AB 1871 Personal Car Sharing

Update: AB 1871 has been passed into law. It goes into effect in January 2011:

http://www.bnet.com/blog/electric-cars/in-hard-hit-california-personal-car-sharing-is-a-new-revenue-stream/2421

U.S. BILL AB 1871 Legalizing “Personal Car Sharing”

California Assembly Member Dave Jones introduced AB 1871, which passed.

Status 09/09/10 – AB 1871 goes to the Governor of California for signing into law.

More details

Personal Car Sharing (Car owners renting their cars to their neighbors)

California is about to pass Bill AB 1871 that will allow car owners to rent out their personal cars to their neighbors WITHOUT the need to (1) utilize their own insurance, (2) obtain commercial plates, and (3) obtain commercial insurance. Brokers within this industry will facilitate these personal rentals by providing them with a central office where they can drop off their cars and allow their neighbors to rent them out for a reasonable fee. The car owners can also store their cars at their location and have their neighbors pick up the cars from them. Furthermore, car owners can rent their cars out to employers who provide them to the employees. Such cars can be stored at the broker’s parking lot.

AB 1871 will allow car owners to receive temporary insurance when they are part of a personal car sharing community. Thus, part of the fees will be generated from offering this service. There will be a healthy competition in this area to keep insurance costs low.

Conventional “car sharing”, as opposed to “personal car sharing”, incorporate methodology that requires them to own and maintain the vehicles. However, under the personal car sharing business model, the brokers will NOT be required to own or maintain the vehicles. Thus, this cost is eliminated from the overhead in running the business.

Many people have voiced the concern of renting out their cars to strangers. However, there are innovative approaches to deal with this issue. First, the conventional approach is to conduct background checks and to read feedback ratings. Or to simply rent the vehicle to an actual neighbor the car owner knows and trusts. One innovative approach is to purchase a wreck and use the income from that car to pay for the primary car. Bill AB 1871 does NOT appear to prohibit such a practice. The personal care sharing market appears to be growing at a high rate of speed and the passing of AB 1871 will only go to increase this pace. With the success of AB 1871 in California, other States will follow with their own laws. It appears that this new business model is going to be huge.