Updated: HiGear, a peer-to-peer car sharing startup that focuses on luxury and sports cars, has raised $1.3 million in a seed round from a group of venture and angel investors, HiGear President Murtaza Hussain told me in an interview. Investors include Battery Ventures, BV Capital, and 500 Startups, and angels like Craig Sherman, a Zipcar angel investor,
Thomas Ryan, CEO of Threadless, and Kevin Chou, CEO of Kabam.
HiGear launched just two months ago, and has a network of about 200 cars that are being actively rented out to members of the network who pay prices anywhere between $125 to $600 a day to drive the cars. You can find some real fancy cars like a Dodge Viper ($600 a day, photo to the right), a Mercedes Benz SLK ($245 a day), and a 1965 Ford Thunderbird ($100 per day). HiGear provides up to $1 million in insurance and has stringent conditions for its drivers, like no DUIs in the past five years, no accidents in the past three years, and drivers under 30 can’t rent cars that have more than 300 horse power (bummer for the Valley’s underage wunderkind).
While there are a variety of peer-to-peer car sharing companies trying to build businesses out there, like RelayRides and Getaround, HiGear has taken an alternative — and possibly more lucrative, in the short term — approach. Getaround and RelayRides are focusing on renting out neighborhood cars for rates like $5 to $10 per hour, and many drivers use them to make small trips around town or half day trips out of town on a weekend.
In contrast Hussain tells me that the average HiGear rental is for 3 days, for about $410, and drivers are renting out their cars about twice a month. In essence the cars don’t have to be used all that much to help the car owner make some money, because the rates are higher and are per day (instead of per hour). HiGear’s members are mostly pretty well-off themselves, and include many professionals that already have cars of their own but that want to drive different sports and luxury cars.
HiGear is also different in that the car owner has to meet with the renter (often times in a public place) to exchange keys in person, and to make sure that the renter knows how to drive the car (many of the sports cars are manual). So HighGear doesn’t install the automated locking and unlocking devices in the car like RelayRides does (or Getaround has with a kit). That brings down HiGear’s costs, too, as installing devices in every car in the network can get expensive. Hussain told me HiGear looked into installing the automated devices, but stopped that plan because car owners wanted to meet with the drivers in person to “feel them out.”
Hussain tells me that HiGear will use the newly-raised funds to keep building out its website and bring in more members, including launching in LA in the coming weeks.