GigaOM » Wheelz

RelayRides buys up car sharing startup Wheelz for the tech

Katie Fehrenbacher — Tue, 14 May 2013 14:55:23 +0000

With a still small, but growing, market around people that want to rent out their personal cars to their neighbors, some consolidation seemed inevitable. On Tuesday startup RelayRides, which was one of the first companies to jump into the neighborhood car sharing market, announced that it has acquired Wheelz, a startup that had originally focused on building car sharing communities at universities.

RelayRides says it will acquire, among other things, Wheelz’s DriveBox technology, which enables Wheelz users to unlock and drive away in a rented car, without having to meet with the owner and get a key. Picture it basically like one of Zipcar’s unlocking and verification systems.

When RelayRides launched its business, it used to install this type of unlocking and verification technology in the users’ cars, but the installation process was lengthy and expensive. Later RelayRides started working with GM on connecting this type of system with GM’s Onstar technology. However more recently, RelayRides started opting for manual key swapping as a main option.

RelayRides staunch competitor Getaround launched its service around a box that car owners install in their cars themselves and which renters can use to automatically unlock cars using their smart phone. With Wheelz’s DriveBox tech, RelayRides can get back into the business of making car swapping more automated and easier for customers.

RelayRides has raised $13 million from Google Ventures, August Capital, General Motors, Shasta Ventures, and General Motor Ventures. Wheelz has raised at least $14 million from Zipcar and Detroit-based transportation investors Fontinalis Partners. The companies wouldn’t release terms of the deal.

The market for this type of peer to peer car sharing is still very early. Also execution and making people feel comfortable with the systems is key to growing this industry.

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Zipcar continues European expansion, buys Austrian car sharing company

Katie Fehrenbacher — Wed, 11 Jul 2012 10:00:41 +0000

Car sharing company Zipcar has acquired a startup in Austria to help expand its presence in Europe, Zipcar’s CEO Scott Griffith tells me. Denzel Mobility CarSharing, which goes by the name CarSharing.at, has 10,000 members in Austria and 200 cars in its fleet. Terms of the deal were not disclosed, but Griffith says the deal does not have a material impact on the company.

This is Zipcar’s third strategic move into the European market through acquisition or equity investment. Zipcar bought London-based Streetcar in 2010, and late last year took a majority stake investment in Barcelona-based Avancar. Frost & Sullivan has projected a $3 billion market for car sharing in the European Union alone.

Griffith told me in an interview that Zipcar has been watching CarSharing.at for about 6 months as it captured market share in Austria. Vienna is a particularly important market for Zipcar’s expansion into Europe, said Griffith, and with Vienna, Barcelona and London, “we have three cities and a deliberate strategy to replicate our network in North America in Europe.” Zipcar will begin using the Zipcar brand for CarSharing.at users by the beginning of next year.

While European expansion is Zipcar’s primary goal right now, expanding into Asia is a more “medium term” plan, and Griffith said Zipcar would likely create a partnership if it expands in Asia. “In Europe we want to be the operator and owner of the network, but we feel differently about the market in Asia,” said Griffith.

Beyond European growth, Zipcar has been looking into the peer-to-peer car sharing market — where car owners rent out their cars into the network — through its investment in startup Wheelz. Griffith told me that Zipcar is interested in peer-to-peer car sharing for two reasons: 1) peer-to-peer could expand the footprint of Zipcar users into markets with lower volume use, as Zipcar makes most of its money off of cars that are rented out a lot, and 2) peer-to-peer could also introduce more vehicles into a network when demand is high and the car fleet available is small.

However, Griffith also told me that peer-to-peer “as a standalone business is a tough model,” as “so much of the revenue is shared with the car owner.”

Zipcar has 700,000 members and 9,000 vehicles in its global fleet.

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Ups and downs for cleantech in Q1

Mon, 16 Apr 2012 06:55:41 +0000

The year 2012 may be remembered in the cleantech space as one of both hope and disappointment. Electric vehicles from the plug-in Prius to the Mitsubishi i to the long-awaited Tesla Model S rolled out, but disappointing sales mean the market may not have caught up to innovation. Acquisitions and investments chugged along in the smart-grid market, with Landis+Gyr’s acquisition of Ecologic Analytics and the anticipation of a Silver Spring Networks IPO that has not yet materialized. Meanwhile the quest for the low-power server continued in the green data-center space with AMD’s purchase of SeaMicro for $334 million. We examine these events and others in this report, which also provides a near-term outlook of trends and companies that will be important to watch in 2012.

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Why Zipcar is tapping the college market

Adam Lesser — Thu, 01 Mar 2012 12:56:52 +0000

This first appeared earlier this week on our subscription research service GigaOM Pro.

Zipcar’s decision last week to make a strategic investment in peer-to-peer car-sharing startup Wheelz surprised many. After all, when it comes to the debate over car sharing models, both sides of the argument — peer-to-peer vs. centralized ownership (Zipcar) — have touted their respective business models as superior.

But beyond the squabbling about whether peer-to-peer or Zipcar has a better capital structure, the investment tells us three other, more important clues about Zipcar’s overall strategy:

Zipcar is extremely intent on making college students a cornerstone of its strategy.
Zipcar can no longer ignore peer-to-peer car sharing as a strategic threat.
College students are a key demographic, not just to sell car-sharing services to but also as a demo to one day sell cars to. Part of this deal is to build a better relationship with not only customers but also automakers.

Wheelz is another way for Zipcar to access a young demographic, since the former distinguishes itself as a peer-to-peer car-sharing startup with its current focus solely on college campuses. It rolled out at Stanford and has plans for UC Berkeley, UCLA and USC. Similar to how Facebook first operated, users need a college email address to join, and the login process even uses a Facebook login. The company believes that closed social networks have the greatest potential because of the built-in trust factor that could matter when loaning one’s car to strangers.

Zipcar CEO Scott Griffith recently told the New York Times’ blog that Zipcar opted not to build its own peer-to-peer car-sharing service because it would rather learn the technological details of working with an owner base from a partner. And while there was certainly a part of Zipcar’s investment that was a defensive move just in case peer-to-peer car sharing prevails as the preferred method of sharing cars, there was one other reason people tend not to think about when discussing car sharing: Zipcar’s potential to market to young people.

In the past six months, Zipcar has itself been intently focused on deploying its services on 250 college campuses with cars supplied by Ford. Car sharing is a way to get cars in front of future customers, and you want to do that as early as possible, because once car owners become brand loyal, it is tough to change those loyalties. Cadillac owners rarely switch to buying Lincolns in their fifties, for example.

And so it is not a coincidence that the other investor in Wheelz is Detroit-based Fontinalis Partners, which is co-managed by the executive chairman of Ford Motor Company, Bill Ford. Adding to the love affair, William Helman IV, a partner at VC firm Greylock Partners and the lead director on Zipcar’s board, became the 15th member of Ford’s board last September.

The under-25 crowd historically has been largely ignored by the rental car companies, and often due to young people’s limited incomes, the automakers could only do so much with the demographic. But car sharing is changing that, offering the driving experience to anyone with a license. And the opportunity to gain greater access to college students’ behavior surrounding car sharing and to put cars in front of them that one day you want to sell to them becomes increasingly attractive. This is why the automakers are aligning themselves with car-sharing companies. GM has a deal with RelayRides to make all GM vehicles built after 2010 and equipped with OnStar rentable in the RelayRides peer-to-peer car sharing system. BMW, Daimler and Volkswagen have either rolled out or are trialing their own car-sharing services.

What is unique about all of these growing relationships among automakers, traditional car-sharing companies and now peer-to-peer car-sharing startups is that the 800-pound gorillas in the room — the automakers — ultimately need to sell cars, not participate in an industry that research shows reduces car ownership. The fact that automakers aren’t fighting the car-sharing phenomenon the way the hotel lobby has fought Airbnb and the music industry fought Napster back in the day suggests a certain maturity in their outlook.

Car sharing is a byproduct of the Internet age (you need online social networks to find and share cars), and if the automakers can build partnerships and exploit the emerging business model to better understand young consumers and make strategic investments in and partnerships with the best car-sharing companies, be they Wheelz or Zipcar, then they start to become part of the emerging ecosystem. That continues to give them access to young drivers and encourage driving as the ultimate transportation experience. College campuses are a great place to start.

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Why Zipcar is tapping the college market

Adam Lesser — Tue, 28 Feb 2012 14:00:55 +0000

Zipcar’s decision last week to make a strategic investment in peer-to-peer car-sharing startup Wheelz surprised many. But Wheelz is another way for Zipcar to access a young demographic, college students, which it has been courting for some time as a way to build its relationship with not only customers but also automakers.

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Zipcar backs peer-to-peer car sharing startup Wheelz

Ucilia Wang — Wed, 22 Feb 2012 16:37:20 +0000

Will car sharing pioneer Zipcar move into the emerging industry of peer-to-peer car sharing, or enabling neighbors to rent out other neighbors’ vehicles? Well, Zipcar hasn’t launched such a service, but it’s invested in one of the new peer-to-peer car sharing startups Wheelz, the companies announced on Wednesday.

Wheelz, which only launched last September at Stanford University, has raised a Series A round of $13.7 million from Zipcar as well as Detroit-based transportation investors Fontinalis Partners. Other peer-to-peer car sharing startups like RelayRides and Getaround have also found major backing from venture capitalists and auto companies.

While Zipcar buys and owns (or leases) its own fleet of cars for sharing, Wheelz is promoting the use of other people’s cars. Wheelz also is targeting a narrower audience to start: college towns and connecting students who have cars with those who don’t but need them. The idea is to provide money-making opportunities for students, many of whom don’t need their cars often if they live on or close to campus, while making it easier for those who need rides for trips to, say, grocery stores or weekend outings.

Wheelz joins a growing number of companies promoting the idea of collaborative consumption, which refers to the use of the web for sharing goods and services (see GigaOm Pro’s analysis of the trend). It maximizes the use of stuff, while reducing clutter and waste. The concept works not just in sharing cars but sharing living spaces and has spawned a series of startups across verticals, such as RelayRides, thredUP and Airbnb.

While car sharing isn’t mainstream, it has gotten enough traction among consumers, particularly the younger urbanites, to spawn at least a dozen startups in cities around the world. Peer-to-peer car sharing especially has caught the fancy of investors and entrepreneurs, and there were at least five peer-to-peer car sharing businesses here in the San Francisco Bay Area alone as of last fall. The business model also arguably involves more logistics and liability issues because the companies don’t own the vehicles and must ensure that both loaners and borrowers are happy with the service.

Right now, car sharing services like those from Zipcar and City Car Share tend to offer members the ability to rent cars in 15 minute integrals, and cars are parked around urban areas, can be unlocked using a key fob, and can be reserved on the web or a cell phone. In addition, car sharing services often include fuel in the service fee. In contrast, more traditional car rental businesses tend to rent cars through actual stores, mostly rent cars only during business hours, and most of the time, don’t include fuel in the price.

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Green IT Q3: Solar stumbles while car sharing zooms ahead

Mon, 10 Oct 2011 07:01:00 +0000

The trials and tribulations of the solar industry dominated the third quarter as warnings about a storm of dangerous market forces in the industry finally reached an outcome with Solyndra’s bankruptcy. But not all was dismal for the cleantech industry during the quarter. Car sharing continues to reduce resource consumption, and much capital flowed to that sector. On the data center side of the industry, Google provided insight into exactly how much energy the tech giant uses, as well as the carbon footprint of its data centers. Companies mentioned in this report include Solyndra, Zipcar, Airbnb and Silver Spring Networks. For a full list of companies, and to read the full report, sign up for a free trial.

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A cheat sheet of peer-to-peer car sharing players

Katie Fehrenbacher — Mon, 10 Oct 2011 01:00:39 +0000

Two peer-to-peer car sharing startups have launched in the Bay Area in recent months (there’s at least five here now), and there’s now four peer-to-peer car sharing companies in France. Yeah, it looks like a bubble, but the amount of drivers and car owners in these networks is actually really small. There’s room for quite a few players as these companies figure out market strategies, marketing and mobile apps.

Peer-to-peer car sharing (sometimes called distributed, neighbor-to-neighbor and car sharing 2.0) facilitates car renting between personal car owners and a network of interested renters. In contrast, for standard car sharing from ZipCar or CityCarShare, the organization owns the fleet of cars.

Probably even more companies will launch P2P car sharing services in the coming months, with new ways to target already-existing communities, and eventually the market will face consolidation. But in the meantime, here’s my cheat sheet of a dozen companies offering websites to facilitate peer-to-peer car sharing among neighbors.

Company	Location, founded	Investors	Differentiators
Buzzcar	France, launched March 2011	Zipcar’s co-founder Robin Chase, Mobivia Groupe	Buzzcar is focused on France and was started by the co-founder of car sharing 1.0 leader Zipcar.
CityzenCar	France, launched Jan. 2011	N/A	CityzenCar is focused on France and uses automated locking by a network of approved installers, creating a network of founder/car owners.
Getaround	Bay Area, San Diego, founded 2009	$3.4M, CrunchFund, Redpoint Ventures, General Catalyst + angels	Getaround sells a P2P car sharing kit that car owners install themselves and which can unlock car doors. It also has focused on its iPhone app.
HiGear	Bay Area, soon Los Angeles, launched Aug. 2011	$1.3M, Battery Ventures, BV Capital, 500 Startups and angels	HiGear focuses on car sharing of luxury and sports cars, and it doesn’t use automated locking systems.
Livop	France, Sept. 2010	N/A	Livop focuses on car sharing in France and uses key exchange.
RelayRides	Bay Area, Boston, founded 2009	$5M, Google Ventures, August Capital, in talks with GM	RelayRides installs the car tech itself, and it recently scored a partnership with GM around Onstar.
RentMyCar	Across the U.S., international, May 2001	N/A	RentMyCar is the oldest site out there but basically only acts as a middleman. No insurance, no automated locking system, no community element.
Spride Share	Came out of stealth in April 2010, pilot Sept. 2010, not yet commercial	Spring Ventures	Spride Share has an impressive advisory board, and the company was instrumental in getting insurance legislation passed in California.
Tamyca	Germany, launched Nov. 2010	N/A	Tamyca ~~was founded by Konrad Erzberger. S~~ stands for “Take My Car.”
Voiturelib	France, early 2011	Founded by Paulin Dementhon	Voiturelib focuses on car sharing in France.
Wheelz	Stanford campus, founded early 2011, launched Sept.	Angel-backed, Facebook early-exec-turned-investor Chamath Palihapitiya, Jim Freer, Sebastien de Halleux, Felicis Ventures and Red Swan Ventures.	Wheelz has a plan to focus on college campuses and launched at Stanford.
WhipCar	U.K., founded early 2009, launched 2010	Delta Partners	WhipCar is available in the U.K. and doesn’t use automated locking systems: Drivers/owners swap keys in person.

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Wheelz: Car sharing for campuses

Katie Fehrenbacher — Wed, 28 Sep 2011 15:58:37 +0000

The peer-to-peer car sharing space is getting crowded. On Wednesday a startup called Wheelz launched at Stanford University with the idea to bring student-to-student car sharing to campuses. Wheelz marketing exec Aaron Platshon explained to me that the company is “specifically targeting colleges and universities because there are dense social networks and high levels of trust” there.

Think of the strategy as similar to the way that Facebook was able to create trusted social networks at colleges before it spread elsewhere. And interestingly enough, Facebook early-exec-turned-investor Chamath Palihapitiya was the lead seed investor in the company, and other angel investors include Jim Freer, Sebastien de Halleux, Felicis Ventures and Red Swan Ventures. Wheelz, which has been under development since early 2011, has raised $2 million.

Peer-to-peer car sharing is a new model of car sharing where car owners rent out their cars by the minute or hour to other users in the network. Drivers can use mobile apps to unlock the cars and the web to reserve cars in nearby locations. In contrast, traditional car sharing companies like Zipcar and CityCarShare own and maintain the car fleets themselves, which can get pretty expensive. Traditional car sharing companies have struggled to be profitable because of the high cost of car ownership and maintenance.

The concept of P2P car sharing is compelling enough that there’s a handful of startups out there building networks, including Getaround, RelayRides, Spride Share and WhipCar, in the U.K. RelayRides is backed by Google Ventures and August Capital. Getaround has raised money from TechCrunch creator Michael Arrington‘s CrunchFund, Redpoint Ventures, General Catalyst and a group of angel investors including Netflix founder Marc Randolph and WordPress founder Matt Mullenweg (see disclosure). Spride Share is backed by Spring Ventures founder Sunil Paul and has an advisory board that includes LinkedIn founder and chairman Reid Hoffman, Zynga CEO Mark Pincus, UC Berkeley Institute of Transportation Studies director Dan Kammen and City CarShare CEO Rick Hutchinson.

For now, the amount of people actually using these peer-to-peer car sharing networks is so small that there’s room for a bunch of them. It’s likely that they will each grow in certain niches, neighborhoods and cities and perhaps down the road will merge or get bought by the traditional car sharing companies. The technology won’t be the differentiator — a mobile app and an unlocking mechanism can be pretty basic and commoditized. It will be marketing, market focus and business model that determine which of these companies draws in more customers.

That’s one reason why Wheelz is a potential player, despite that it’s entering the market later than the others. Carpooling company Zimrides took the same approach to focus on already-created trust groups at schools and businesses as their core market first and then only later moved to make its service more open to the public. As the security issues with Airbnb have shown, trust will be a major part of the web sharing economy, and companies that understand that early on will benefit.

Disclosure: Automattic, the maker of WordPress.com, is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, the founder of Giga Omni Media, is also a venture partner at True.

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