Old-school carmakers see future in sharing, not owning

By Aarthi Rayapura August 1, 2016

Emily Benjamin, 31, and her husband Jamie Talbot, 35, lived happily car-free in San Francisco for five years, relying on occasional rentals for weekend trips. But last year, they took the plunge into leasing a brand-new silver Audi A3 sedan.

The impetus? A promotion between Audi and Getaround, a San Francisco startup that lets people rent their personal vehicle to other consumers.

Now they rent their car out about 100 hours a month for $14 an hour, more than offsetting the cost of the lease, insurance and parking.

“It’s been fantastic,” Benjamin said. “A car wasn’t really necessary for us, but we saw this as a small way to make some money or break even and get to use a car as a side benefit. We’ve been pleasantly surprised by how well it works.”

The couple’s story encapsulates why mainstream carmakers increasingly are partnering with tech startups, seeking access to the changing mores of Millennials, who seem to prefer access to ownership.

“It will take four Millennials to replace the spending power of one Baby Boomer in the automotive retailing marketplace,” said Steven Szakaly, National Automobile Dealers Association chief economist, last year.

That’s why even as Detroit pours big bucks into Jetsons-style technology like self-driving cars, century-old car companies are also investing in companies that offer transportation as a service rather than automobiles as a product. Most of those companies — Lyft, Uber, Getaround and Turo (formerly RelayRides) — are based in San Francisco.

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