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OnStar Rental System Turns Texts Into Tickets to Ride

OnStar Rental System Turns Texts Into Tickets to Ride

A new partnership between GM and RelayRides will let owners of vehicles with the OnStar service rent their cars out to others. A website matches renters to owners, RelayRides spots the insurance and OnStar enables the handoff to proceed without the exchange of physical keys.

By Richard Adhikari
07/18/12 6:00 AM PT

Owners of GM vehicles who subscribe to the automaker's OnStar service can now rent their vehicles out to other people when they're not in use.

RelayRides is the first third-party developer to integrate with OnStar's proprietary application programming interface (API). The API will be made available to other devs later this summer.

Vehicle owners set the rental rates and collect 60 percent of the take; San Francisco-based RelayRides takes the rest.

RelayRides takes out a US$1 million liability insurance policy on vehicles rented out. The vehicles are completely covered against physical damage up to their actual cash value.

Only vehicles that were built in 2000 or later, have less than 120,000 miles on the odometer, and meet all legal requirements for vehicle safety, conditions and operations, can be listed for rent.

How the Rental System Works

Car owners list their vehicles on the RelayRides site. The company notifies them of any reservation requests and awaits their approval after checking on the renter.

The owner either hands over the key manually to the renter or RelayRides sends the renter a text message that lets the renter unlock the vehicle using OnStar.

Renters pick the car they want after searching the RelayRides site, pick up the keys or get the text message then unlock the car using OnStar through their mobile phones. Then they're free to hit the road.

RelayRides provides insurance coverage and 24/7 roadside assistance to renters.

Vehicle owners get 60 percent of the reservation fee, 100 percent of any gas charges, excess mileage charges, and 50 percent of any files levied against renters because of policy violations. RelayRides sends vehicle owners a check every month.

Crime and Punishment

RelayRides reimburses owners for charges such as towing fees and parking tickets that are incurred by renters.

"If a renter receives a ticket during their reservation time or within 24 hours of the return time, it is the renter's responsibility to pay it," Shelby Clark, founder and chief community officer of RelayRides, told TechNewsWorld. "If the renter notifies us that they are going to take care of the ticket, they will not be charged any additional administration fees as long as they pay it promptly."

If, on the other hand, the ticket is received by the owner who hands it in to RelayRides, the company will charge the fee to the credit card used by the renter and may add on an administration fee.

Further, if a renter gets tagged with a DUI or is involved in an accident or other violation, that driver may be removed from the RelayRides community depending on the violation, Clark said.

The Darker Side of Renting

The system raises some interesting questions. For example, if a renter gets into an accident, will that go on the vehicle owner's driver's license or insurance record? Who's responsible if the vehicle's used in the commission of a crime?

If a renter gets into an accident, the insurance policy provided by RelayRides will kick in, leaving the personal policy of the vehicle's owner untouched, the company's Clark said. "The owner's policy likely has a specific exclusion for coverage for when someone rents out their car, which is precisely why RelayRides has purchased this insurance policy for our owners."

However, things might not always go quite that smoothly. The owner of a vehicle rented out through RelayRides in Massachusetts has been dragged into an insurance claim filed against the company because she was the owner, Boston Injury Lawyer reported. The renter was killed in a collision with another vehicle in February and three other people were seriously injured. It's not clear whether or not the owner will have to accept liability and have to pay out money. The law in Massachusetts, at least, is not clear on what personal liability goes to the owner in such a case.

"The potential risks involved in terms of wear and tear, possible damage and liability would outweigh the benefits to me," technology analyst Charles King told TechNewsWorld.


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