City CarShare strikes deal with Ge­taround

San Francisco Chronicle - - BUSI­NESS RE­PORT - By Car­olyn Said

San Fran­cisco’s Ge­taround, which ar­ranges hourly rentals of peo­ple’s per­sonal cars, is adding more than 200 ve­hi­cles to its San Fran­cisco sta­ble. They’re ar­riv­ing through an agree­ment with City CarShare, a pi­o­neer of short-term rentals from dis­persed lo­ca­tions — an ap­proach called car shar­ing.

“We felt we could help ac­cel­er­ate City CarShare’s mis­sion of re­duc­ing car own­er­ship through car shar­ing and help them take ad­van­tage of the more-mod­ern tech­nol­ogy and plat­form we’ve built here at Ge­taround,” said Ge­taround CEO and founder Sam Zaid.

Ge­taround is pay­ing to take over City CarShare’s park­ing spa­ces and gain ac­cess to its mem­bers. City CarShare, which started in 2001 as the Bay Area’s first car-shar­ing en­ter­prise, will re­main an in­de­pen­dent non­profit that owns its fleet. It will re­ceive rental fees, mi­nus Ge­taround’s com­mis­sion, when its ve­hi­cles are rented out. City CarShare mem­bers now will ar­range rentals through Ge­taround’s app. The non­profit has about 50,000 mem­bers, about 20,000 of whom are ac­tive.

“This is an in­cred­i­bly strong deal for our mem­ber­ship,” said Lawrence Mul­li­gan, act­ing CEO of City CarShare. “Mem­bers will break the shack­les of monthly fees and move to a pay-for-play model, and erad­i­cate the mileage model. They will save sig­nif­i­cant amounts of money and get ac­cess to thou­sands more cars through Ge­taround.”

For the past year City CarShare has op­er­ated in part­ner­ship with Carma, a San Fran­cisco soft­ware com­pany. Mul­li­gan is Carma’s founder and CEO.

City CarShare’s 200 cars, about three-quar­ters of which are hy­brids, are now be­ing retro­fit­ted with Ge­taround Con­nect, an elec­tronic de­vice which al­lows users to un­lock and lock cars with a smart­phone, as well as pro­vid­ing GPS track­ing and an­titheft fea­tures. And they’re be­ing re­branded from Carma’s or­ange logo to Ge­taround’s pur­ple.

City CarShare has about 20 em­ploy­ees. Some will con­tinue with the non­profit, some will move to Ge­taround and some will be laid off.

For Ge­taround, which has been rent­ing out 2,000 ve­hi­cles in the Bay Area, adding the new ones and their prime park­ing spots in­creases its use­ful­ness to cus­tomers. It has more 200,000 Bay Area mem­bers, with about half of them ac­tive.

“This is a busi­ness which ben­e­fits from economies of scale, for ev­ery­thing from in­surance costs to op­er­a­tions,” Zaid said.

That was a real­ity that City CarShare ran up against.

“City CarShare was ham­pered due to lack of fund­ing and in­abil­ity to com­pete ef­fec­tively,” Mul­li­gan said. It faced deep-pock­eted, ven­ture­backed ri­vals like Ge­taround, Zip­car and Turo, which like Ge­taround, ar­ranges rentals of peo­ple’s per­sonal cars. “Try­ing to raise money as a non­profit is in­cred­i­bly dif­fi­cult; it’s a ma­jor turnoff for most in­vestors,” he said. “We re­al­ized the best way was in part­ner­ship with some­one like Ge­taround. And we have great ad­mi­ra­tion for their com­mu­ni­ty­based model.”

How peo­ple get cars is chang­ing. Car shar­ing, once the province of crunchy en­vi­ron­men­tal­ists, is be­com­ing main­stream. Zip­car, the largest car-shar­ing com­pany with 1 mil­lion mem­bers world­wide, is now owned by Avis Bud­get Group. Car­mak­ers are set­ting up their own car shar­ing busi­nesses, such as Gen­eral Mo­tors’ Maven, which re­cently started ser­vice in the Bay Area.

Many of the ma­jor car­mak­ers are also look­ing to team up with star­tups to tap into chang­ing mores. GM in­vested $500 mil­lion in Lyft early this year and also has in­vested in Turo. Toy­ota last month part­nered with Ge­taround to make it eas­ier for Toy­ota own­ers to rent their ve­hi­cles through Ge­taround and ap­ply that rev­enue to their monthly lease pay­ments.

“We see a true longterm shift in how con­sumers will ac­cess trans­porta­tion in the fu­ture, mov­ing away from own­er­ship to­ward ac­cess,” Zaid said. “We have an op­por­tu­nity to help shape that fu­ture.”

Michael Short / Spe­cial To The Chron­i­cle

Auto tech­ni­cian Crosby Chan in­stalls a Getaround Con­nect de­vice in a City Car­Share ve­hi­cle in San Franc­sico.

Michael Short / Spe­cial To The Chron­i­cle

Cus­tomers wait to have Getaround de­vices in­stalled in cars. The com­pany will now man­age the rental of City Car­Share ve­hi­cles.

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