CHICAGO (CBS) — Car owners can make extra cash by letting strangers borrow their cars with General Motors’ new car sharing service.
The service, called Maven, launched a peer-to-peer option in Chicago and two other cities Tuesday.
“The time they’re not using their car, they can make money off it,” explained Kristen Alexander, the Marketing Manager of Maven at General Motors. “The sharing economy, in general, is something that continues to thrive.”
Cars are everywhere, but at any given time, many more are idle; so owners of newer GMC, Cadillac, Chevrolet, and Buicks can rent them out.
An SUV might cost $14 an hour to rent or $140 per day. To rent a sedan, it costs around $8 per hour or about $80 per day.
GM keeps 40% of the money and the car owner gets the rest.
“GM is looking outside the traditional model and that’s Maven,” Alexander said.
A smartphone app lets the borrower find, pay for, unlock, and turn on the car.
Borrowers need to return cars in the same condition and with the same amount of gas.
A $1 million insurance policy covers any damage.
“For people who live in the city, it may not make sense to own a car,” said Alexander.
“There’s a massive amount of change in the auto industry,” stated Morningstar Auto Industry Analyst, David Whiston.
It is that change that has GM offering a service that could decrease demand for cars.
“If the auto industry doesn’t innovate, Silicon Valley will do it for them,” said Whiston.
“[People] share homes, clothes, and workspace. It’s the sharing economy,” said Alexander.
Whiston suspects the ultimate end game for GM is an autonomous ride-sharing service to compete with Uber and Lyft.
The Insurance Information Institute says the $1 million of provided insurance should be sufficient in most cases, but traditional auto insurance will not kick in if your car is being used to make money. On-vehicle tracking devices could record poor driving habits of renters.
The Chicago Automobile Trade Association says dealers are watching programs like these with “great interest.” People who rent out their cars may need to buy new ones more often because of the increase in miles.