In the near future, owners of GM vehicles in California will have the opportunity to rent their cars for a short period of time to other individuals. Who will actually post their vehicles to be rented, and what individuals will actually end up renting the vehicles?
As income decreases for a person, the probability that the person will rent a new car (as opposed to purchasing a new car) increases. That being the case, what kind of individuals will actually rent out their new car to someone else? For those people that can afford new cars, why would they want to rent out their cars for a fairly small amount of income as opposed to just keeping the cars to themselves?
This article brings to light the concept of inferior and normal goods. If everyone had enough money to purchase a new car, there would be little to no need for the rental service. So in this case, the rental service would be an "inferior" type of good or service, whereas the new cars would be considered "normal" goods (since the demand for new cars will increase as income increases).
It will be interesting to see how GM's new strategy plays out. The article mentions this plan could provide an opportunity to test drive a Corvette, but who would rent out their new Corvette for $10 an hour? Vice Chairman for Corporate Strategy at GM Stephen Girsky says in a seemingly skeptical manner, "We don't know if it is going to work or not."