Earlier this week, General Motors unveiled its latest introduction of peer-to-peer (P2P) car sharing on its Maven platform.  Up until now, the Maven fleet consisted of GM-owned vehicles parked around 11 cities in the United States, which users could rent as an all-inclusive service.  Under the new Maven Peer program, which is being piloted in Chicago, Detroit, and Ann Arbor, owners of GM vehicles 2015 and newer will be able to add their vehicles to the current Maven fleet for short-term rental use.

The concept of disaggregated rental fleet ownership is not entirely new, however.  Car sharing platform Turo, which recently raised a Series D round funded with capital from Daimler, among other investors, aggregates cars for private short-term rentals between individuals.  Turo operates independently from Daimler and other OEMs and is therefore brand agnostic.  While this structure increases the number of vehicles able to qualify for the Turo fleet, GM has a clear advantage when it comes to lowering the transaction costs associated with each rental.  Specifically, when an owner signs up for the rental fleet, a Maven technician comes to the car and installs a device, which enables keyless access to the vehicle.  As a result, owners no longer need to meet up with renters to exchange keys and can instead passively rent out their cars with little inconvenience.  Further, given GM’s migration toward 4G LTE-connected vehicles, it is only a matter of time until the installation step can be eliminated, with all new GM vehicles being natively configured to participate in Maven.

GM has also come up with some interesting solutions to distribute responsibility and liability between owners and renters.  For example, GM provides a $1,000,000 insurance policy for rentals.  However, the policy only covers damage or other liability while the vehicle is rented.  The owner is still responsible for maintaining an insurance policy for all other times, including when the vehicle is idle between rentals but listed as available.  While owners are protected, there are some subtle downsides to the split insurance arrangement.  For example, some insurance policies offer discounts for lower-mileage drivers.  If insurance companies do not allow an owner to distinguish between the mileage driven for personal use vs. driven by renters, an owner’s insurance rates may climb to reflect the higher use, even though the vehicle would be covered under GM’s policy for the additional renter mileage.  GM does place a 180 daily mileage cap on its renters before a mileage surcharge is applied.  However, with the average American driving 29.2 miles per day, it is unlikely that an owner will often, if ever qualify for additional reimbursement to make up for the higher insurance rate beyond the base rental income.  Otherwise, GM has mostly removed itself from the equation, requiring renters to cover gas and any other fees (e.g., tolls, tickets, etc.) and requiring owners to pay for regular maintenance and keeping their cars clean.

As GM opens the door for personal ownership of fleet vehicles, we have to ask whether the model will scale just among individuals, or if businesses and institutional owners will be allowed to join.  Notably, under the current terms of use, Maven limits owners to one vehicle.  At the outset, it appears clear that the service is intended as a true P2P service.  However, upstarts like Mobiliti, which collaborates with dealers to provide an all-inclusive subscription service utilizing existing dealer inventory, and Condor (acquired by Mobiliti), which owned and operated its own fleet, are showing that the question, “Who will own all of the cars?” has yet to be answered.  One can imagine that if given the opportunity, GM dealers will see a new revenue stream, by putting their used vehicle inventory to work while waiting for the vehicles to be sold.  As for new cars, warranties typically run from an in-service date, so dealers should generally avoid introducing their new vehicle inventory to a car share service to avoid the warranty from running, which is a similar issue faced with demo cars.  The roles between manufacturers and dealers can often be contentious, especially when considering issues such as prohibitions on direct-to-consumer sales.  However, if dealers are allowed to get involved in programs such as Maven Peer, a mutually beneficial relationship may exist in which manufacturers, shifting toward a service-based revenue model, offload the capital expenditure associated with fleet ownership and finally get a cut of the used car market, while dealers can leverage their idle inventories for additional revenue streams.

Whether cars are owned by individuals or organizations in the future, it is clear that ownership will look very different, if GM has anything to say about it.