Uber is offering people cash to loan their cars to neighbours

The rideshare giant has contacted customers offering to pay them to loan their cars out. But experts warn to check the fine print.

Uber is encouraging car owners to rent out their pride and joy to “trusted neighbours”, as demand for car-sharing services grows in the post-COVID environment.

The ride-sharing service has contacted Australian customers, offering them a $200 bonus to sign up with Car Next Door, which loans out people’s private cars to other motorists.

But experts have warned drivers to check the fine print before loaning their car to strangers.

NRMA spokesman Peter Khoury said users must be “clearly across the terms and conditions”.

“You’re giving your family car over to a complete stranger,” he said.

“You’re largely going in blind. If you’re prepared to do that it is fine, but it is a risk you’re going to have to be prepared to take.”

Car sharing services are becoming more popular, but experts warn they could be pitfalls. Picture: Getty Images.

Lawyer and car enthusiast Robert Bryden said people should “read the fine print carefully”.

“You’re turning a private asset into a business asset. Do you have to declare that to your insurer or to the tax department?” he said.

Car Next Door chief executive Will Davies said short-term peer-to-peer car loans complemented Uber’s existing ride-sharing service.

“There are some trips that are very well suited to Uber,” Mr Davies said.

“But going to visit your grandma for five or six hours across town, or picking up something from Ikea or Bunnings just isn’t an Uber-type trip.”

The car-sharing service has grown by 50 per cent in the last year, with 19,000 users signing up last month.

Car Next Door says business has grown since the pandemic. Picture: Supplied.

“It’s one of the few ways you can get around without being exposed to someone else’s airspace,” Mr Davies said.

Car Next Door claims about 250,000 customers and 4300 cars are on the books, facilitating almost 700,000 trips since 2013.

Backed by Hyundai, Ampol (formerly Caltex) and Suncorp, it looks unlikely to follow failed start-ups such as Carhood.

The service passes parking and speeding fines on to whoever was driving at the time.

Accident damage is covered by the company’s corporate insurance policy as opposed to car owners’ personal plans.

Accident damage should be covered by the car-sharing company. Picture: Istock

Mechanical problems are assessed by a third-party expert who determines who was at fault.

While Uber has tight rules for vehicles on the platform — including a five-star crash rating — Car Next Door generally requires cars are built no earlier than 2001, have fewer than 400,000 kilometres, less than 200kW of power and be worth less than $50,000.

Performance cars such as the Subaru WRX are banned from the service.

Customers aren’t allowed to borrow cars for off-roading or towing, and are banned from driving through water, snow, or on the beach.

Mr Bryden says buyers need to approach the scheme with caution.

“Is it a hire car? Is it a commercial vehicle? People should think about their tax implications for writing assets off, that way there are no surprises later on.”

CIVIC DUTY

Julius Tio rents his Honda Civic out on Car Next Door, earning about $5000 per year as a side hustle.

Mr Tio joined the service to help pay for the running costs of his then-new car, and prefers to rent the Honda out during the week when working from home.

Julius Tio makes cash renting his blue Honda Civic out on Car Next Door. Picture: Tim Hunter.

“If they’re using it Monday to Friday I’m happy, it’s almost like free money,” he said.

“On the weekend I might borrow another car on the platform or use another car sharing service. I use GoGet a lot.”

He said customers need to think about their car as an asset rather than a personal item.

“If you have some sort of separation anxiety then sharing the car will be very hard,” Mr Tio said.

“I’ve had damage on my car done by borrowers. I wouldn’t say it’s common but when it happens I call Car Next Door and they’ll fix it.

“It’s nothing to worry about.”

BRIGHT SPARK

Natalie Healy from New Brunswick rents out her 2016 Holden Spark on Car Next Door, earning about $4000 per year.

Ms Healy joined the service just before the COVID-19 pandemic hit and has used the extra funds to cover the costs of her insurance, services and registrations as it was just gathering dust on the side of the road during the week.

Natalie Healy is part of Car Next Door’s car sharing operation. Picture: Ian Currie.

“It earned around $2000 in the first six months and has totally exceeded my expectations,” said Ms Healey.

“Last month I earned about $200 on it but I’m already on $300 for this month, and expect it to be much higher by the end of the month due to it being the Easter holidays, plus the lack of car rentals available in Melbourne.

“I think most cars on the platform are automatic whereas my car is manual, which might explain why I get a lot of European borrowers. I like driving a manual though — it feels like you’re driving properly!

“It’s been going so well, I’m thinking of getting a van to list on Car Next Door too.”

Originally published as Uber is offering people cash to loan their cars to neighbours