RelayRides: How to Kill a Good Concept with Fees


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I’m a big fan of innovative concepts and recently came across San Francisco based RelayRides, a peer-to-peer car rental company. I’m a fan of innovative concepts and puting my idle Nissan Altima aka “Walter”, to work seemed like a good idea and easy way to make a little extra cash. So I created a RelayRides listing and within 48 hours already had someone interested in renting my car.

I swapped messages with her and prepared Walter to be rented – then surprise! I got this message from the prospective renter:

Good Morning Mike,
I’m new to this relayrides and wasn’t aware that because I have a debit card there’s a $500 deposit due at booking. Although I got excited about renting your Altima I’m not going to be able due to the deposit amount.

I was perplexed and surprised at this odd fee as I’ve never heard of it elsewhere and apparently neither has she. So I reached out to RelayRides Support and asked them why they opted to charge a mandatory $500 deposit for first-time renters. The response I got was that it was effectively another protection for renters like me. But herein lies my beef.

By choosing to rent my idle car out to strangers, I’m assuming a certain amount of risk. RelayRides claims to have a bulletproof million dollar insurance policy that protects my car – however, requiring an additional fee actually makes me skeptical on the quality of my coverage and tells me RelayRides execs don’t understand the dynamics of their market at all. We are talking about car rentals – a hyper competitive, price sensitive consumer market.

If you have the option to rent from Zipcar, Hertz or any of the dozens of other car rental competitors that do not apply a $500 initial fee, why would you rent from RelayRides and pay that absurd fee? It doesn’t make any sense.

So in short, RelayRides is a great concept that will hopefully evolve based on the competitive landscape and feedback from car owners when renters balk at unnecessary fees.

 

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