So-called peer to peer carsharing (P2P) is one step closer to reality in California with the passage and signing into law of AB1871 introduced by Assembly member Dave Jones. Referred to as "personal vehicle carsharing" (dare I call it PVCS?) in the California measure, signed into law by Gov. Schwarzenegger today, the law change was needed because California statute specifically prohibited private car owners from renting out their vehicles.
It's not clear how many other states have laws specifically potentially blocking personal vehicle carsharing. My guess is that even in states where there isn't a prohibition, including some specific rules about PVCS can help minimize lawsuits.
The changes have been moved along by Spride, a California company founded by high investor Sunil Paul, and City Carshare, the non-profit carshare serving the San Francisco bay area. Spride and City Carshare immediately released a statement praising the passage of the law and saying that vehicle owners enrolling cars in Spride will have access to City Carshare's 13,000 members when the law goes into effect January 1, 2011. The statement says that vehicles will be outfitted with the same technology as City Carshare uses - the OpenCar telematics unit.
There have been no comments yet from the other California-based P2P carshare startup Getaround or from industry giant Zipcar. Meanwhile on the east coast RelayRides, the first peer to peer carshare, which has been operating for over 3 months, continues to grow. (Disclosure: I am an advisor to RelayRides.)
The bill was introduced and moved by Assembly member Dave Jones (D-Sacramento). Jones is Democratic nominee for California Insurance Commissioner in this November’s election. SF Streetsblog reports that Jones "worked with car insurance companies from the beginning to craft a solution amenable to them. Jones immediately said he would enroll his own car in a P2P program - but didn't say whether it would be Spride or Getaround, another California based personal vehicle carsharing service.
The new law is mercifully short and to the point. Basically, it:
• Defines Personal Vehicle Carsharing as "privately owned vehicles that are allowed to be used by drivers other than the owner as part of a communal pool of vehicles"
• Defines a Personal Vehicle Carsharing Company as one that operates a service and provides insurance at least 3 times the state minimum for personal auto insurance.
Staffer to Assembly member Jones report that getting the insurance industry and trial lawyers on board with the proposed changes were key to the smooth passage of the bill.
The law has a very important proviso that revenue generated can not exceed the expenses of operating the vehicle. It outlines eligible expenses as lease or loan payments, insurance, parking, depreciation, fuel and maintenance.
The law also prohibits personal auto insurers from canceling or not renewing a policy, or classifying the vehicle as "commercial or for-hire" vehicle because it is participating in a personal vehicle carsharing program.
I am remiss in reporting that CommunAuto, in Montreal, Canada, announced in July that they would be offering their members P2P carsharing as well. CommunAuto proposes to take a very low-tech and low cost approach which would not involve any technology installed in vehicles. In order to participate in CommunAuto's program, vehicle owners would have buy insurance from La Capitale General.
I am working with Oregon State Senator Jackie Dingfelder to make changes in Oregon law to facilitate PVCS, as well. Our efforts are patterned after the California approach, in order to keep things simple for carshare operators, insurance companies and vehicle owners and renters. I appreciate the help from Seattle-based Sightline Institute.
Full text of the California law and legislative history and analysis can be found here.
