City CarShare strikes deal with Getaround
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.”
Auto technician Crosby Chan installs a Getaround Connect device in a City CarShare vehicle in San Francsico.
Customers wait to have Getaround devices installed in cars. The company will now manage the rental of City CarShare vehicles.