Car sharing business 'part of transport solution'
As a student of transport engineering Oscar Ellison was aware there were lots of cars sitting idle in driveways, but the point was further hit home when he bought his own first car.
"I realised it was costing me a lot of money, but I wasn't actually using it that much and I thought there had to be a better way," says the Auckland-based entrepreneur.
He hit upon that 'better way' in 2012, coming up with the idea for the car sharing business YourDrive - a website that allows vehicle owners to list their vehicle so they can rent it out when they're not using it, and for users to rent those vehicles. Think Bookabach for cars.
Ellison describes the development of the business as a "bit of a slow burn", but the website fully launched in April this year and has since signed up about 250 people, and is growing.
YourDrive is one of a number businesses popping up that allows people to share excess capacity in services or products - usually through some kind of technology platform - in what's sometimes called 'the sharing economy'.
It's not a particularly new or fringe idea - Trade Me is a hugely successful and long-running local example of the sharing concept, and Airbnb and Uber are a couple of global juggernauts in the space - but it is still a relatively nascent concept in some industry sectors here.
That hasn't seemed to deter a growing number of local businesses springing up in the sharing economy, and disrupting conventional business models in the process.
Ellison says one of the biggest challenges he's had to overcome so far in developing YourDrive has been dealing with the insurance and regulatory aspects of the business.
"Neither of those have been easy, especially for a new company with a concept that's outside the box. There are strict regulations around rental service providers, and to fit into those existing rules when we've got a new business model has been quite challenging," he says.
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Julia Charity is the founder of the homestay network Look After Me - an online marketplace where guests book accommodation with homeowners who have unused space. She hit on the idea in 2009, put together a business plan for it in 2010 and launched in 2011.
Like many entrepreneurs spoken to for this series, Charity says developing trust is key for success when operating in the sharing economy, where people are transacting peer to peer rather than in the conventional economy.
"We've built systems for establishing trust in all levels of our business. There's a lot at stake here - we need to protect and uphold New Zealand's number-one position for being the most hospitable nation in the world - so we screen our hosts carefully to make sure they'll genuinely look after their guests," she says.
"In terms of trust, Trade Me has set a precedent for New Zealanders to develop online transactional and personal relationships. That level of comfort has swung the door wide open for sharing personal property - like spare rooms - via the internet."
Similarly, Reinartz says safety has been a big focus, with the app including features such as the ability to share the details of any ride with an emergency contact, and an option for women using the service to choose to travel only with other women.
Chariot was started mid last year after the firm's CEO, Dr Thomas Kiefer, became frustrated with spending time in traffic jams on his way home.
"He thought 'how cool would it be to just tap on your screen and figure out who is driving in the same direction or even close to your home and ask for a lift?' He approached me to help him put together a team and shortly after Chariot was born," explains Reinartz.
The biggest challenge the team will face launching a business based on sharing, he says, is driving the behavioural change that's needed among consumers to take up the product.
"But it has been done before - think BlaBlaCar or Airbnb. We've planned a solid marketing strategy, and with a progressive roll out and ultimately building a community, we think it's totally possible."
Anthony Cabraal is chief marketing officer and co-founder of Chalkle, a website that allows individuals or organisations to set up classes to share their skills or knowledge, and learners to browse for classes and book them online.
Chalkle has been going for around three years; in its original incarnation the company's focus was on organising actual classes where 'anyone could teach', and folks signed up to learn everything from accounting to doing zombie makeup. More recently, Cabraal explains, the focus of the business is on being a technology platform that allows anyone to set up and run their own class.
Cabraal thinks New Zealand is well placed to build more businesses based on the sharing model, which he says can create cultural change and a more open world.
"New Zealand's often touted as a place to test ideas that could work globally, and as a culture I think we're open and progressive; seeing how a shared marketplace like Trade Me has become such a part of our culture is a great sign."
Oscar Ellison, YourDrive
Oscar Ellison is the founder of peer-to-peer vehicle rental company YourDrive.
Can you tell me about YourDrive and what the company does?
Basically we've got a website that allows vehicle owners to list their vehicle so they can rent it out when they're not using it. Owners set the price and availability, and control who they rent it to, and users get a wide range of vehicles to rent and in a variety of locations.
How do you make your money as a business?
We take a percentage commission on every sale. Owners set their price and we take 40 per cent of that sale, which covers all the insurance and legal side of the transaction. That means if there's any incident during the rental we sort it out for the owner and deal with the user directly.
Where did the idea come from?
I studied transport engineering at university and I've always been passionate about transport. I saw there were a whole lot of vehicles around the place doing nothing, and that coincided with the time I bought my first vehicle. I realised it was costing me a lot of money, but I wasn't actually using it that much and I thought there had to be a better way.
So creating a business that would help get better utilisation out of our existing vehicle fleet in New Zealand seemed like a good idea. We've got one of the highest vehicle ownership rates in the developed world and on average we use our vehicles for less than an hour a day.
How long has it taken you to develop the idea?
I first got the idea around 2012 and it's been a bit of a slow burn to get everything up and running. But since the start of the year it's been a full-time project for me and we now have 2.5 full time employees. We soft launched the website at the beginning of the year and fully launched it in April. We've now got about 250 people signed up to it, and that's increasing all the time.
What have been your biggest challenges on the journey so far?
It's been dealing with the insurance and regulatory aspects of the business. Neither of those have been easy, especially for a new company with a concept that's outside the box. There are strict regulations around rental service providers, and to fit into those existing rules when we've got a new business model has been quite challenging.
And I guess the big challenge for any sharing business is the network effect. Unlike a normal business where you've got one market, in the sharing economy you've got two. For us we have the vehicle owners as well as the users of the service, and the challenge is to match up those two markets.
You need to be constantly looking at where the demand is, and what supply you're getting and whether the two are aligning. When you get a critical mass using your service that happens a bit more naturally, but until you get that you've got to force it a little bit.
We do a lot of tracking through the back end of our website to look at the demographics of our users, where they're located and how people are being directed to the website to identify where we need to focus our marketing.
The importance of establishing trust is something people talk a lot about in relation to businesses in the sharing economy. As well as complying with regulations, how else have you tried to develop that?
Trust is the main issue for us and we address that in a few ways. We vet all our vehicle owners and do some checks on their vehicle to make sure they're fully compliant. We also have a rull rating system built in to the process, where users rate the vehicles and owners rate the users, and because people have to use their driver's licence as part of our process, it ensures people are using the system correctly and respect the process.
We're always conscious that this is a new idea and we make sure all new customers get a really personalised experience and we walk them through any concerns they have. Customer service is a big focus for us to build trust in the brand and the concept.
What are your hopes ultimately for the business?
I'd like to see it being part of the transport solution. I'd like to see people looking at transport differently; thinking about not necessarily needing to own a car and picking the mode of travel that best suits a particular journey.
In large cities around the world car ownership is not as important as it is here in New Zealand and it would be good if we could move away from such a high level of personal vehicle ownership and into a more shared model of use. I come from a business background and I feel like business is a great way to make the change you want to see in the world.