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$1,000 grants encourage Tasmanians to rent out their cars

Tasmania's hire car shortage and new Government initiatives designed to encourage car sharing are creating a unique opportunity for Tasmanian car owners looking for a lucrative side hustle.

Kate Trumbull

This article was written by Adam Daunt and originally published by The Examiner, 31 May 2021

The state government's new initiative to help ease the pressures being faced by the hire car industry may already be paying dividends.

Recently, the government announced a new plan to provide $1000 to cover the upfront costs of MAIB class 8 registration for people that want to register their vehicle as a hire car through the Hire and Drive Reimbursement Program.

Overall, the government provided $1 million dollars towards the scheme. The rental car industry has been a source of scarce resource in recent months, with hire car companies struggling to get new stock while cars flew out of the lots as travellers came across the Bass Strait.

That resulted in upward pressure being applied on prices in the rental car industry with some cars over the easter break being priced at around $200 a day at some major hire car companies.

Aside from the major hire car companies, the government's plan relied heavily on Tasmanian residents deciding to turn their cars or spare cars into hire car options.

It is a continuation of the support the government instituted earlier this year.

It saw the entry peer-to-peer car rental platforms to the Tasmanian market and the temporary allocation of MAIB class 8 premium without the usual additional cost.

That trial ended on February 1 with 42 participants taking advantage of that trial.

These initiatives have been openly welcomed by key tourism bodies like Tourism Industry Council Tasmania.

USER: Hobart resident Steve Ktori - Image source: The Examiner

For Hobart resident Steve Ktori, that initital support was a factor in getting started in the car sharing service, Car Next Door.

Car Next Door along with Evee which came in as an accredited car share program as part of the government's scheme late last year and is one set to primarily benefit from the new policy announced last week.

Car Next Door chief executive Will Davies said since launching the service in Tasmania in Janurary, there has been high demand.

"It's the strongest interest we have seen since launching in any state in Australia," Mr Davies said.

"More than 1000 trips have been taken, with the number of bookings doubling month on month."

Elicia Austin rents out her spare car, a 2006 Toyota Corolla, on the Car Next Door platform.

The car is one of the cheapest cars on the platform at $50 a day but the price point has proved popular with consumers.

"It's pretty much booked out everyday, it's gone off ... when I signed up I think there where only nine other cars on the app and most of them where in Hobart," she said.

"Now I think it is starting to become a lot more popular now and I think other people are cottoning on and signing their cars up."

Ms Austin said the fear of renting out her car to strangers is reduced by the platform's in-built measures to protect the hirer.

"For the most part people are really good and you have to rate them and they rate you so it's a little bit like Uber so you want to put your best foot forward," she said.

Car Next Door chief executive Will Davies - Image source: The Examiner 

Mr Ktori also rents out his car on the Car Next Door platform, after previously renting cars on the platform interstate.

"I was a bit of a fan of the service and I was kind of lobbying for them to come down because I liked the service," he said.

"I've barley seen the car ... and yeah not a scratch on the car, it's done about 16,000 (kilometres) and everyone has been awesome.

"I plan on keeping the car up for at least six months or a year and just seeing how it goes."

The car hire is a blend of two major growing trends Australia is seeing in the workforce on a national level in the gig economy and an increasing desire from people to have a passive income side hustle.

Nationwide, Car Next Door has reported a 196 percent increase in customers during the pandemic.

Currently, there are more than 12,000 people joining the platform every month around Australia, with over 18,000 signing up in the last month alone.

For Ms Austin, the car sharing platform is helping her earn extra cash to pay bills.

"For me, it's helped me keep my car on the road while I am using a different car and some pocket money on the side," she said.

"It's a good little side hustle."

The improvements on Car Next Door's platform, and the incentive for new registrations has Mr Ktori thinking about putting another vehicle on the platform.

Mr Davies said the incentive from the government would likely see people come out ahead financially.

"It costs about $600 in regulatory costs to list a car in Tasmania," he said.

"We are confident that the new Hire and Drive Reimbursement grant will boost the number of cars for hire, because people listing a car will now pocket $400 of the $1000 on day 1 and will then start earning up to $1500 a month."

At the time of the announcement, Premier Peter Gutwein said the car share platforms would be a key part of ensuring travellers continued to experience Tasmania.

"By getting more cars on the road our visitors can explore our regions and the special experiences we have to offer, which is just what they come here for," he said.

Mr Davies said that Tasmania has the capability to take advantage of the benefits of car sharing platforms.

"What we have is an opportunity to make use of the thousands of cars that are sitting around in Tassie right now, going to waste," he said.

Having been on both sides of the car share experience, Mr Ktori believes the platform has potential.

"A lot of people might choose not to buy a car or they might sell that car because they know there's a couple of (share cars nearby) that they can use," he said.

"I see a lot of potential."

This article was written by Adam Daunt and originally published by The Examiner, 31 May 2021

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