Call it whatever you like – the sharing economy, collaborative consumption, the peer-to-peer marketplace, the access economy – but there is no denying that the idea of renting other people’s stuff or loaning out your own for cash is catching on. Fast Company predicted that 2012 would be the year for explosion in the peer-to-peer accommodation market pioneered by Airbnb. And it seems that this growth is expanding to include other renting arrangements as well, with dozens of online services popping up to capitalize on the trend. This all sounds great, but a recent incident is bringing attention to some of the liability issues associated with these borrowing arrangements. An article in the New York Times details the complicated liability situation resulting from a fatal accident that occurred when someone who rented a car through RelayRides crashed into another vehicle and was killed. RelayRides is a popular car sharing company that has gotten backing from GM and Google. The driver injured four people that were in the other car, and although RelayRides provides $1,000,000 in liability coverage to renters, it doesn’t look like it’s going to be enough to cover their medical claims.
Call it whatever you like – the sharing economy, collaborative consumption, the peer-to-peer marketplace, the access economy – but there is no denying that the idea of renting other peoples' stuff or loaning out your own for cash is catching on. Fast Company predicted that 2012 would be the year for explosion in the peer-to-peer accommodation market pioneered by Airbnb. And it seems that this growth is expanding to include other renting arrangements as well, with dozens of online services popping up to capitalize on the trend.
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This all sounds great, but a recent incident is bringing attention to some of the liability issues associated with these borrowing arrangements. An article in the New York Times details the complicated liability situation resulting from a fatal accident that occurred when someone who rented a car through RelayRides crashed into another vehicle and was killed. RelayRides is a popular car sharing company that has gotten backing from GM and Google. The driver injured four people that were in the other car, and although RelayRides provides $1,000,000 in liability coverage to renters, it doesn’t look like it’s going to be enough to cover their medical claims.
According to the owner of the rented car, Liz Fong-Jones, RelayRides sent her a check to cover the cost of replacing the car, and was supposed to step in to cover any claims from the accident. However, Liz's insurance company eventually got involved, and since it's possible that the claims for the accident could total between $1.2 and $1.5 million, additional coverage is likely to be needed. Apparently RelayRides told her insurance company to deny the claim because they have an interest in making sure insurance companies will cover people using RelayRides. But if they do, it’s possible that Ms. Fong-Jones could be held responsible for the additional costs. And RelayRides has not yet agreed to step in and cut a check to cover this potential liability.
RelayRides photo credit the Young Urban Professional.
Article continues at ENN Affiliate TriplePundit.
