Co-Founder Marciano Kim (third from right) and the HyreCar management team run the service out of its headquarters in Los Angeles. Photo courtesy of HyreCar.
The explosion of any new industry throughout time has been accompanied by a host of ancillary businesses that spring up to support them: think space exploration and solar panels or the Gold Rush and Levi’s jeans.
The booming “gig economy” — independent workers on flexible, short-term assignments — is no different. A sizable percentage of potential Uber and Lyft drivers (36% in one study) don’t own a car or don’t have access to one that meets the companies’ requirements. As a result, services such as HyreCar are springing up to provide wheels on a rental basis.
HyreCar offers a peer-to-peer marketplace in which private parties can rent out personal vehicles to drivers for ride-hailing services — think “Airbnb for cars.” In addition to personal vehicles, the service is also testing rental car fleets on its platform. Los Angeles-based MCar has partnered with HyreCar for a pilot program.
“We understand the marketplace created by ride-sharing and the new business model of renting cars to those drivers,” said Gene Brown, vice president of sales and marketing for MCar. “We are looking forward to exploring this potential with HyreCar.”
For car rental companies, the value proposition in partnering with HyreCar is to reach new local markets using excess inventory without the traditional business expansion investments such as labor, real estate, or marketing.
“We provide opportunities for smaller [rental] companies that don’t have the advertising budgets and economies of scale to put more cars on the road,” said HyreCar Co-Founder Marciano Kim, who claims the service’s overall utilization rate for available cars is greater than 90%.
Launched in December of last year in San Francisco, HyreCar is now operating in 20 states.
To work with HyreCar, car rental companies are not beholden to a contract or a minimum number of vehicles to rent on the platform. The rental contract is written by HyreCar and signed electronically before picking up the car. The driver picks up the vehicle from the car rental company’s physical location.
There is no mileage cap; Kim said Uber drivers average about 150 miles a day. HyreCar vehicles are rented for an average of 14 days.
Regarding security, all drivers are subjected to a background check. HyreCar covers the vehicle with its own liability and physical damage policy, minus a $1,000 deductible.
Once owners are up and running on the system, the entire process is handled electronically through the HyreCar app, from vehicle booking to pick-up and returns to damage reporting. However, live support is available almost 24 hours a day for drivers and vehicle owners.
At this point, the rental company uploads vehicles manually into the HyreCar system, though Kim said the pilot programs will help to improve process details.
To better understand the service, “Test it by listing your car,” Kim said. The HyreCar team will help operators with the onboarding process, account creation, listings, and strategies for pricing. Kim has hired a point person to specifically liaise with rental companies.
Regarding pricing, Kim said car rental companies will see a favorable profit margin. “We’re not targeting casual drivers,” Kim said. “Drivers view our service as a tool to earn income, so they place a higher premium on it.”
Referencing the recent shuttering of peer-to-peer rental company FlightCar and Breeze, a startup that leased cars to Uber and Lyft drivers, Kim believes HyreCar is built to avoid the landmines in the tech startup world. “We’re not inventory-centric; we’re a platform, a technology service,” he said. “We don’t have that capital infrastructure. We can scale at any pace we like.”
Kim is also aware of competitors’ programs. “While we were the pioneers, we now see other players along with ride-sharing companies themselves trying to do something similar,” he said. “This is strong evidence of the scale of opportunity within the car rental space.”