With the rise of the sharing economy, peer-to-peer (P2P) car sharing services have become more and more popular. The concept is easy. Customers rent cars from private owners for short periods of time. In turn, vehicle owners put their idle cars to better use while earning money on the side. This business model often goes along with a well-designed, easy-to-use app that makes listing vehicles and renting cars fast and simple.

Peer-to-peer car sharing is a great concept, but it can be difficult to make a reality. What if I rent a car, but the vehicle owner doesn’t show up at the pickup spot? Or what if I want to lend my vehicle, but I’m away on a business trip and unable to meet renters for a physical key exchange? Companies like Turo and Nabobil are using Smartcar’s technology to solve these problems. Here’s how.

The need for digital car keys

Many peer-to-peer car sharing businesses see pain points in a vehicle’s pick-up and drop-off process. Vehicle owners have to physically meet renters and hand over their car keys. This is time consuming and inconvenient not only for vehicle owners, but for renters too. That's where digital car keys come in handy.

Digital car keys allow vehicle owners to share access to their vehicle directly in the car sharing app. When picking up a vehicle, renters unlock the doors with their phone and find the physical keys inside the glove compartment. This way, vehicle owners and renters no longer need to physically meet and exchange car keys.

The downsides of using car sharing hardware

Some P2P car sharing companies have implemented virtual car key solutions by professionally installing hardware devices inside vehicles. Unfortunately, there are several disadvantages to using hardware as a digital car key solution.

1. Cost

Hardware devices are expensive to use. They often need to be purchased upfront in large bulks, before the car sharing business knows whether vehicle owners will make use of the digital car key solution. Shipping costs, firmware updates, and the replacement of lost or stolen devices quickly add up and turn into large cost factors. In the worst case, vehicle owners churn before businesses can recover the hardware cost.

2. Time

It takes several days, if not weeks to ship each device to the respective vehicle owner. Every day wasted on shipping hardware is a day of missed revenue opportunity for the car sharing business.

3. Installation

Hardware devices don’t function correctly if they aren’t installed correctly. Companies either need to educate vehicle owners on how to install the device in their vehicle, or they have to build a network of technicians in every region to manage the installation work for them. Both distract significant time and resources away from more important parts of the business.

4. Reliability

Once installed correctly, hardware devices can get knocked out of place without vehicle owners or renters realizing it. In those cases, customers find themselves unable to lock or unlock a car from their phones. They aren’t able to identify the problem and how to fix it.

That said, hardware-powered digital car keys bear a lot of problems. During the past years, software technology such as Smartcar’s API has started to largely replace those outdated hardware solutions.

The advantages of hardware-free digital car keys

Smartcar allows car sharing companies to easily integrate keyless entry into any car sharing app without the need for hardware devices. Here is how our customers are using Smartcar.

1. Cost efficient

Instead of requiring large upfront costs, our simple SaaS pricing adapts to and scales with every business’s usage and needs. Automatic software updates make our solution easy and inexpensive to maintain.

2. Easy to integrate

Thanks to our friendly documentation and SDKs, it takes car sharing companies just a few hours to integrate Smartcar’s software technology into any mobile or web app. Our software is compatible with models of 14 vehicle brands across the United States, allowing most car owners to use it.

3. Instant onboarding

Vehicle owners onboard their cars with just a few clicks in any car sharing app. From here, they start using and sharing their digital car key right away. They don’t need to wait for a device to arrive in the mail, and they don’t need to spend time installing anything.

4. Reliable

Smartcar’s technology communicates directly with the 3G or 4G modem that is directly built into each vehicle. This connection is extremely reliable and eliminates the risk of damaged or misplaced components.

This is why peer-to-peer car sharing businesses shouldn’t use hardware devices as a digital car key solution, and why many companies use software alternatives such as Smartcar’s API instead.

Learn more about how Smartcar caters to P2P car sharing companies. Please don’t hesitate to contact us with any questions or feedback. We’re happy to help!