car Sharing

The car sharing economy is now everywhere. I originally published this post in 2013 and am now updating it in 2021.

It hit me the other day that I've been sitting on a goldmine of wealth and knowledge living here in San Francisco, the startup capital of the world. As a 12 year resident of the city with an entrepreneurial bug, a desire to meet more interesting people, and a personal finance blog with a yearly readership in the millions, what a great opportunity to meet up with some of the promising new companies of our generation and bring their stories to all of you. I plan on profiling at least one new startup a quarter in an assortment of industries. I hope you enjoy the new series!

For most people, your car is usually your first or second most valuable asset, and it’s also one of the fastest depreciating assets. Long time readers know that I don't recommend anybody spend more than 1/10th of their gross income on a car if they want to build financial wealth.

Not only do you have to pay ongoing operating and maintenance costs, you've also got insurance costs that could easily total in the thousands of dollars a year. With the average car sitting idle 92% of the time, most folks are flushing money down the toilet with cars they don't need.

The multiple financial meltdowns over the past 10 years have created a shift in consumer's attitudes towards ownership. I think consumers are wisening up to the fact that tying up a lot of capital to own a car when good jobs are hard to come by is foolish. Millions of car owners with uncomfortable car payments that last long after the initial euphoria of ownership wears off are wondering how to mitigate costs.

RelayRides is trying to make these economics more favorable for their car owners by allowing them to turn this idle, depreciating asset into a source of income. For car renters who want to preserve their capital, but still want the flexibility of having a car for 20-40% cheaper than renting from a large agency like Avis or Hertz, RelayRides wants to help you as well.


Andrew Mok, Marketing and Andre Haddad, CEO
Andrew Mok, Marketing and Andre Haddad, CEO

FS: As a hater of traffic and a proponent for a cleaner environment, I love the proclamation that by renting out your car on RelayRides, you help take on average 14 cars off the road. How did you come up with this figure? It makes a lot of sense.

RR: Susan Shaheen at UC Berkeley found in her study that one shared car takes 14 cars off the road on average.

FS: How does RelayRides make money? Does the money get debited from the renter or the car owner?

RR: The owner keeps 75% of the reservation cost and RR takes 25%, and we also charge a 10% rental fee to the renter.

FS: How large is the current RelayRides community? If you can break it down by owners and renters that would be great.

RR: I can’t specify the exact numbers, but we have several thousand cars being rented by tens of thousands of renters. We’re in all 50 states and in over 1300 cities.

FS: I imagine that certain areas are more popular for car sharing than others. As a car owner, which areas have received the most rental activity?

RR: It helps to be in an urban setting with higher population density, but we’ve seen that the vehicles that get the most rental activity are the ones where the owner is the most engaged. That means putting up a couple good photos of the car, pricing their vehicle reasonably, and responding to all of their requests (we display response rate on the car page and it goes into our search filtering algorithm). Also, some owners who are doing a great job self-marketing have found ways building their own renter base in areas that aren’t as densely populated – like Honolulu Hauler and the Green Machine in Tempe, AZ.

FS: What is the average price that a car owner rent outs his/her vehicle? Are there price differentials for car age, original purchase price, and condition?

RR: The average total price of renting out a vehicle is $50/day (with insurance, $40/day without insurance). We have recommended prices for our car owners based on year, make, & model based on our analysis of rental demand, but the owners can set whatever price they want.

FS: What were the roadblocks you faced when dealing with insurance companies covering RelayRides renters and owners?

RR: We’ve worked really hard to get it right and find the proper protections for our members. It’s really the foundation of trust in our marketplace. Under our insurance coverage, all of our members, both renter and owner are covered during each rental. Owners are covered up to $1M for liability and 100% physical damage coverage for their car, and renters can choose which insurance package they’d like to have when they check-out.  

FS: What is the most popular types of cars that RelayRides rents?

RR: BMW 3 series, Honda Civic, Toyota Prius are our top vehicles – but the great thing about our marketplace is we have a wide variety of cars. We have cars like a Ford Model T bucket and a car that runs on veggie oil. In fact, we have over 500 make/model combinations in our marketplace. We are the only nation-wide peer-to-peer car sharing company in over 1300 cities and all 50 states, and we see ourselves as the Airbnb or Ebay for car rentals.

FS: What would be the most profitable car a potential RelayRide owner should own?

RR: We’ve found the most successful car owners are the ones who price their car appropriately, always respond to requests and communicate with their renters, and self-market aggressively.

FS: How often can owners raise or lower their prices?

RR: Our owners have complete control – they set availability, pricing, and decide who to rent to.

FS: How do you make sure you’re only letting “good” renters use my car?

RR: We only allow safe drivers in our marketplace – drivers who have had NO major violations and a maximum of two minor violations in the past 3 years. We also do credit card screening. Another great part of the marketplace is the two-sided rating and reputation system. After every trip, the renter can rate the owner and the owner can rate the renter, so you’ll get to see what other people have said about your potential renter.

Also, if the renter connects their account with Facebook, you can see if you have any friends in common. Remember, the owner always gets to decide who they want to rent to. So far, our transactions have gone very smoothly. The average vehicle rating is 4.8 out of 5 stars, and out of all of our transactions, 99% of the time the owner has said they would rent to the renter again.

FS: How much do your owners make on average? How much have your top earners made?

RR: We’re very excited about how successful our car owners have been in turning their idle cars into extra income. The average active owner is making $200-250/mo, with our top owners making well over 1k a month. There are so many great stories about how RelayRides has helped its customers: from a single mom who couldn’t justify buying a car in SF until she learned about RelayRides, to a guy that lives near the DC airport who bought another car just to list it on RR because the first car he listed was so successful, and another in Chicago who is building a fleet of 5 cars. We’re very excited about how successful our car owners have been in turning their idle cars into extra income.


There are over 250 million cars in the US and a billion cars worldwide. Eventually, something has to give unless we all want to live with LA-style traffic. Besides putting more income in owners and renter's pockets, I'm very excited about the environmental impact RelayRides can have. Unless you're destroying your old car when buying something new, even buying a hybrid is worse than just owning an old SUV. If RelayRides can grow its market place big enough, it's quite a possibility that RelayRides can grow into the next $1 billion dollar company.


Earn Up To A $300 Bonus By Driving With Uber. Driving for Uber is a great way to make extra money when you want. I average $33/hour, and 20 hours a week. An extra $2,400+ a month in my pocket is fantastic spending money while having zero boss. Uber is giving up to a $300 bonus after giving your 20th ride for signing up. Sign up to be a driver today and work when you want if you want to make some extra cash.

Lower Your Auto Insurance Costs: Check out Esurance online. They have some of the best plans with the lowest rates around due to their lower overhead costs. It's worth spending a moment filling out a quote to see if you can save some money. Car insurance is one of the largest ongoing expenses for car owners. Esurance has good driver discounts, and multi-product discounts as well.

Updated for 2020 and beyond. RelayRides got sold in 2016! Uber and Lyft went public in 2019. Ridesharing is bigger than ever, but the industry is not profitable.

Related: Why I'll Never Drive For Uber Again

13 thoughts on “The Car Sharing Economy Is On The Rise: A Conversation With RelayRides”

  1. James Shaffer

    Relayrides and its competitors are a method to free up urban space from the waste of rarely-used cars being parked on the street.

    I’ve used Relayrides, Zipcar, and standard rental places. Relayrides is the cheapest, easiest, most neighborly and, most importantly, takes up the least amount of urban space.

  2. I put my car on RelayRides last year after a change in employment circumstances left me with a reduced need to drive. One of my renters ended up driving my car over a pothole so deep it blew out my front right tire. While the renter ended up replacing the tire at his own expense, it was later discovered that my vehicle suffered damage to the suspension as a result of the incident. All attempts to be reimbursed from RelayRides have failed, despite their “$1 million insurance guarantee”. The amount I would spend on repairs was more than 4 times the amount I made in rental fees over those couple of months.

    Caveat emptor!

    1. Hey Dave – sorry to hear about your bad experience. I’d love to follow-up for you to understand what went wrong. Feel free to send me an email at andrew [at] relayrides [dot] com and I’d be happy to dig in. Our $1m insurance guarantee is meant to completely cover the owner during a RelayRides trip.

  3. The First Million is the Hardest

    It’s an interesting concept, I’ve been hearing more and more about car sharing services popping up in this area too. I’m not sure if they work on the same P2P type of platform though.

    If I didn’t have a car I’d definitely use a car share to get around the city, its got to be way better than most public transportation. However, even with the insurance etc… I think I’d be leery of renting my car out to strangers like this.

  4. I agree completely. I just went to the dealership the other day and left with a $500 bill, talk about sick to my stomach and I drive a 2003 Honda Civic. I love this concept, wish I had thought of it myself. Can’t wait to see the success it has in the years to come.

  5. This makes so much sense! It is the next step after Zipcar. No inventory costs, instead a commission and the owner earns money! Sounds like a win/win.

  6. Fantastic idea for a quarterly series Sam! I’m curious how your initial conversation goes when you approach a startup and ask to interview them? Are they excited to do it? Do they question your authority in the internet space? Has anybody turned you down yet?

    Also curious… are you looking for affiliate relationships, or does that not matter as much to you for this series?

    RelayRides does fascinate me. I wonder what the market demand is like in West Michigan for a 98 Taurus with no heat!

  7. Great series. You ARE sitting on a gold mine. It sounds like a great concept. I don’t want to rent my car out to strangers though. Why not just join one of the car sharing program already in business? Making extra income would be nice though.

  8. San Francisco is such a great place to live and it’s really cool there are so many startups all over the place. It’s definitely a place to get inspired. RelayRides sounds cool. I’ll check it out next time I need to rent a car to run errands or drive to South Bay to meet friends. $50/day is reasonable for an average price point and I like that there’s a bunch of options to choose from with location, type of car, and price. That’s also nice that both sides are covered with insurance. That would be my biggest concern in signing up so it’s cool they make it super easy. That’s wild that some people have bought extra car(s) because they’ve been doing so well!

  9. Now that we’re a one-car family and I ride my bike to work, something like this would come in handy on those days every so often where having another car would be helpful. I checked availability in my area and there aren’t really too many options close, but hopefully they grow and more cars become available!

  10. Big fan of this new series concept. You do have a remarkable level of access to those ‘in the know’ in SF. I actually read an article a couple months ago about how people were turning RelayRides and other car sharing programs into successful side businesses. Provided the economics and location were right, it would be a fantastic way to start your own fleet of cars like the gentleman in Chicago.

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