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Peer-to-peer car service FlightCar raises $13.5M

FlightCar allows travelers to rent out their cars at the airport while they are away

Financial trends and news by Steven Loeb
September 10, 2014
Short URL: http://vator.tv/n/3915

(Updated with comment from FlightCar)

When someone goes out of town for an extended period of time, and they leave their car at an airport, I look at that and see it as a waste of money (seriously, for the amount you are going to be paying to have your car sit there you could have just taken a cab!) When Peer-to-peer car sharing company FlightCar looks at that, thought, what they see it as a money-making opportunity.

The company allows car owners, who would otherwise be leaving their vehicle at the airport for long stretches of time, to instead rent their cars out to other travelers. And now it has raised $13.5 million in new funding to bring that service to more airports around the country, it was announced on Wednesday.

The round was led by GGV Capital, with Comcast Ventures and existing investors, including General Catalyst, SoftBank Capital, and First Round Capital, also participating.

FlightCar had previously raised $6.5 million, most recently picking up a $5.5 million round in April of 2013. The company has now raised a total of $20 million in funding, and, according to the company, that makes its two co-founders, Rujul Zaparde, who is only 19 years old, and Kevin Petrovic, who is 20 years old, "the youngest entrepreneurs ever to have raised $20m in total venture capital."

Founded just 18 months ago, FlightCar is a service that allows car owners, who would otherwise be leaving their vehicle at the airport for long stretches of time, to instead rent their cars out to other travelers. 

Here's how it works: For the owner of the car, all they have to do is list their car on the site, with information that includes the times they will be away, and the vehicle that will be available for others to use.

For cars that are available for a minimum of 30 days, the owner will receive between $200 and $500 per month depending on the make and model, whether ther car is rented or not. For shorter periods, the car owner parks for free, and gets paid 50 cents cash per mile if the car is rented.

The average vehicle owner on the average trip makes about $30 50, Petrovic told me in an interview but, "the real value is in the parking savings, which can be around $130 for the same trip."

The car owner gives FlightCar a copy of their insurance and registration cards. In return they get an insurance car that protects them for up to $1 million worth of potential damage. FlightCar sets the price of the rental, and can only list vehicles that are registered in a US state or any Canadian province, and cannot accept vehicles registered in any other country right now.

To rent a car on FlightCar the person must be at least 18 years old; those under 25 can only rent vehicles that have a market value of less than $30,000. They can't have any Major Violations on their record in the past three years, and no more than two violations or accidents in the same amount of time. Those under 21 cannot have any.

Those under 22 must pay an "underage fee," which depends on their age: 18,19, or 20 year olds will pay a fee of $25 per day in addition to their rental. 21 year olds pay a fee of $10 per day. Renters will also be charged an additional $10 fee, along with the market price of the missing fuel, if they do not return the car with the same amount of gas in which they found it. 

There are a few companies out there "who have copied our business model," Petrovic said, "but right now we are about 10 times larger than the next biggest one. We just focus on constantly improving our service and product to maintain our advantage."

In addition, he said that FlightCar is the only service that offers guaranteed free parking, regardless of if the car being rented or not, and regardless of the duration of the trip.

"We also are the only player of offer black car transportation to/from the airport, as opposed to a shuttle," he said

The San Francisco-based FlightCar is currently available in three airports: San Francisco International Airport, Boston’s Logan Airport and Los Angeles International Airport. The company says it will use the new funding to continue expanding, first to Seattle-Tacoma International Airport and then to "more cities in the coming year."

"We plan to be very aggressive about expansion and are hoping to bring the service to many markets. We're not offering specifics at this time," Petrovic said.

When I asked if the company has any plans for international expansion, he told me, "Right now we at focusing on the US since there are so many more airports we can expand to. But we are always looking at opportunities!"

Ultimately, FlightCar's goal is to build a community of renters and travelers, who can each help each other.

"We want to build a service where travelers can park their car on one end of their trip and rent a fellow traveler's car on the other end. This community will be really powerful and will enable more trust on both sides of the table."

In addition to the funding news, it was also revealed that Hans Tung, Managing Partner at GGV, will be joining the board of directors at FlightCar.

The sharing economy

A company like FlightCar is prime example of the rise of the sharing economy, which refers to a group of companies, most of which have emerged over the last five years or so, that have upended traditional payment methods to, instead, rely on peer communities in which participants share access to both products or services.

Overall, the market that is estimated to have been worth $110 billion in 2013, and the peer-to-peer rental market alone was said to be worth $26 billion

The space includes companies that allow people to share their apartments, like Airbnb; share their clothes, like Rent the Runway; or even their children's toys, like Pley.

The closest to what FlightCar does is RelayRides, another peer-to-peer car sharing service, though one that does not only have cars available when they are out of town.

"We definitely consider FlightCar part of the sharing economy. I think the sector is growing fast as more and more people become comfortable with sharing," said Petrovic. "Technology is playing a huge part of this growth and transformation, as it is enabling more trust and transparency. We want FlightCar to be a leader in the space, innovating and introducing new people to these new concepts."

(Image source: flightcar.com)


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