I would argue that anybody trusting their watch to your service would want assurances that their watch wouldn't get trashed True but there can be different levels of assurance, most people will opt for high or mid tier but the bottom tier should be there so that the service appears cheaper than it really is.
That means you're carrying insurance you can cover a lot of the damage through self insurance and repair, if you cant get fraud/damage down to the point where you can cover it you go BK because the model isnt viable anyway.
More than that, if the watch is going out to unknown owners regularly it's going to need some regular maintenance It will, but in my model its up to the owner to decide how that happens. Its another hidden cost/fee that you can take care of as a service. The same way CARE.com will do payroll or VRBO has cleaning partnerships.
. You're also not going to get high school kids to clean, like, a $1500 watch; you can do more damage in cleaning it than you could leaving it alone if you don't know what you're doing so at a minimum, you're discussing semi-skilled labor simple operations can be done unskilled, if you need to polish the glass that's probably up to you. High school kid is unlikely to do $1500 in damages to a $1500 watch so then you are looking at 200-500 and that's a reasonable risk to take as long as it doesn't happen very often.
Look I'll be honest my model is mostly viable because there is a lot of cost shifting going around. You are renting out other peoples stuff taking transaction fees in the process and then steering your customers to use all your secondary services. Its dot com bullshit 101 except there is a second profit entity (the service center) that feeds off the the website, provides a competitive advantage and acts as a barrier to entry. The service center is the core profit operation, the rental website is just there to drive customers in for high profit services. If you had to bare all the costs of depreciation, capitol maintenance, damage and fraud there wouldn't be much left for profit but if you shift some of these costs out (as the watch owners are already incurring some of these costs) then the model looks a lot better.