Personal Vehicle Sharing

Personal vehicle sharing is a practice by which people rent their cars to other people, or rent cars from other people, on a short term basis, usually by the hour, and usually through a service such as RelayRides, which matches car owners with car renters. The concept developed to help defray the cost of owning a car, help car owners make extra money, and enable people to use cars who do not want to own one. Personal vehicle sharing is a form of car sharing, a.k.a. carsharing, which is lauded by Carsharing.net as “a revolution in personal transportation - urban mobility for the 21st century.”

A recent study by the Transportation Sustainability Research Center (TSRC) at the University of California, Berkeley reports “As of October 2012, there were 33 personal vehicle sharing operators worldwide, with 10 active or in pilot phase, three planned, and four defunct in North America.” And, “As of October 2012, carsharing was operating in 27 countries and 5 continents, accounting for an estimated 1,788,000 members sharing over 43,550 vehicles. North America remains the largest carsharing region, with Europe and North America accounting for 38.7% and 50.8% of worldwide carsharing membership, respectively.”

Two draft bills in the 2013 Suggested State Legislation volume address personal vehicle sharing. The first prohibits a private passenger motor vehicle from being classified for insurance purposes as a commercial, for-hire, or permissive use vehicle, or livery solely on the basis that it is being used for personal vehicle sharing if the annual revenue received by the vehicle’s owner that is generated by personal vehicle sharing does not exceed the annual expenses of owning and operating the vehicle. That includes depreciation, interest, lease payments, automobile loan payments, insurance, maintenance, parking, and fuel.

This bill defines a personal vehicle sharing program as a legal entity qualified to do business in the state that facilitates personal vehicle sharing. It requires a personal vehicle sharing program to provide insurance coverage, and collect, maintain, and make available to the vehicle owner and the vehicle owner’s primary automobile insurer, records identifying the date, time, initial and final locations of the vehicle, and miles driven when  a vehicle is being used in the personal vehicle sharing program. The draft also limits the circumstances under which the vehicle owner’s automobile liability insurance can be subject to liability.

The bill states that automobile insurance policies cannot be canceled, voided, terminated, rescinded, or not renewed solely on the basis that the private passenger motor vehicle has been made available for personal vehicle sharing. It authorizes the insurer of the vehicle to exclude any and all coverage afforded under the vehicle owner’s automobile insurance policy while the vehicle is used by a person other than the owner as part of a personal vehicle sharing program. It also provides that the primary and excess insurers of owners, operators, and maintainers of the vehicle with the right to inform the insured that it has no duty to defend or indemnify any person or organization for liability for any loss that occurs during use of the vehicle in a personal vehicle sharing program.

This draft is based on California Chapter 454 of 2010.

The second SSL draft about personal vehicle sharing in the 2013 Suggested State Legislation volume defines personal vehicle sharing as the use of a private passenger motor vehicle by people other than the vehicle’s registered owner in connection with a personal vehicle sharing program. It defines a personal vehicle sharing program as a legal entity qualified to do business in the state that is engaged in the business of facilitating the sharing of private passenger motor vehicles for noncommercial use by people within the state.

It directs that private passenger motor vehicle insured by the vehicle’s registered owner under an owner’s insurance policy may not be classified as a commercial motor vehicle, for-hire motor vehicle, permissive use motor vehicle or livery solely because the vehicle’s registered owner allows the vehicle to be used for personal vehicle sharing if the personal vehicle sharing is conducted under a personal vehicle sharing program and the annual revenue received by the vehicle’s registered owner that was generated by the personal vehicle sharing does not exceed the annual expenses of owning and operating the vehicle. Those include depreciation, interest, lease payments, motor vehicle loan payments, insurance, maintenance, parking, fuel, cleaning, automobile repair and costs associated with personal vehicle sharing, including but not limited to the installation, operation and maintenance of computer hardware and software, signage identifying the vehicle as a personal vehicle sharing vehicle and any fees charged by a personal vehicle sharing program.

This draft is based on Oregon HB 3149, which became law in 2011.  

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