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Millions of people in the world have given up owning cars and have opted to join car sharing networks, which can make transportation more efficient and potentially cheaper, parking easier, and traffic lighter in cities. Will companies and cities join in the car-sharing craze? Startup Local Motion hopes so, and on Wednesday it announced that it’s raised a $6 million Series A round, led by venture capital heavyweight Andreessen Horowitz, to grow its staff and customer base.
Steven Sinofsky, the former head of Microsoft Windows business who just joined Andreessen Horowitz, has also joined the company’s board.
Local Motion — which counts Google (s GOOG) and the city of Sacramento as some of its bigger clients — makes software and hardware that enables companies and organizations to share a fleet of vehicles. The company is three years old, and actually started out its life building electric car technology, but over the last year has pivoted towards car sharing tech. Clearly its investors think that was a good call.
Local Motion installs its connected hardware in customers’ cars (at no upfront cost to the owner) and customers pay a monthly fee for the service. The customer can use a web portal to track data about fleet utilization and optimization, and the system can also offer apps for drivers like recognizing the driver and customizing the experience.
The result is that a company like Google can have its own Zipcar-style reservation and mobile phone or badge-unlocking systems. Cities like Sacramento — and Local Motion is in discussions with Las Vegas’ Downtown Project, too — can have hundreds of cars that they need to keep track of on a tight budget. For now, much of this is done manually, without a lot of transparency.
Local Motion’s co-founder Clement Gires — who spent time working on Paris’ famous bike-sharing network — tells me that his company’s car sharing tech can quickly help their customers save money and better utilize cars. Better, more convenient use of cars can mean easier access by employees (so happier employees), but also more efficient use of fuel (potentially lower fuel costs). Transparency of company and public assets is important, too, when running a business or city.
Another side perk of the system is that the car sharing tech can help the company bring electric vehicles into the network. The software and hardware can determine if the cars’ routes are regular enough for EV driving and charging and figure out if (and how much) money the company will save if they switch cars over to electricity.
Gires tells me that they’ll be using the venture capital money to expand staff to potentially 25 by next year, and the startup is hiring employees like electrical engineers, module and mobile developers, web and app developers, and marketing and sales people.
All of this innovation in the car sharing space has been spurred by the dropping costs of the wireless networks, computing and mobile hardware that have to be installed in the car. In addition, the rise of the smartphone as a device that can be used to lock and unlock doors, or reserve a car, has emerged as an obvious way to manage cars. These car sharing systems wouldn’t have been cheap enough or convenient enough 5-7 years ago.
In fact, a lot of other companies throughout the years have tried various ways to use connected wireless devices in cars to make company fleets better — but a lot of them have been kludgey and expensive. Cellphone companies early on sold corporate tech that enabled cellphones to manage company cars and trucks (remember iDEN?). Startup Green Road has built a business off of selling connected hardware and a service for corporate fleets that gives real-time feedback to drivers and tries to teach them to be better drivers.
The connected car will be an area of significant innovation over the next few years as startups and big companies alike figure out how to make cars more efficient and smarter, and create in-car data systems that will deliver new types of content and services.