South Africans are always looking for ways to make extra cash, with the latest idea being peer-to-peer car sharing for those who do not use their vehicles often or have an extra one just sitting at home.
Think of peer-to-peer car sharing as Airbnb, but for cars. This idea is not a new one; there are companies such as RentMyRide, Zipcar, and others. The latest company to enter the market is CarShareNova, established by Engineer and former Bolt Manager, Themba Mgimeti, and Software Engineer, Lebo Mabala.
However, insurance companies have warned of the dangers of individuals renting out their cars or houses without proper cover. Normally, rental companies would insure their cars under a commercial or fleet insurance policy, but things are different with peer-to-peer car sharing because it is one person renting out one or two cars.
ALSO READ: Balwin faces court challenge as Airbnb-type letting divides residential estates
Another way to make money
Mgimeti told The Citizen that the idea for their company was born when they noticed how Airbnb allowed ordinary people to profit from an industry once dominated by hotels, and they wanted to do the same for car rental.
“South Africans love cars, and that is not going to change, but ownership is expensive. We wanted to create a solution that allows people to continue enjoying their cars while sharing the financial responsibility with others who need cars, but do not necessarily want to own them.”
He highlighted that peer-to-peer car sharing is more affordable for those hiring cars and for companies. “Peer-to-peer car sharing is transforming the rental market through affordability, accessibility, and diversity,” he said.
“Traditional rental companies face massive costs, buying fleets, securing depots, staffing operations, and managing handovers. Those costs get passed on to customers.
“In peer-to-peer sharing, the owner handles storage, maintenance, and handover at zero extra cost to the renter. This results in lower prices, more choice, and profits shared with everyday South Africans instead of a few corporate players. We were told cars are a liability, but rental giants were making billions from them. Now, anyone with a car can benefit.”
Safety around the car-sharing platform
When asked about the safety of the platform, for example, how can individuals be sure they will get their cars back in one piece, or how can people be assured they won’t be scammed, he said, “We’ve built CarShareNova with the same standards as global platforms like Uber and Airbnb”.
“Our verification system includes Home Affairs ID validation, live selfie checks, banking and residence verification, and transaction security backed by leading local payment partners,” added Mgimeti.
“We also used a proven in-app review system so that every user, host or renter builds a track record. This ecosystem of verified users, secure payments, and strong insurance ensures that both sides can share with confidence.”
Mgimeti said they also offer commercial insurance cover for peer-to-peer car sharing. “The policy activates automatically at handover, right after the pre-inspection check and in-app contract signing, and ends at return after the post-inspection check.
“We use a combination of AI and manual comparison to assess the car’s condition before and after each trip. Insurance is charged daily and deducted directly from the owner’s payout, meaning you only pay for coverage when your car is actually earning.”
ALSO READ: Average South African Airbnb host makes R26k per month, data shows
The right insurance cover is vital
He said that with their insurance, in the event of an accident or theft, the claim is processed seamlessly through their platform and their insurance partner, ensuring both the owner and renter are protected under a fair, transparent framework.
Ernest North, co-founder of Naked Insurance, told The Citizen that most personal motor policies will cover if you lend your car to a friend or family member, but not if you are earning an income from renting it out. He attributed this to changes in the risk profile once the car is used as a business asset.
“In such cases, you would typically need to take out a commercial or fleet insurance policy as these products are structured to cover the higher frequency of use and different risk factors involved,” said North.
“Renting out a single car is a relatively new trend that is not catered for by standard insurance policies, so you will need to arrange suitable business insurance.”
Is renting out a house or a car better?
Mgimeti noted that risks exist in both situations, renting out a car or a house. He, however, highlighted that it all comes down to the platform. “Airbnb has mastered trust in home-sharing,” he said.
North warned people renting out their property on Airbnb about choosing the correct cover. “Most home insurance policies will cover your building and contents if you live in the home yourself, or even if you rent it out to a long-term tenant, short-term rentals like Airbnb fall into a different category.
“Having new guests every few days changes the nature of the risk, similar to running a guesthouse, so many insurers won’t cover Airbnb rentals under a standard home policy. A commercial property or hospitality policy is often required.”
He highlighted the importance of disclosing that a property or car is being used for short-term rentals. “If you do not disclose, you could face serious repercussions if something goes wrong,” said North.
“Failing to declare commercial use can invalidate your policy, meaning your insurer could decline a claim for theft, damage, or liability. Transparency is key to ensuring you have the right protection in place.”
Commercial and business covers
North noted that commercial policies are specifically tailored to provide the cover you need, taking into account how your vehicle or property is being used to ensure you’re fully protected and not putting your income or business at risk.
Lwanda Lucwaba, Senior Underwriting Manager at Santam told The Citizen that cars and properties being rented out are not covered under Personal Lines (PL), but if you cover your car under PL, and it gets into an accident, or is stolen while being rented out or having a passenger who paid money, the insurance company won’t pay.
He said people who rent out their properties must cover them under business insurance because of the additional cover available related to liability of the occupants, which is excluded on PL, as well as limitations to theft and malicious damage, but it is not compulsory.
Pierre Hills, Senior Underwriter: Motor Broker Solutions at Commercial Lines (CL), said Commercial has a similar exclusion as indicated below by PL when it comes to hiring out vehicles.
“However, if a client declares this use upfront, we can decide if the type of hiring out is an acceptable risk and underwrite the policy by means of specific underwriting conditions and a correct premium to match the risk. If the hiring out is not disclosed and a loss occurs whilst a guest is hiring the vehicle, the claim may be rejected.”
NOW READ: Car renter, beware!
About the Author
