A Startup Car-Sharing Service Is Eliminating The Competition


Startup peer-to-peer car sharing service RelayRides has acquired Wheelz, a smaller competitor, it announced early Tuesday morning.

The acquisition is a sign of RelayRides’ impressive growth since it launched in June 2010.

After it became available nationwide last year, membership has climbed 500%.

The service facilitates car rentals by connecting individual vehicle owners with potential renters, checking driving records, and providing insurance. It makes its money off a 40% commission from each rental.

RelayRides neatly sidesteps the biggest problem for Zipcar, the big name in the short-term car-sharing space, because it does not spend money to buy and maintain its own cars, which people may not want to rent.

We tried the service earlier this year, and we really impressed with how it works.

The rise in membership has helped RelayRides reduce its biggest cost: providing insurance to drivers with a wide variety of experience and driving histories (all are screened, and those with major violations are not approved).

RelayRides drivers have fewer accidents than the general population, according to CEO Andre Haddad, which has allowed it to negotiate with its insurers and drive down costs. Members “don’t treat these cars as rentals,” he explained, so they tend to be more careful.

Eliminating Wheelz as a competitor and adding its assets and technology to its service should fuel RelayRides’s already rapid growth.

In an interview with Business Insider, Haddad said the acquisition gives RelayRides access to Wheelz’s DriveBox technology, which allows users to unlock cars with their phones, instead of picking up the keys from the vehicle’s owner.

With dropping costs, more advanced technology, growing membership, and one less competitor in the field, there’s no reason to believe RelayRides won’t keep getting bigger and better.

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