Renting shells, programs / software, and other stuff

[vicky_molokh]

Greetings, all!

Traditionally for an RPG book, Transhuman Space lists prices for buying stuff. However, what about renting it? E.g. for a travelling Infomorph, it makes sense to rarely own shells in the destination city.

Likewise, some types of software are quite expensive, but are not necessary for people to own full-time. In this cases, what would be an easy way to derive the per-unit-of-time subscription cost based on purchase cost? Not talking about trial version, but about actual rental of software.

Then of course there's the issue of [air]cars for someone who spends very little time on Terra.

Renting out AIs (particularly derivatives that have a Mindshare and thus exchange their experience, improving all AIs in a group) seems like a particularly neat trick for a business. There's also a category of corporations that do the same with bioroids (in the Deep Beyond, and maybe in the Well too; not sure about Terra).

I remember seeing somewhere that it's typical for rental to equal to the price of the item over the course of 5-10 years. Is that the right ballpark for the calculation?

Thanks in advance!

[johndallman]

Originally Posted by vicky_molokh

I remember seeing somewhere that it's typical for rental to equal to the price of the item over the course of 5-10 years. Is that the right ballpark for the calculation?

The way to estimate this is:

How long will it last in rental use, given that people tend to be less careful with rented equipment?

What does it cost to buy and maintain for that period?

What proportion of the time will it actually be being paid for?

Now you know how much money you need to take in, and how many hours/days it will be rented for. Five years at 75% utilisation seems plausible for cars.

If you're a large business doing this, it may not be worth paying some other company for insurance. If you have 1000 cars that you rent out, and 10 or so of them will be crashed and written off every year, the insurance premiums will be more than the costs of replacing those cars - so just buy new ones when you need them.

Make sure that you require the customers to buy insurance for the things they'd be liable for. Probably through you, with a markup that's part of your income.

Many jurisdictions seem to have laws that make leasing equipment very tax-efficient. A rental company may use something like that to get the equipment it rents out.

[Anthony]

Originally Posted by vicky_molokh

I remember seeing somewhere that it's typical for rental to equal to the price of the item over the course of 5-10 years. Is that the right ballpark for the calculation?

That's a reasonable to high estimate for something that will be in continuous use, gets rented for extended periods, and retains its value well -- such as an apartment. It's not going to be very accurate or useful for most of the goods you mention.

[vicky_molokh]

Originally Posted by Anthony

That's a reasonable to high estimate for something that will be in continuous use, gets rented for extended periods, and retains its value well -- such as an apartment. It's not going to be very accurate or useful for most of the goods you mention.

Any reasonably playable way to break down the various rentals into categories to make it possible to easily eyeball the buy-cost-to-rent-cost values?

[Phil Masters]

I'd just look up some car rental rates and on-the-road purchase prices, and derive a ratio from that. Cars and cybershells will have similar characteristics as commercial rentals.

[Eukie]

Originally Posted by vicky_molokh

Any reasonably playable way to break down the various rentals into categories to make it possible to easily eyeball the buy-cost-to-rent-cost values?

I looked up the cost of renting a car in New York City (the first US city I could remember the city code for), at the first available date (21 January), in the Economy class, and it was about 63-71 USD/day.

The cost of a good and price-efficient Economy class car seems to range from 10,000 USD to 25,000 USD, so an Economy class car will pay for itself in somewhere between 140 and 400 days. Roughly, this makes the per-day price between 0.25% and 0.71% of the total cost.

For an Economy-class car, in NYC, the 21st of January 2014.

[Anthony]

Originally Posted by vicky_molokh

Any reasonably playable way to break down the various rentals into categories to make it possible to easily eyeball the buy-cost-to-rent-cost values?

It's not entirely a function of buy cost to rent, rental businesses have to cover things like the actual cost of running a storefront (this mostly matters for short term rentals), but in general what you want to know are:

• What interest rate is the rental company paying?
• How fast does this thing depreciate? Note that this often depends on how the thing is used, which is why rental cars have a per-mile cost.
• What percentage of the time will the thing be sitting unused in the lot?

In addition to this, but often as a separate fee from the rental itself, will be the issue of 'what happens if the thing is lost, damaged, stolen, or involved in an accident or criminal activity'. In many cases this is actually handled by the insurance of the person doing the renting, but the rental company will want some up-front guarantee that they'll actually get their money.

A typical generic cybershell can probably use the being paid off in 5-10 years model. The problem comes with things that have seasonal demand (meaning it sits on the lot for months at a time) or extremely low demand (meaning the number available for rent is very low). In the first place, rental rates during the normal season will be considerably higher and might require a long waiting list or simply be unavailable (and may be much lower off-season), in the second place, you might have to pay transport costs and wait for it to be shipped from its current location to where you want it.

[ClayDowling]

You might want to look at the Software as a Service model, or what is now called Cloud Computing, as a way that software would be rented. My guess is that except for essential utilities or extremely sensitive software, most people wouldn't buy any more than they absolutely needed, and would instead just hire it as a service.

[vicky_molokh]

Just found that a cybershell worth $36k-$135k (depending on computer) is rented out at $35/day (ITW86). Which means at most 0.1% per day, possibly as low as 0.02% per day. That's somewhere between roughly 3 and 11 years for a shell to pay for itself (not including maintenance). Assuming almost daily use (which a Venus walker probably isn't).

I suppose this means that renting shells while travelling by beam is so cheap that it can be folded into CoL even for Status 0 infomorphs.

[Phil Masters]

Originally Posted by vicky_molokh

Just found that a cybershell worth $36k-$135k (depending on computer) is rented out at $35/day (ITW86).

Single data points are dangerous. For example, that hire cost may be underwritten by someone for some reason.