Photo: .curt via Flickr
California based luxury carshare service HiGear will be closing its doors for good.Originally a success, TechCrunch is reporting that the company became a target of criminals, with $400,000 worth of vehicles being stolen.
With a business model much like ZipCar, HiGear rented their cars for short periods of time to their clients. But instead of Toyotas or Subarus, HiGear specialised in luxury makes like Aston Martin and BMW, among others.
However, unlike ZipCar, HiGear was peer-to-peer. They did not actually own any of the cars and instead the owners would register with the service and rent out their vehicles to customers.
HiGear used a very selective process to approve drivers for the rental cars. Each customer needed to pass a credit check as well as a comprehensive check of their driving record. They charged a security deposit to members and many of the higher end cars even had rental rates that could top $1,000 per day, making them cost prohibitive.
They were available in San Francisco with plans to expand throughout California and the Northwest.
But those safeguards could not stop a group of thieves from taking advantage.
By using stolen identities to get approved and stolen credit cards to pay the fees, the criminals ripped off four cars worth around $400,000. While some of them have been recovered and returned, HiGear has realised that the inherent risk these criminal organisations pose to their business model is too high to continue.
HiGear has immediately suspended operations and rentals and they will be sending out a letter this week to notify their customers of the shut down.
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