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Will car sharing pioneer Zipcar (s ZIP) 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.