Using Your Neighbor’s Boat: Peer-to-peer rental for the marine industry
Where “ownership is king” was the mantra of the ‘oughts, “access is king,” is the new mantra of the ‘teens. Companies are scrambling to figure out how to get ahold of a Millennial generation that is very cautious with how it metes out its hard earned dollars. But, the new mantra is ringing true for some businesses: Millennials don’t want to buy, they just want to borrow. And businesses and innovators are stepping in to find out how they can find their share.
In the March 9, 2013 issue of The Economist titled “The Sharing Economy”, the magazine took a look at how renting is becoming democratized, shifting from ownership of a rental fleet at the top of a corporation to ownership of the fleet by users at the bottom. When 10 years ago you had to go to Enterprise or Avis to find a car for a day or week, now you can go down the street and borrow it from a stranger.
Options for boat rentals, however, have remained limited. Consumer access to boat rentals offered few choices due to sometimes limited rental inventories. Companies like Zipcar and Airbnb have been out for a few years breaking through the ice and prepping consumers for the concept of peer-to-peer rental, and now it’s the boating industry’s chance.
A scrappy team of self-described “powersports nuts” have been working together to pull together Fun2Rent , co-founded by Shawn Gardner, to provide the marine and powersports enthusiasts with the same access to the boating lifestyle that has been available for travelers and car owners.
The marine industry’s turn
A recent exhibitor at the Sacramento Boat Show, Fun2Rent - a peer-to-peer rental service for boats, PWC, ATVs, UTVs, snowmobiles and trailers - has been drawing enthusiasm from renters and users as a way for underused or unused toys to make money for the owners.
Sometimes owners can’t get out on the water as much as they like, making it difficult to justify the $20,000 and $125,000 or more purchase price. Most owners would be lucky to use it more than one day a week. And for those who live where there is winter, sometimes it’s hard to get out even 20 days a year.
Those boat payments don’t go away when the boat isn’t being used, however. Gardner has been working with a team of boating and powersports enthusiasts to increase access to the boating lifestyle and make it more affordable by providing boat owners with a way to reduce the cost of owning a boat and interested boaters with a way to get out on the water.
What’s mine is yours, for a price
The Fun2Rent platform is an easy way for owners to make extra money by lending their boats to other Fun2Rent users at a price they determine.
“On the owners side, they're pretty ecstatic because they're making really good money on stuff they're only using 10 to 20 days a year,” said Gardner. “Most of our customers don't use their equipment more than a few weekends a year. They get to use their boat when they want, and make money on it, too.”
Peer-to-peer rental allows owners of boats or other recreational vehicles to defray the cost of ownership significantly, to the tune of thousands of dollars a year. Still in nascent stages, Fun2Rent has already provided users with significant returns for some renters, with one craft making $8,000 last year alone, Gardner said.
The hope is that with more owners lending their boats and more users renting them, both parts will contribute to greater numbers of people staying involved with the boating lifestyle.
Though the site is still in beta, early users have expressed interest in purchasing boats of their own sometime in the future, and utilizing the site to offset costs of ownership.
Currently, the program is in early talks with select dealers to help develop the software more fully.
“Our platform is in beta currently, “Gardner said, ”and with a successful summer of rentals in 2012 we are now talking to investors, and dealerships to grow and expand our platform.”
Missteps in the right direction
The peer-to-peer rental system hasn’t been without flaw in the past. As the The Economist reported in March, the apartment of one Airbnb host was trashed and valuables were stolen.
So far, there have been no such major mishaps for Fun2Rent. There has been a report of damage, but liability insurance is provided for both owners and renters, as well as insurance coverage on vehicles, vessels and trailers rented through the insurance, underwritten by specialty insurance brokerage Lloyds of London.
It makes it a little easier for boat owners to let someone come take their baby out for a weekend on the lake or up and down the coast. To further back up renters and users, Goodwin Procter LLP helped draft Fun2Rent’s policies and agreements.
Dipping their toes in
“Fun2Rent’s safe and insured platform makes the sharing of expensive ‘grown-up toys’ simple,” Gardner said. “There are no listing fees, and an intuitive UI and calendar allows the owner to easily upload photos, select when they rent out their equipment, and set their own rental price.”
A small fee is deducted when the owner’s boat or vehicle is rented out to cover expenses, including liability coverage, service and support for the site, as well as marketing for the listings on the site. The rest: cash in hand for the owners.
“Boat owners who currently use Fun2Rent’s service are renting out their vessels a few days a month and earning $2,000-$8,000 per season, which helps cover their ownership expenses, “ Gardner added. “Those who are not yet ready to purchase but still would love to get out on the water can rent these affordable, quality boat and jet-ski’s with insurance through Fun2Rent’s service.”
On display at the Sacramento Boat Show, Fun2Rent has not only been drawing attention of consumers who may not have considered ownership, but have always been interested in boating, but also from marina owners looking to encourage long-berthed boat owners to make a little extra money and spur traffic at the marina.
But in the end, more boaters equals more boats sold, and inevitably, more service on those boats. Big names in the auto industry have been stepping up to find ways to make money on peer-to-peer rentals and auto-sharing. The boating industry will have to step up as well if it’s going to capture those same dollars.