You're happy to let your best friend borrow your mountain bike, but would you be willing to loan it out to a total stranger if you could make some money off the arrangement?
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That's the idea behind peer-to-peer renting, a new twist on the peer-to-peer (P2P) commerce mastered by sites such as eBay and Craigslist. Instead of selling the mixer or the kayak that sees only occasional action, you loan it to people in your town, get paid a small rental fee and get it back when the borrower's done with it. In the past few years, almost a dozen websites have popped up promising to connect lenders and borrowers. For instance, you can use GetAround, JustShareIt and RelayRides to rent out your car or motorcycle, SnapGoods to rent out electronics and gadgets, ToolSpinner to rent electric drills and lawnmowers and Rentalic, Zaarly and Krrb to rent out a little bit of everything else.
It's all part of the collaborative consumption movement, which encourages sharing, including renting, as a way to save money, protect the environment and connect with people. But despite the throwback sound, P2P renting is more high-tech than hippie, with websites that eschew cash for credit cards, Paypal accounts and mobile payment processing.
How peer renting works
Each site operates a little differently, but all use technology to make renting easy, secure and relatively inexpensive. On Rentalic, which founder and CEO Punsri Abeywickrema calls "the eBay for rentals," a user creates an online listing for the item she wants to rent out, choosing her own rental fee. A juice press could go for $15 a day, a lacrosse stick for $25 a month. When someone wants the item, he reserves it on an online calendar, and the two arrange a time and place for pickup. The borrower comes armed with a secret security code from Rentalic; when the item is up to snuff, he gives the code to the owner, who punches it into Rentalic's website or mobile app to transfer the payment via Paypal. Rentalic takes 5% of the fee, but "the only time Rentalic charges is when something gets rented," says Abeywickrema. "It's totally free to list things."
On SnapGoods, credit cards are key to payment. As a borrower, you make a reservation online -- the site specializes in tech gear, such as cameras and iPads -- and enter your credit card info on the site. Once you pick up the item, you trigger payment by phone or on the SnapGoods website, and a 7.5% fee is charged to the borrower on top of the agreed-upon price. "That means if I agree to lend you my Canon Mark 5 for the weekend for $100, you'll spend $107.50 total," says Ron Williams, SnapGoods' CEO and co-founder.
It's a similar process for Zaarly, except in reverse: People post requests on the site to borrow an item, such as a steam vacuum, or have a chore performed for them. (It's not uncommon to see digital calls to "Bring me some ice cream" or "Go to Costco for me.") "You say what you want, what you're willing to pay and how soon you need it, and it gets broadcast to everyone in your local community," says founder Bo Fishback. "And you can look at [the feed of local requests] and see what you have that you can provide to someone else." The seller or service provider gets paid on the spot, usually by credit card; the buyer presses pay, and the seller gets a text message letting them know the money was processed. If you use cash, Zaarly doesn't get anything out of your exchange, but "if you pay by credit card we guarantee it, and we take a transaction fee" of 2.5%, says Fishback.
It's a concept that's catching on. Zaarly hasn't hit its first birthday yet, but as of early 2012, it had helped arrange 15,000 transactions among 60,000 users and was adding 10,000 users a month to its subscriber base.
If you shudder at the thought of handing over your prized possessions to people you don't even know, you're not alone -- and you're certainly not without reason. AirBnB, which specializes in connecting homeowners with travelers who'd like to rent their spare bedrooms or apartments, had a well-publicized security disaster in 2011, when a San Francisco woman had her apartment vandalized and her valuables, including identity information, stolen by a renter.
That's why person-to-person rental companies are bending over backward to assure you of their safety. "We have focused on safety from day one," says Williams. "Other than AirBnB, which understandably recently made safety a much bigger focus, SnapGoods is the only site that guarantees the goods of the lender. We cross-reference identity data points and verify payment information in order to manage risk in our community." And if something does happen to your high-end sound mixing equipment, SnapGoods insures against the loss.
According to Fishback, what makes P2P renting safest is that it's local. "People don't want to treat their neighbors badly. We have people doing deals with someone one a block away or with their next-door neighbor. The more local you are, the safer you get." Zaarly also uses reputation metrics -- reviews, user ratings, profiles -- to ensure that users are on the up-and-up. It seems to be working. "We've had one person not get paid so far, in over 15,000 transactions. It's been almost amazingly safe."
The benefits of renting
Why rent your stuff? You may not make a ton of money, but it could be a nice sideline, as well as a way to get some use out of things you have sitting idle. Abeywickrema himself has made more than $300 in the past year renting out his stuff on Rentalic, including a lawnmower for $5 a day, a disco ball for $5 a day and snow chains for $10 a week. But he's even happier about the benefits to other people in the community: "The people who rented those goods were able to save thousands of dollars by renting instead of having to buy new."
There may be other tangible benefits. If you rent your car out on JustShareIt, for instance, your vehicle will be equipped with RideLink, an OnStar-like device that lets you unlock, start and monitor your car remotely -- even order a pizza with the built-in communication device. "Our trifecta is convenience, security and adventure," says Ali Hart, JustShareIt's spokesperson. "But we're really about connecting people and building community."
Connection is the benefit that Neal Gorenflo, founder of Shareable magazine, which chronicles the collaborative consumption movement, appreciates most. "I have a retired neighbor who runs an AirBnB, rents her car out on GetAround and hosts regular potlucks. The rentals generate extra income, but her main motivation is to stay connected to her community."
Get to know your neighbors and make a few bucks in the process? Sounds like a good deal.
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