Liz Gannes

Recent Posts by Liz Gannes

Peer Car Startups Pair Up: RelayRides Acquires Wheelz

RelayRides is acquiring Wheelz, a direct competitor in the peer-to-peer car rental space.

Wheelz+RRWheelz had raised more than $15 million from investors including Zipcar, while RelayRides has raised more than $13 million from investors including General Motors Ventures.

However, RelayRides has a car-sharing user base that is “several times larger” than Wheelz’s membership, said RelayRides CEO Andre Haddad.

The appeal of the acquisition was Wheelz’s hardware technology, Haddad said, which integrates into participating owners’ cars to allow renters to access them from a smartphone app.

RelayRides had previously tried to integrate similar technology that was originally for fleet managers with cars that are constantly being borrowed, and it had the side effect of running car batteries down while not in use. Needless to say, RelayRides car owners didn’t like that much.

The Wheelz “DriveBox” doesn’t have that problem, Haddad said. Incorporating DriveBox into RelayRides will help regular participants avoid the hassle of in-person key exchanges, which are the current alternative.

Plus, Wheelz had built its own distinct user base, starting at college campuses and extending to California cities, which will be incorporated into RelayRides.

Haddad said 10 of the 20 Wheelz employees will join RelayRides in San Francisco, primarily those with hardware and mobile app experience. One of those departing will be Wheelz co-founder and CEO Jeff Miller.

Explaining the difference between the two companies, Haddad said, “Their expertise was very automotive, and they were not as much at ease with building online consumer products.”

One interesting aspect of RelayRides is that it has moved much more into daily and weekly rentals than hourly rentals. That means it perhaps competes more with mainstream car rental companies than the Zipcars of the world. Hourly rentals are now down to 10 percent of revenue.

Haddad, who would not quantify nearly any aspect of the deal or of his business with exact numbers, said that RelayRides’ revenue was up 500 percent year over year.

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