Cincinnati, OH-based FlightCar, a peer-to-peer car rental service focused on air travelers, is gearing up to do a soft-launch of their service in the next few months. The company is looking to give vehicle owners a way to monetize their cars while they’re traveling by renting them to incoming travelers, in turn giving those traveling to a new city a way to rent at a lower cost than traditional car rentals.
The idea for the company, which is part of The Brandery startup accelerator, came about when two of the three co-founders struck up a conversation about the rise of the sharing economy and the wasted potential of cars in airport parking lots. “I had actually just read an article about the sharing economy, and about AirBnB and all these companies, and how if you own something, you can make some extra money off it,” co-founder and CEO Rujul Zaparde said in an interview. “And my cofounder does a lot of traveling and he says, if you think about it, all those cars at the airport are just sitting there, people are paying to have them to sit there, and there are so many other people who are coming in and renting other cars. Why don’t they just rent these other cars that are just sitting there anyways?”
The peer-to-peer marketplace will let owners of vehicles post the dates they will be out of town, relevant car information, the maximum and minimum compensation amount, and the airport they will be flying out from. Others flying into the same airport can then see the listings and request to rent the car. FlightCar does a background check and verifies a valid driver’s license and the individual’s driving history, and once the person passes FlightCar’s approval, the car owner can decide to accept or reject the rental request. The company also has $1 million in insurance in the event that something goes wrong.
Once a transaction is finalized, the car owner drives into a third-party partner parking lot close to the airport where they will be greeted by a FlightCar representative, who takes the keys will also clean the car. The company plans on leveraging existing shuttle services or providing their own to move owners and renters to and from the airports and parking lots. Incoming travellers then have their identification checked before they get the car at a 20-50 percent discount compared to traditional airport car rental services.
Although the car owner gets to propose an initial range for the cost of the rental, the company will have a dynamic pricing model that adjust the prices and rates based on a number of variables, including seasonality, demand, and duration, similar to air travel and other car rental services. Once the price is set and accepted by both owner and renter, FlightCar pockets 35 percent to cover operation and insurance costs, while the owner gets 65 percent after taxes, fees and insurance.
“The car rental pricing industry today is very complex, it’s like airline pricing, it changes by a lot and very quickly. We let owners of the vehicle give us a range they’re comfortable being priced at and we will work with whatever the market trends are, and pick the correct price based on vehicle type, number of seats and other factors,” Zaparde said.
Companies like Getaround, a popular peer-to-peer car rental service, are already looking to help vehicle owners monetize their idle cars when they travel, with the launch of their new service called Getaway. The service lets owners of vehicles idle for six months or more (either because of a long trip or other reasons) hand over the keys to Getaround, which then manages and maintains the entire rental process to let owners earn extra income. However, FlightCar is meant for short-term getaways, and their focus on connecting travelers to and from a specific airport, as well as the partnerships with third-party parking lots, could help give them a disruptive edge in the niche peer-to-peer rentals offered exclusively at airports.
After the upcoming soft-launch in Cincinnati, where the company hopes to iron out any kinks and test out the business model, it will be looking to provide its services as part of a larger roll-out in San Francisco. It’s also in the process of raising a seed round of funding. It will be interesting to see how travelers take to the service, which promises to provide value for both outgoing and incoming travelers, but will have to compete with both other startups and large car rental companies for customers.