Huge local potential to make money from idle wheels
SA is one of the best markets for BMW’s M division and Mercedes’ AMG — we have electric cars in the form of the BMW i3 and Nissan Leaf, but generally we mostly watch as technology in the areas of automotive and urban usage develop at a rapid pace worldwide.
Car sharing schemes have taken off in a big way in Amsterdam, London and New York. In London you can even rent out the driveway in front of your home for commuters who need to park and don’t have a permit to park on a specific street. You can also rent out your car.
Car sharing has not really taken off in SA. A number of years ago a company called Locomute was launched by private individuals. It has not mirrored the success of big global firms, but more are potentially coming to SA with BMW planning its DriveNow and Avis Budget looking at its Zipcar model.
While we wait for these, you can already rent out your car. We spoke with Sebastian Brokmann, a director at Cape Town-based Rent My Ride. The company was set up in 2016 by Peter Puren who had worked in the vehicle rental industry for many years. Brokmann, who was familiar with the Snappcar private vehicle rental offering in Holland, decided to move to SA and invest in Puren’s startup.
The idea seems simple in that you can rent out your car in the same way as a car rental company does.
“Ninety percent of the time a car is standing still, so it is about using your assets,” says Brokmann. He sees big potential in SA because unlike many other parts of the world, people drive everywhere in SA. He admits that unlike in Europe, there are trust issues here and that it will take time to overcome those.
“We see there is interests and it is growing,” he says, although he wouldn’t divulge exactly how many subscribers his service already has, saying only that it is about 1,000. The service is available in Cape Town and Johannesburg and will soon roll out to Durban.
“It’s like Air BnB for cars,” he says. Like the room rental service, Brokmann says that people are already seeing business potential in the service, buying cars and then renting them out.
Renters have access to a wide range of vehicles, from budget hatchbacks to executive sedans and bakkies, all at rates that the company claims are up to 40% below those of the traditional vehicle rental companies. A major difference is that most of the cars are not new as any owner can put their car up for rent. There are criteria of course — you can’t pull some old thing out of the garage and try to make money. Cars must be in good condition and be the kind of vehicle that someone would want to pay money to rent.
Owners and renters are also covered by an insurance policy with New National Insurance Company that covers for liability of up to R10m.
Even people who have their vehicles on finance are renting them out says Brokmann, although he says that he has not had a conversation with any of the banks about it. He believes that it is the owner’s responsibility to ensure they are not in breach of contract if their vehicle in financed.
Currently the business is still trying to establish itself and grow, but Brokmann says he expects a return on investment within three to five years.
Whether the market is ready for a service such as Rent My Ride and whether it can establish itself before any of the big players enter the market remains to be seen, but with many households facing tighter budgets, there could be those that find the model appealing.
Rent My Ride directors (left to right): Sebastian Brokmann, Peter Puren (founder and director) and Frank van Driel, although we don't think they rent out the classic Porsche. Below: Rather than having your car standing around, there is a way to make...