RelayRides abandons hourly rentals, blames cost of hardware that allowed phones to unlock cars
When Sharing Doesn't Make Sense in the Sharing Economy — In the ideal vision of the “sharing economy,” people own less stuff, while the stuff they do own gets used far more …
Context & Ripple Effects
RelayRides built its peer-to-peer marketplace on the promise that idle cars could be rented by the hour, but the phone-to-car unlock hardware that made self-serve short trips possible carried a per-car cost the company says it could no longer absorb. The decision to drop hourly rentals outright — rather than reprice them — is the detail that made this story travel: Forbes, GigaOM and TechCrunch all picked up Wired's report the same day.
The piece lands as an early stress test of the sharing-economy thesis itself: when the enabling infrastructure is owned by neither side of the marketplace, the middleman eats the capital cost, and the 'use stuff more, own less' pitch runs into unit economics.
First-order effects
- Car owners listing on RelayRides lose the hourly format immediately, narrowing their earning window to daily-and-longer trips that don't require the costly unlock hardware.
- Renters who used the service for errand-length trips are pushed either toward longer bookings or to competing short-rental options outside RelayRides.
Second-order effects
- Any rival running hourly peer-to-peer rentals faces the same hardware bill, forcing a choice between subsidizing unlock kits per vehicle or conceding the short-trip segment to fleet-based carsharing operators who amortize hardware across one owned car instead of thousands of owner-supplied ones.
- Automakers become the potential cheap-hardware suppliers: factory-installed connectivity would remove the retrofit cost that killed RelayRides' hourly model, making OEM partnerships more valuable to P2P platforms.
Third-order effects
- If retrofit hardware stays expensive, peer-to-peer car marketplaces structurally converge on conventional rental terms — keys handed over manually, minimum rental periods enforced — blurring the line between 'sharing' and plain rental until cars ship natively connected.
- The episode feeds a broader reassessment of whether sharing-economy platforms can carry capital-intensive enablement layers, a critique likely to shape how investors price hardware-dependent marketplaces.
The trend: Peer-to-peer marketplaces are learning that enabling hardware, not marketplace software, determines which sharing formats survive — and the ones that require physical retrofits fall away first.