Huge lo­cal po­ten­tial to make money from idle wheels

IN­TER­VIEW

Business Day - Motor News - - MOTOR NEWS - Mark Smyth

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...

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