This guy makes $1000 a month doing nothing
This guy makes $1000 a month doing nothing
IT’S dubbed “Airbnb for cars”, but if you want to make big bucks, vans are the way to go.
Melbourne landscape designer Michael Tanner currently makes up to $1100 a month renting out his Ford transit van on car-sharing website Car Next Door.
With the average Australian household now spending around $22,000 a year in transport costs, he’s one of a growing number of people turning to platforms like GoGet and Car Next Door for short-term car bookings, or to make extra cash from their vehicle while it’s not in use.
“I’ve got a late-model van that I use off and on for carting plants around. Most of the time it’s empty, so it has worked out very well,” Mr Tanner said. “It’s good for me as a small business. I don’t frequently need it but when I need it I just book it.”
The 47-year-old takes home between $800-$1100 a month renting out his van three or four days a week, which works out to about $500-700 after running expenses including registration, service and insurance.
“I just put the extra cash to the side,” he said. “There’s a secondary benefit, which is that it’s forcing me to think about whether or not I actually need to use the van — can I walk to work, can I walk to school to pick up the kids, those kinds of things.”
Launched in 2012, Car Next Door now has more than 30,000 borrowers and nearly 900 cars in Sydney and Melbourne on the platform, which last month launched in Brisbane. The average owner makes $3500 a year on the platform, while cars generally cost around $4 an hour or $20 a day to rent.
Car Next Door has an ambitious target of 10,000 vehicles on the platform by 2020.
The platform is currently valued at more than $13 million and has the backing of Caltex and high-profile tech entrepreneur Steve Baxter, who took a stake in the company during an episode of Channel 10’s Shark Tank.
Co-founder Will Davies came up with the concept while living in densely populated Bondi Beach, where he noticed thousands of cars sitting around doing nothing all day. “Studies have shown that cars are parked for 95 per cent of the time,” he said. “The current model of car ownership is crazy — it’s costly and wasteful.”
According to the Australian Automobile Association, Sydney is the most expensive city in Australia to run a car, with a two-car household facing transport costs of $419 per week, compared with $348 in Melbourne and $373 in Brisbane.
“Cars are one of the biggest expenses we have and when you look at all the outgoings like registration, fuel, insurance and tolls they quickly become a huge financial burden,” Mr Davies said.
“It’s logical for us to move into Brisbane, because after Sydney it’s the most expensive city in Australia to run a car. Most Queenslanders have two cars in the household and what we’re finding is a lot of people are leasing out their second car to offset this cost — it’s great if you’re running two cars just for the morning and afternoon school drop off or weekend sport.”
According to Mr Tanner, renting out his car to strangers “hasn’t been without its niggles”. “[Things like] the vehicle being booked then cancelled at short notice, not being returned and parked in the same place, some dents and scrapes,” he said.
“As a lender I’ve got to have a pretty good threshold on what I’m prepared to accept, to think of the car as a tool. If I was making less, $100 or $200 a month, it probably wouldn’t be worthwhile.”
Mr Davies said the key to Car Next Door’s success was strict membership criteria, an easy-to-use booking and payment system and comprehensive insurance that covers anyone driving the car.
He said borrowers had to meet “strict standards” to become members and “if they don’t stick to the rules then they’re out”.
A recent survey by RateSetter found more than two thirds of Australians now spend and earn money through the sharing economy, which has grown to more than $15 billion.
While that figure includes marketplaces such as eBay, Gumtree and Carsales, which are used by 54 per cent of Aussies, the next most popular service was Uber, which nearly one quarter of people had used recently. There are about 54,000 Uber drivers in Australia and 2.4 million riders using the app.
About 15 per cent of respondents used shared accommodation such as Airbnb, which has around 100,000 Australian listings.