Using Your Neighbor’s Boat: Peer-to-peer rental for the marine industry

Fun2Rent Peer To Peer Recreation   Powersport Rentals

By Christopher Gerber
March 14, 2013
Filed under Features, Top Stories

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.

The Economist – March 9, 2013

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.”

Fun2Rent Rental Platform

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.

Some owners are making up to $8,000 a year renting to interested users.

“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.

Comments

4 Responses to “Using Your Neighbor’s Boat: Peer-to-peer rental for the marine industry”

  1. Dustin Armstrong on March 25th, 2013 2:29 pm

    As the owner of Temptoy.com, Fun2Rent is our competition. However, I love seeing them succeed. It is only good for our industry as I see a great benefit in what they / we are doing in the area of Collaborative Consumption for boats.

    [Reply]

  2. Marco Thompson on March 26th, 2013 4:35 am

    I LOVE the idea of these services….. BUT…. I do not see long term success in the model. I have been an investor for many years, as an angel and venture capitalist, but my real passion is water sports… If there were a real model here, I would bless it publicly…

    Here is the core of the problem – Every boat is different, and the level of instruction necessary for a first time operator to have a safe, and fun experience in a boat is just too high -

    Everyone can pick up a set of keys, and jump into ANY car, and drive away in a matter of seconds, with no user training required. THERE ARE NO SURPRISES…

    Everyone can walk into a hotel room or BNB and figure out how to use the bathroom, air-conditioner, lighting, and bed. THERE ARE NO SURPRISES…

    This is NOT true on a typical power boat. Every manufacturer has a different dash configuration. The displays & controls from one model to another within the same manufacturer are not consistent, let along from manufacturer to manufacturer, or back thru legacy boats.

    Worse yet, every boat has a different set of ballast and trim controls, most of which are completely custom to that boat, and poorly marked for use by a stranger. On some boats, spedific valves need to be open or closed inside storage lockers or under seats before or after bags are filled.

    Every owner has a certain set of procedures that are required every time the boat is used, especially for boats exposed to saltwater. From engine flush to cleaning, to how to secure the boat cover, every boat is different.

    At the end of the day, you wind up with one of two problems:
    1) The boat needs to be delivered by an expert on the boat (the owner) and that person needs to spend 1-2 hours with a very smart customer to make sure everything is communicated correctly. – Result – Lots of time investment by owner or other expensive person, yet still no better than an 80-90% customer satisfaction ceiling level.
    2) The boat is delivered by someone less expert, or online sources (boat operation & videos) are relied on for user education. Results, higher margins, and even lower customer satisfaction outcomes

    Neither of the above results in a scalable business, in my opinion.

    I have operated a dozen or more different wakeboarding, waterskiing and wakesurfing boats… This is probably the segment of the power boating industry most appropriate to the model discussed. I have never operated a boat for the first time without at least an hour of expert instruction, and even then, there is usually some critical issue that was not covered in the conversation that I need support on in the middle of my boating day. If I could not get access to that person with intimate knowledge of that boat at that instant, my day turns from perfect, to a wast of my time…

    Marco Thompson
    619-518-3001

    [Reply]

  3. Shawn Gardner on March 26th, 2013 10:48 am

    Hi Marco,

    It’s Shawn the founder of Fun2Rent.

    Thanks for your honest feedback! You’ve mentioned many issues which we have or are currently addressing to reduce risk as well as increase every user’s experience.

    I would like to start with the insurance, which we have place to protect the owners and renters. It is not common in the boat or powersports rental market for renters to receive liability coverage or coverage on the rental equipment.

    We all know it’s not if an accident will happen, but when. This is exactly why I started Fun2Rent, to lower prices and provide insurance to renters. I declined a rental a few years ago because the rental company could not provide a basic level of insurance for me the customer. This same operator debated with me, that no rental companies will provide renter’s insurance. He was more or less 5% correct in this statement as the majority of companies do not provide insurance to the renters.

    With current rental companies, the renter is receiving instruction specific to operation of the vessel, which is good. Fun2Rent’s owner’s renting their vessels also cover basic operations of their boat, and many also have a check list with the boat that covers displays, special controls and reminders specific to their boat’s needs, along with emergency contact details.

    Renting a boat is not new, what is new, is the ability to rent from your neighbor at half the cost with insurance. Fun2Rent understands there are a “Thousand, What If ?” scenarios, and we have addressed the most serious scenarios, and working with our clients/owners to cover all the details to insure a safe, fun, and positive user experience. We know our business will not succeed if we cannot ensure every renter has a positive experience.

    We are still a small team tackling a big problem. If you consider the fact that 19 ft. runabout’s are currently renting for $400-600.00 per day and wakeboarding boats $600-1,200 a day, one can easily see the need for peer-to-peer rentals. Our team has solved the two biggest issues by providing affordable and insured rentals. I’m confident we can address the other details to ensure every renter has a perfect time on the water.

    Again, thanks for not holding back in your comments. These are serious issues that we know exist and are addressing as quickly as possible. When we have owner’s listing in the San Diego area, I will be sure to message you, so that you can experience peer-to-peer rentals vs. reading about it.

    Regards, Shawn Gardner

    [Reply]

  4. Jeff Knowles on August 29th, 2013 5:39 pm

    Hi Shawn,

    I’m an insurance broker and we’re trying to insure a company that does something similar but with RV’s. We’re having a hell of a time finding an insurance carrier to take on this type of account due to the potential exposure to propane. Would you be so kind to provide me with your insurance or broker contact?

    Thanks so much and best of luck to you.
    Jeff
    Jknowles@mcsins.com

    [Reply]

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