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FlightCar (YC W13) Raises $5.5M Round to Expand and Hire
- pg 13y agoThese guys are Airbnb-like in another way too: as with Airbnb, I initially thought this was a bad idea. What changed my mind was when I emailed all the YC alumni to recruit users for the closed beta, and large numbers of them immediately and enthusiastically signed up. There is clearly something to the "sharing economy" that everyone is talking about. There will be glitches along the way, but I'm pretty sure this idea is here to stay. Considering the value of the assets involved, it could be the big economic story of this decade.
- orangethirty 13y agoI know you have thought about and/or already have a strategy to deal with the opposition from rental companies. Care to share some details? I'm curious as to how long it will take for them to start using their legal muscle, and industry connections.
- physcab 13y agoThere is a clear value add for people coming into a city who don't want to rent a normal rental car. But I'm not sure the same value add is there for people renting out their car, unlike Airbnb. If the maximum you can obtain for renting out your car is < $100, is that really what your emotional peace of mind (your car being ticketed, trashed, and scratched, loss in blue book value) is worth?
- nostromo 13y agoDon't forget the cost of parking at the airport. If you're gone for 10 days, that's almost $200.
- pg 13y agoYes, the free parking is the big appeal for users, not the money they could make if their car is rented out.
- mazumdar 13y agoWhile free parking is appealing for many users, it’s definitely not for many others because unlike Airbnb, the value of their possession (in this case, their car) is variable while the compensation (free parking and $10/day rented out) is fixed in the sense that it is pre-determined. With Airbnb, the compensation is variable and is set based on the owner's perceived value (which factors in the 'emotional piece of mind’ too among other things). It’s essentially a market based approach, and to get a wider acceptance from the supply-side, that’s what FlightCar needs to incorporate while preserving simplicity. As an optimist, I believe the creases will get ironed out eventually. It’s not going to be easy (never is) and it might take some time, but it will happen. Here’s a structure that comes to my mind: Tier 1 – Free parking and $10 for every day the car is rented out (like they have now) Tier 2 – Pay $X per day to park and Receive $Y for every day the car is rented out, where X is the market rate which in SFO’s case is $18 and Y is the daily rental-price you name.
- LucasCollecchia 13y agoWhile I think this is a good approach, since the service's main drawbacks involve cosmetic damage, it makes sense to launch using a payment model which favors lower-end cars. Once the damage issues are adequately addressed in practice Tier 2, or an equivalent, might become more attractive.
- angryasian 13y agowhy wouldn't you just take a cab vs paying that much for parking
- YuriNiyazov 13y agoBecause if you park on the street outside of the apartment where you live (which is many people, btw - very few people have a dedicated parking spot), then chances are you will get ticketed if you are gone while there's street cleaning happening. To prevent that from happening, you would have to arrange with your friends to move it while you are gone, or you would have to pay someone to do it. In the first case this is an inconvenience, in the second case it's an expense, and the downsides of letting someone else behind the wheel of your car are the same as renting it out.
- angryasian 13y agowhile a valid use case, I wonder if its the norm and how big this market is.
- YuriNiyazov 13y agoI wonder how familiar you are with urban living in the United States. At least within my circle of family and friends, this is very common.
- angryasian 13y agoI've lived in the two largest cities in the US. I'm very familiar with urban living. In NYC everyone takes cabs and don't own cars. In LA everyone drives and can hire very cheap cars to lax or shared shuttles. Its hardly a problem in either of the biggest urban centers in the US.
- YuriNiyazov 13y ago"In NYC everyone takes cabs and don't own cars." - Jesus man, have you ever been outside of Manhattan? If everyone in NYC doesn't own a car, why are there so many fucking cars there all the time? I grew up in Queens, in huge apartment buildings. Everyone there has cars with street parking that they have to move every time street sweeping comes around.
- aashaykumar92 13y agoThe emotional peace of mind is the exact thing that FlightCar and Airbnb are creating by encouraging this aspect of sharing. Yeah shit can go wrong with your car--that's with anything sharing-based though. As the saying goes, "Shit happens". But at the end of the day, sharing is a good thing and people are opening up to the aspect of it more and more. Essentially, the idea that you are sharing with others is the peace of mind. Hasn't warmed up with everyone, but it has with some and will continue. As someone else pointed out, I'm sure FlightCar will change their pricing as it gains more traction. For now, the pricing is just a reasonable and simple model. If there's one thing I disagree with from PG's comment, it's his prediction that this could be the economic story of the decade...no, it has the potential to be the economic story of the century. Not FlightCar by itself, but all these companies disrupting different industries through the simple idea of sharing--it's revolutionary and still young.
- pg 13y agoYou're right, but I always try to underestimate things. It would be pretty big if ownership turned out to be largely a hack people resorted to before they had the infrastructure to manage sharing properly.
- andrewljohnson 13y agoNailed it... "ownership turned out to be largely a hack people resorted to before they had the infrastructure to manage sharing properly" Ownership is just an idea to align consumption with stewardship. The idea that owning stuff is "right" or "good" is just a cultural phenomenon, and not one shared by all cultures (e.g. Native Americans). I think you could do a lot worse in trying to find a start-up idea than to ask yourself "where is there excess capacity that can be shared." Parking, housing, office space, cooking, people-to-do-tasks, storage space, server space - this is the sharing era.
- rayiner 13y agoIt's not so much that ownership is a hack, or that sharing will replace ownership, but that as technology improves the transaction costs for trading property rights decreases, allowing "ownership" to be treated in a more fine-grained way than previously possible. You can see a fairly pure instance of this situation in spectrum management (which is a common area used to study property rights because it's easy to deal with theoretically). In 1960, Ronald Coase said we should break off big chunks of spectrum and sell it off for exclusive use, just like we do with land. Transactions in those rights will help achieve efficient allocations of resources, but there is a limit at which transaction costs dominate and optimal allocations aren't reached. If you think of something very coarse-grained like frequencies for broadcast radio, you're likely to get efficient allocations via trading of property rights. If you think of something very fine-grained like allocation of frequencies to a cell phone as it travels through a busy intersection, the idea of doing micro-transactions to yield an optimal allocation becomes intractable in the face of transaction costs. But as you make the transactions cheaper, through technology, it becomes more practical to do micro-transactions. This basic phenomenon is generalizable to pretty much any situation where you have property rights that are coarse-grained out of accounting convenience. If you can make it cheap and easy to break off little chunks of the property right and trade in them, you'll achieve a more optimal allocation of rights. That's pretty much exactly what AirBnB and FlightCar are: not sharing, but ways of breaking off a piece of a coarse property right and trading in those little pieces in a fine-grained way.
- QuotedForTruth 13y agoA search on flightcar shows results allowing 90 miles/day. At $28/day ($10+$18 in parking savings), thats $.31/mile. At $18/day ($10+$8 parking) thats $.20/mile. This is probably the worst case. Most people wont drive 90 miles everyday. The federal reimbursment rate is $.55/mile. You have to pull gas reimbursment out of that because like normal rental cars (I assume) flightcar renters pay for their own gas. A conservative estimate based on 20 miles/gallon and $4/gallon is $.20/mile in gas cost. Each mile the renter drives using your vehicle thus costs you $.35 in wear and tear and depreciation. An alternative data point would be car lease mileage overage fees. They are commonly $.15-$.25/mile and are supposed to represent the extra depreciation of the vehicle. So its in the right neighborhood of value to the car owner but probably doesnt represent much profit and may not be worth the hassle.
- shrig94 13y agoFor brand new cars, FlightCar honestly comes out to about even as you mentioned. Though, our ordinary car is an '08 Prius, which has depreciated enough in value (as cars depreciate quickly!) to make our service a definite positive. Also, our utility will probably never really be 100% (Hertz for example is doing a lot to increase their's and is at 65% or so I believe). So your car most likely won't be rented for everyday you're gone. We do try and make the experience way better than traditional airport parking. We drop you off and pick you up in a town car and we give you free Starbuck's coffee before you fly and after you land! You also don't come home to an outrageous bill!
- QuotedForTruth 13y agoThanks for the reply. As you mention, a day or two without being rented would definitely swing it more in the car owners favor. Perhaps the best idea is just to bring a car so ugly no one would rent it!
- cjreyes 13y agoI tried to bring my 95' Camry with broken door handles, windows that don't go down, oil leak, and no paint on the hood to rent with FlightCar ... but it didn't qualify. Not surprisingly, they have quality standards :-p
- wellboy 13y agoAs far as I can see, the potential is not so much about the airport rental stuff, because that market is "quite" small, but a very strong use case to launch out of and to get momentum to become the AirBnb for cars and to surpass getaround, relaycars, DriveNow etc.
- shrig94 13y agoWe're actually just focused on airports. That's half of the market!
- wellboy 13y agoHm very interesting, but how so? The average person probably doesn't use their car because it's at the airport for 200h/year, but doesn't use their car for 8000h/year in total, where it could be used by someone else. It's probably easier if you can have a car for 10 days straight instead of just an afternoon, but that's where you want to be or not?
- yumraj 13y agoPlaying Devils Advocate - could it be that Airbnb is making all similar ideas seem like good ideas?
- sethbannon 13y agoI'm a big fan of Zipcar, but getting to/from the airport from/to your Zipcar has always been a big frustration. I've tried FlightCar and have been surprised how easy and seamless the experience is, given how young the company is. I hope they expand quickly.
- kenrikm 13y agoThe idea is great, I'm sure the'll get the pricing sorted out after the launch. From my point of view $10/Day + free parking ($18) seems low. Maybe if you're leaving a smart car or something, but what if you have a nicer car like a Lexus or Mercedes?
- dublinben 13y agoIf you own a luxury car, you probably don't care about the cost of parking. For extended trips, you're likely being picked up/dropped off by a black sedan anyway.
- ebbv 13y ago$10 in gas cards per day seems like low compensation for putting my vehicle at risk. I realize they have insurance but anyone who's had a car get damaged and repaired knows it's never the same as before the damage, especially if it's suspension/steering related. I wish them the best, though, if any industry is stagnant and in need of being overhauled it's the terrible car rental industry.
- pg 13y agoThe main appeal for users is actually the free parking. Long term parking at SFO is $18/day.
- will_brown 13y agoThis is the second time you commented free parking is the main appeal. I have to say your single sentences can get my mind racing at a hundred mph. Example, Why institute the sharing (AirBnB model) if it is less about sharing and more about not paying for parking? Does this mean there is room for a purely valet model, where one drives to the airport and a valet drives it back their home instead of parking at the airport? Is it going to be a common practice for people to be the AirBnB of "this and that", making the marketing more important than the service, especially when sharing is not the main appeal? I take what I can from your comments, like your perspective on the sharing model above, but it makes me think getting a YC interview would be bitter-sweet because really I would want to interview you.
- vegashacker 13y agoFlightCar (along with Uber, Lyft, etc) has been issued a C&D by SFO airport: http://www.sfexaminer.com/local/transportation/2013/04/sfo-tells-ridesharing-companies-scram-until-permits-sorted-out http://www.sfexaminer.com/local/transportation/2013/04/sfo-t... Surprised that the article didn't mention this.
- shrig94 13y agoThe C&D is old. It applied to an old model of ours where we operated on airport property which was rather grey. Our current operation with a black car, on the other hand, follows all rules and regulations by the airport and in fact pays the airport on every trip.
- vegashacker 13y agoAwesome. In that case I amend my statement. I'm surprised the Examiner didn't mention this in their article!
- shrig94 13y agoProbably our fault for not getting the press involved with the C&D. :)
- sharkweek 13y agoThis, from all the other YC W13 companies, was the one that made my head tilt as I thought "huh... that's a ridiculously cool idea." It has a really fun element to it as far as business ideas go. Congrats to the founders!
- joshglick 13y agoIt's awesome to see companies that came out of the startup scene in Cincinnati doing so well.
- nlh 13y agoI'm still hesitant to buy in to the idea because I'm just a fundamentally skeptical person when it comes to letting other people use very personal things like cars as opposed to apartments. Cars have a "feel" to them that many people notice is different after they get used extensively by others. But maybe that's just me. BUT - I have to admit - there's a kernel here that think makes this different from RelayRides, etc. And that's that unlike the other companies where they "suggest" that the user return the car washed, FlightCar is actually doing the post-rental clean-up themselves, and that makes a difference. I don't like the idea of coming back to a used, possible dirty car sitting in my garage (i.e. w/ RelayRides), but if I'm coming back to a parking lot where I know the car has been professionally washed and inspected, my peace of mind is greater. I'm still not interested in using the service, but again that's just me (I'm an anal car nerd), and that certainly doesn't mean others won't use it extensively. Good luck guys! Love seeing awesome car-related businesses take off.
- shrig94 13y agoThanks! Hopefully, we can change your mind one day. :)
- anedisigg 13y agoOne tip for your website. Calendars From To. When i select a date in From filed, set the To field at least to the same date.
- PanMan 13y agoI had the same feeling when I saw GetAround launch (car-sharing). But then I thought about it some more, and realised I'm way more attached to my apartment then my car, and AirBnb seems to work just fine..
- ry0ohki 13y agoThe challenging thing to me with FlightCar is it seems like one of those things where you need critical mass for it to work. You have to have a close matching of people leaving and wanting to rent to people returning and wanting to rent. AirBnB was a little easier because some people already had rentals, and others had empty rooms. IE someone has to be arriving in Pittsburgh roughly around the time I'm leaving, and they have to also be leaving before I get home. I think that's the biggest challenge (beyond getting people to know about it and trust it). I'm sure it will take off at SFO at least. How are the existing car sharing services doing? I haven't actually used one myself yet.
- hpagey 13y agoThere is something to this idea but I am still skeptical. In ATL I park my car for 5$ a day using my wife's corporate discount. I am assuming that most of the regular fliers out of ATL use some sort of discount. So, this might not be the target market for FlightCar on the supply side. But, these are the very people whose cars might be available more often for renting. On demand side, this idea rocks. I remember renting a compact car for a day for around 150$ (including taxes, fees etc etc).
- dools 13y agoAm I the only one that was bummed out to learn that FlightCar isn't making hover cars?
- coin 13y ago"Cars must have been made by 1999" So my 2010 Honda Civic is too new? They only want pre-2000 cars?