RelayRides, GigaOm

Nice to see Mathew Ingram at GigaOm give a thoughtful precis and response to my Reputation Systems post.

Also, it’s timely to see today’s news that sharing economy company RelayRides has confirmed my predictions in its move away from its original market of hourly rentals and towards longer-term rentals, described in Wired, Forbes and elsewhere. Hourly rentals may appeal to “sharing” but monthly rentals is just commerce. It’s becoming more like a regular car rental company and less like a car-sharing company.

Why? Because of the demand for growth that faces VC funded companies, and according to Crunchbase RelayRides has been funded to the tune of $30m by investors including Google Ventures, General Motors, and others. Let’s hope that the boom and bust mentality behind these companies don’t have a bad effect on local initiatives like Community Carshare near me, which don’t have ambitions to disrupt the world but focus on doing something useful and actually cooperative.

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  1. Holy confirmation bias Batman. I see this latest move by RelayRides as a search for a scalable business model. My confirmation bias is called insight 🙂

    RelayRides, Community Carshare, and Zipcar are slightly different business models. RelayRides has taken a pure coordination approach, borrowing language from your previous post. Abandoning the need for specialized hardware is a sign that their previous peer ownership model with hourly rentals was not working or that they are running out of cash.

    Community Carshare and Zipcar have very similar business models except for the funding. Zipcar started with VC funding while Community Carshare uses a co-operative model. Zipcar had more cash to spend on growth and advertising but by accepting the VC investment model they had to exit/IPO. They are now public and their stock is suffering. Zipcar would be doing better if their business model supported the 10% annual returns that NASDAQ investors expect.

    There has to be synergy between a business model of a company and the business model of its investors. Google was perfect for VC financing. Car sharing may very well be best suited for a co-operative ownership model.

  2. Thanks RAD. Yes, confirmation bias, but it’s just too timely to ignore.

    Zipcar is now a wholly-owned subsidiary of Avis. First of many. Your last paragraph is on the money (sic).

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