Remember the days when owning a car was the ultimate ticket to adulthood and freedom? If you're scratching your head, you're most likely a Millennial (a generation that lags far behind its Baby Boomer parents in terms of new vehicle sales). You can blame Uber, Zipcar--and soon, you may be blaming Getaround.
The company's peer-to-peer car sharing platform allows car owners to defray the cost of their vehicles by renting them by the hour or daily to folks who don't want or need wheels 24/7. According to co-founder Jessica Scorpio, the potential environmental impact is huge: One car on Getaround takes 10 cars off the road, and can offset 100 million pounds of carbon emissions.
Now operating in 10 cities, Getaround has 300,000 users, a fleet of 2,000 cars, and revenue of more than $20 million. "We doubled our revenue in the last six months of 2015, while launching six times as many cars as the same time [in 2014]," says Scorpio.
The idea came out of Singularity University, an elite, 10-week graduate studies program in Silicon Valley in which participants devise solutions to global issues. Scorpio and co-founder Sam Zaid were members of Singularity's first class, in 2009; they were challenged by Google co-founder Larry Page to come up with a plan that would, in 10 years, impact a billion people.
"We got inspired by car sharing," recalls Scorpio. Each shared car, she explains, can take up to 30 cars off the road and "have a big impact on decreasing congestion and improving air quality." She and Zaid later met a third co-founder, Elliot Kroo, who also envisioned that a car sharing company might morph into "the platform of the future for self-driving cars."
With such an ambitious goal, Getaround hit a serious roadblock right out of the gate. Auto insurance companies aren't crazy about car sharing: Who's liable if a renter has a fender bender or, worse, steals a car? And what car owner would want to risk a premium hike or a lawsuit if an accident occurred? While other sharing-economy companies, such as Airbnb, take an "ask forgiveness rather than permission" approach, Scorpio and her co-founders wanted to do things by the book.
They worked to change insurance laws in California, Oregon, and Washington, and to secure insurance coverage through Berkshire Hathaway so that rentals are legal and all parties are covered up to $1 million. "We're getting very close to having a law passed in New York," says Scorpio. At this writing, peer-to-peer car sharing is still banned in the state; Getaround's competitor, RelayRides (now called Turo), was fined $200,000 in 2013 by the New York Department of Financial Services for noncompliance with insurance regulations.
Car rental companies and original equipment manufacturers are also jumping on the car sharing bandwagon. Two years ago, Avis Budget Group acquired Zipcar, and GM recently invested $500 million in Lyft. Hertz and Enterprise have also expressed interest in launching car sharing operations. Getaround has partnered with Audi, Mercedes, and Ford to encourage new car buyers to defray the cost of ownership by renting their vehicles on Getaround.
In November 2014, it raised $24 million in a Series B financing led by Cox Automotive (owner of Kelley Blue Book, Auto Trader, and Manheim Auctions). "A couple of years ago, we started looking into ridesharing and I did a tremendous amount of research," says David Liniado, vice president of new ventures at Cox. "We were impressed with Getaround's founding team and their bigger vision. We want to be at the forefront of this trend."
At the very core, Getaround's secret sauce is its technology. Every car that's registered is fitted with a device that allows renters to unlock a car via a smartphone app. The hardware can identify the location of the car at all times, and enables the company to prevent a car from being started. Getaround also checks driving records and verifies identity before allowing anyone on the platform. "More than anyone else in our industry, we do quite a bit of work to determine that you are who you say you are and that you should be allowed on the platform," says Kroo, Getaround's technical co-founder, who, at age 14, was an engineer on Google's Street View team.
While Getaround collects 40 percent of rental fees, Scorpio says most people with cars on the platform earn anywhere from $6,000 to $10,000 a year (the company guarantees $3,000 to $6,000 a year). A growing number of owners, she says, have actually begun purchasing small fleets of cars and are starting their own businesses on Getaround.
Count Scorpio among them. "Originally, I started Getaround because I never had a car and didn't want one," she says. Her first smart car was purchased through a Getaround partnership with Mercedes. Now, Scorpio is hooked--and has a fleet of seven luxury cars for rent on the platform. "My cars pay my rent," she says.