General Motors to offer car sharing via mobile app and OnStar

General Motors has partnered with a San Francisco-based start-up company named RelayRides to enter the car-sharing business.

In early 2012, GM vehicle owners in California will be able to use the OnStar system to rent out their cars when they aren't using them. The service will available nationwide for OnStar subscribers by the end of the year.

RelayRides will provide the online venue for transactions, plus a $1 million insurance policy for renters. Chevy, Buick, GMC or Cadillac owners will be in control of the rates and availability of their vehicles, if they choose to participate in car sharing.

All OnStar-equipped vehicles will immediately be "RelayRides ready" without needing additional hardware. Cars that aren't OnStar-enabled will need a device installed to make them detectable for borrowers.

As opposed to services such as Zipcar, GM's approach is to simplify the process by replacing the middleman with cell-phone technology. RelayRides will provide a mobile application using OnStar that allows borrowers to detect available vehicles, make online reservations, locate the reserved car via GPS and unlock it. No need to pick up a phone.

"Our goal is to find ways to broaden our customer reach, reduce traffic congestion in America's largest cities and address urban mobility concerns," GM vice chairman Stephen Girsky said.

As urbanites deal with congested streets and costly parking, borrowing vehicles is becoming an increasingly popular choice.

About 640,000 drivers in North America use car-sharing services as of July 2011, versus 400,000 in 2009, according to Innovative Mobility Research. Companies such as Ford, Daimler AG and BMW have become involved in the car-sharing market.

GM will promote its program through events in California showcasing OnStar and RelayRides technology in Chevrolet vehicles such as the Volt hybrid.

By Michelle Koueiter