Rental markets in everything

by on October 17, 2012 at 1:15 pm in Economics | Permalink

FlightCar aims to put vehicles left in airport parking lots to use by offering them up for short-term loans.

Does this increase in the velocity of goods require a monetary policy offset?  Here is more, hat tip goes to David Wessel.

Ray Lopez October 17, 2012 at 4:17 pm

OMG, this reminds me of the following joke: http://www.barrypopik.com/index.php/new_york_city/entry/parking_joke/

James Oswald October 17, 2012 at 4:25 pm

Does this increase in the velocity of goods require a monetary policy offset?

If you don’t have a target in mind, you can’t say how the central bank should respond. Under a Selgin productivity norm, no response is required. Under inflation targeting, it would trigger expansionary policy and the rental prices for cars dropped due to the increased supply.

Sam October 17, 2012 at 4:28 pm

But ngdp has increased with the new transactions.

James Oswald October 18, 2012 at 1:21 pm

This is a supply shock, so the effect on NGDP is ambiguous. Under an NGDP targeting regime, it would be likely that the response would be contractionary. Counter Saturnos, I see no reason to believe that they would not be counted as NGDP. Surely FlightCar would have to report their earnings from this to the IRS.

Saturos October 18, 2012 at 12:23 am

No, these rentals are not part of GDP, hence money traded for them are not part of NGDP, hence it makes no difference to policy.

Andrew M October 17, 2012 at 8:30 pm

It’s an excellent idea. In the UK you can already rent your neighbo[u]r’s car, see e.g. WhipCar.com. Unfortunately, the standing pricing model for most car parks would interfere with this business model. Most car parks charge high rates for short-term visitors, on the basis that short-term visitors are the most time-sensitive and therefore the least cost-sensitive. Therefore if you park at the airport for seven days from, and somebody borrows your car for four days in the middle of that period, then instead of paying the low 7-day rate you’ll be paying the higher 1.5 + 1.5 day rates. Although you’ll save some money, the marginal saving probably won’t be worth the wear & tear on the car.

dan1111 October 18, 2012 at 2:21 am

It is not clear what the exact process will be, but the article says that FlightCar picks up your car, cleans it, and transfers it to the renter. It seems likely that they will be partnering with a car park or handling parking in some way.

dan1111 October 18, 2012 at 2:22 am

Also, this service is launching in the U.S., where, in my experience, airport parking is more likely to charge a flat rate per day.

freethinker October 17, 2012 at 11:26 pm

I do not live in the U.S so can someone explain how this system works?

Saturos October 18, 2012 at 12:28 am

You’re not the only one wondering…

Andrew' October 18, 2012 at 4:57 am

If Captain America wakes up from his ice tomb and finds out that instead of flying cars we have this “FlightCar” he’s going to kick our asses.

dead serious October 18, 2012 at 8:46 am

This is nice on paper and all that but when the first car crash occurs or tickets/fines are incurred, things will get real.

aaron October 18, 2012 at 9:00 am

Having worked in the car rental business and seeing how people treat rental cars, I think I’ll pass.

Zoe Head October 21, 2012 at 11:27 am

This is insane. Everything has a price nowadays. People can’t even enjoy the treats anymore. Gone are the days when they offer so many things for free or cracking up good deals that are affordable. Prices rise everyday and so will problems.

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