WhipCar is not the new kid on the block. It has been around for about two years and in that time many car-sharing startups have staked a claim in the peer-to-peer ground transportation space.
The difference is that WhipCar users borrow their neighbour's car while with most others you share someone's car while they're in it.
Founders Vinay Gupta and Tom Wright see enormous potential in the market and quote the 30 million passengers cars in the UK which on average are only used 4.6 hours per week. They add predictions from analysts Frost and Sullivan which estimate a multi-billion market in the next few years.
In the two years since launch WhipCar has built up a team of 12 including founders. Funding for the venture has so far been £1 million from Delta Partners. WhipCar earns revenue from charging 15% (+VAT) of the car owner's rental price as well as charging the driver a £3 transaction fee per booking.
WhipCar says its the largest neighbour-to-neighbour car rental service although since its launch a number of similar businesses have sprung up around the world. It currently believes traditional car rental and car club models are complementary but as peer-to-peer behaviour continues to catch on these services will face an increasing threat (especially in less densely populated areas).
Q&A with co-founder Vinay Gupta:
How is the way you are solving this problem more special or effective than previous attempts you or the market has seen before and how different do you have to be to succeed?
When we started, we were a world first. What’s special about WhipCar is that we bring people together. We match car owners who might not use their vehicles for periods of time, with drivers in the local area who need to borrow a car. For the owners, it’s a great way to earn some extra cash when their car’s not in use and for drivers, they have a choice of cars at their disposal, all a short walk away and available at great rates. Borrowing directly from a person rather than a company has a real neighbourly feel to it. Trust is built up and relationships are formed.
Why should people or companies use your startup?
Locality. UK-wide we now have more than 19,000 cars available to rent and in London alone, 90% of people are within a ten-minute walk of a WhipCar - and the rates are typically cheaper than traditional hire companies. For car owners, renting out your car is a great way to cover the running costs of one of your most expensive assets. We get a lot of feedback that our customers appreciate the social aspect of what we’re doing, too, and the fact that it allows them to use resources more responsibly and efficiently.
Other than going viral and receiving mountains of positive PR, what is the strategy for raising awareness and getting customers/users?
Word of mouth is key for us, as a lot of people using WhipCar found out about it from a friend. We find that the key step is to get people to try it just once, so that they can overcome any reservations. We have also been stepping up our marketing activity to ensure that the message is getting out to consumers en masse.
What other options have you considered for the business and the team if the original vision fails?
We learn from our customers every day and continually iterate the service to meet their needs. Startups have to be nimble to succeed and we are no different. We’ve done a great deal of competitive benchmarking and we believe we’ve created the best peer-to-peer software technology regardless of vertical, so we have a lot of options.
What mistakes have you made in the past in business and how have you learned from them?
We make mistakes every day. The important thing is to improve quickly and be accountable when things go wrong. We’ve learned that customers appreciate a conversation and are more than willing to help improve things, especially for something that they see real value in.
What is wrong with the travel, tourism and hospitality industry that requires another startup to help it out?
People are changing their behaviour and the travel industry needs to adapt to where customers are going. In the UK, since 1992 there has been a 20% reduction in the number of under 30 year olds who have a driving license. In the US, in 1988, 44% of 16 year-olds obtained their driving license (the first year they could do so). By 2008, this fell to 30%. These are not dips, they are long term trends. People are valuing access to services much more so than owning assets outright. We are helping to change the way you think about a car. Until now it has been a product. Because of WhipCar it is now a managed service.
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Tnooz view:
There's no doubt peer-to-peer marketplaces are hot right now especially in ground transportation. Tnooz has highlighted quite a few in recent months - GoCarShare (Tlabs here) and Carpooling (Tlabs here) to name just two. And, there are others on the way.
The green angle also continues to be topical and is one that many players are currently pushing.
If, as the founders point out above, traditional car rental and car clubs get squeezed as peer-to-peer marketplaces take hold then the neighbour-to-neighbour idea could flourish.
It does have its limits however. There are many people out there who would just not want to rent out their car to others, it's just too personal and precious to them.
Then there's the reliability factor - what if a business traveller turns up to borrow a neighbour's car, he/she has to pick up colleagues or clients and the vehicle is not clean enough. Or, the car comes back with a scratch which the driver denies responsibility for. It could all lead to some un-neighbourly friction.
And, what of the insurance and tax issues that are being raised as peer-to-peer concepts increase in popularity. These are all issues that need to be hammered out if marketplaces are to thrive.
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