I recently wrote a post about collaborative consumption, a form of sharing anything from time, money, housing to skills that helps maximize the use of resources and reduce waste. There are many motivating factors to adopt such a model. One big reason is that it puts less pressure on the environment through less manufacturing; another is cost savings since second hand things are cheaper and another is that it is just good nature to share things, even with people you don’t know. RelayRides, based on America has a vision to revolutionize personal mobility “make carsharing a viable, common part of our system transportation will reduce reliance on personal car ownership, leading to fewer cars on the road and less driving.” I talked with Founder, Shelby Clark to find out how they will achieve this.
Like many great start-ups, RelayRides was started by a founder who experienced a problem themselves and wanted to solve it. The story goes something like this; Shelby Clark biked through a severe snow storm in Boston to try and reach the nearest car rental, but on his way, he realized there were so many idle private cars that could be available to borrow. RelayRides was born out of that epiphany a year and a half ago.
RelayRides is a platform for connecting people who need car to car owners who want to rent their car out for an hourly rate. This might sound like a strange concept, but it actually works. The cool part is after you have found the car you want, you won’t need the key; you will be able to use a smartphone to reserve, locate and unlock OnStar enabled cars in early 2012. Currently, adevice is installed into the car to control the card and the engine. The obvious concern is safety or someone stealing your car, but RelayRides has technology and insurance to minimize the risk of anything really bad happening.
For people that don’t want the burden of maintaining a car or spending thousands on fees and don’t need a car all the time, it makes sense. RelayRides calculated that the average cost of owning a car is US$715 but for RelayRides members who simply borrow cars, it only costs US$100. That cost saving speaks for itself, where the average hourly cost ranges from $5-9. For people renting out the car, it is a nice way to earn extra cash from doing nothing. On average, a renter can make US$250 per month plus feel good about taking an average of 15 cars off the road and reducing air pollution.
Car sharing requires sophisticated technology to safeguard what is usually a person’s second most valuable asset after a house. That’s why it’s not easy to clone. However the first time I heard of such a business was Getaround, which won TechCrunch Disrupt New York last year. Since RelayRides and Getaround are directly competing, I asked Shelby what advantage they have. “Besides predating Getaround, RelayRides has secured $13M (from Google Ventures, August Capital, Shasta Ventures and General Motors Ventures) to Getaround’s $5.1M. And RelayRides partnership with GM/OnStar will make the cars owned by the 6 million OnStar subscribers instantly “RelayRides ready,” so those owners can make their cars available to RelayRides borrowers in their neighbourhood, starting early this year. This is the largest move by an OEM into the carsharing space. Getaround has no such partnership.” Said Shelby.
Sharing books or clothes is one thing, but sharing your car must take a little more convincing. Shelby said “The mainstream has started to accept carsharing. We needed traditional carsharing to take off before a P2P model could succeed, so we owe a great deal of gratitude to the early pioneers of carsharing, like Dave Brook of Carshare Portland and Robin Chase of Zipcar. Gartner predicts that by 2016, 10 percent of the U.S. urban population will use shared cars instead of personally owned vehicles.”
So what actually motivates someone to lend their car? Is it the extra cash or being socially responsible? Shelby said “It’s a combination. The average car owner makes $250 per month, which really cuts into the various expenses of owning a car. Who doesn’t want to make a little extra money off their underused car? At the same time, owners who have signed up with RelayRides tend to be very passionate about social responsibility and contributing to their community. They genuinely like the idea that they are helping out someone who lives nearby. Both owners and borrowers love the idea of money going back into the local community.”
There are many reasons you would rent a car. For some, you may just need to take your kids to the park, for others you may want to impress a girl and opt for an expensive sports car. But usually “The most popular cars are reliable and affordable, so Toyota and Honda sedans are among the most common. That said, I expect the number of GM cars to increase dramatically as we launch our partnership with them early this year” said Shelby.
Since RelayRides is very privileged to be invested in and supported by Google Ventures, I asked Shelby what it’s like to be a part of the Google family. “Google Ventures is a unique investor as it understands its competitive advantage: it knows how to build a successful consumer internet Company and it has a huge workforce of very talented people. Joe Krauss, our board member from Google Ventures, is an experienced entrepreneur, having launched Excite (one of the first search engines) and another company called Jot Spot, which was acquired by Google. His experience and perspective is incredibly helpful. Further, Google Ventures has many resources that have been very helpful, such as a User Experience team that has helped us develop our product.”