RelayRides is a peer-to-peer car sharing marketplace where people can offer their cars for daily or weekly rentals. Wheelz adopted a similar model as well as proprietary DriveBox technology that facilitates keyless access to cars. With this acquisition, RelayRides will absorb Wheelz and its marketplace, technology, and several “key people” from the Wheelz team.

“RelayRides has been growing rapidly and we are confident that this acquisition will turbo-charge our growth,” said RelayRides director of communications Steve Webb to VentureBeat. “We are going to be better positioned to extend the benefits of peer-to-peer car sharing to more people across the U.S. This acquisition demonstrates that the peer-to-peer car sharing marketplace is maturing and consolidating. As an industry matures, consolidation follows, and the peer-to-peer car sharing industry is no exception. We are witnessing the evolution and maturation of an exciting space.”

Webb said that RelayRides and Wheelz share the goal of having a car within a 10-minute walk for at least 100 million Americans by the end of 2015. Instead of owning a car or renting one from an agency, people can turn to services like RelayRides for a more personal and affordable mode of transportation. Each car on the site has a profile with information about its features, ratings and reviews, and owner bio. All drivers are screened, and RelayRides provides insurance on the rentals, so drivers don’t have to worry about damages.

RelayRides and Wheelz are part of a trend surrounding “the rise of disownership.” Consumer attitudes and behaviors surrounding renting, borrowing, and leasing items, versus ownership, are shifting across the country. People are increasingly engaging in disownership by putting their under-used property to work. Internet startups facilitated this movement by adopting ‘shared economy’ or ‘collaborative consumption’ models that connect people with available assets to people who need them. AirBnB did this for homes, TaskRabbit for services, but the transportation space is still a dynamic and crowded area. Uber, Lyft, and Sidecar can be used instead of taxis, and RelayRides is providing an alternative to traditional rental agencies. It mainly competes with Zipcar and Getaround.

Since launching in 2012, RelayRides added tens of thousands of members into its marketplace and thousands of postings for cars. Webb said rental reassertion hours increased by 500 percent and April was the company’s best month yet in terms of revenue and new members added. By scooping up Wheelz, RelayRides will expand its marketplace.

RelayRides has raised $13 million in venture capital. In 2012, it teamed up with General Motors so that 6 million of GM’s OnStar subscribers could rent out their cars using RelayRides. Wheelz had raised a total of $15.7 million and includes Zipcar has an investor. Both companies are headquartered in San Francisco.

The financial details of the deal were not disclosed.

Photo Credit:  Darryl W. Moran Photography

Transportation startups are a hot thing now, with Uber, Hailo, SideCar, Lyft, and others getting a lot of attention and controversy. But this space is a battleground with regulators attempting to stop innovation and some startups getting more favorable treatment than others.

The CEOs of ride-sharing service SideCar and taxi-hailing app Hailo showed that tension in a combative panel today at TechCrunch Disrupt NY.

SideCar CEO Sunil Paul (pictured, right) took a lot of shots throughout the conversation. His biggest target was New York City’s Taxi & Limousine Commission (TLC). He said the TLC is using its power to protect taxis and apps that coordinate with the industry like Hailo and Uber.

“The TLC protects the taxi industry, and I don’t think anyone can deny that fact,” Paul said. “SideCar driver shifts are voluntarily and payment is voluntary. It is the regulation of taxis that is an illegal restraint of trade.”

Paul is understandably frustrated. This past weekend, New York City police targeted SideCar drivers in a sting operation. In a blog post, the company wrote that a SideCar driver named Sandra was interrogated by police and her new car was impounded.

“People are being treated like criminals for doing something that might threaten the taxi industry,” Paul said. “Sharing is not a crime. We want to make sharing possible in New York.”

By comparison, Hailo and Uber have just received approval from the TLC to operate e-hailing taxi services in NYC. With a few taps on your smartphone, you can now have a taxi come pick you up wherever you are in the city.

Hailo CEO Jay Bregman said he was happy about the development. He took the jabs from Paul quietly but finally responded when he’d had enough. Bregman said his company was part of a “broadening” taxi industry that has begun to innovate.

He said his service had paid out “millions” to taxi drivers in cities where Hailo already operates. He praised taxi drivers for embracing innovation. Paul said he didn’t have a problem with drivers, but with governments.

“Taxi drivers are great, but they are protected by a monopoly,” Paul said.

Hailo has only been operating in cities around the world for 14 months, so Bregman also said he was pleased that it only took that amount of time before the TLC approved his service.

“You can be disruptive without being abrasive,” Bregman said.

Paul shrugged off Bregman’s comment, saying, “If you want to be disruptive, you have to be willing to piss people off.”

At the end of the panel, the two did eventually hug, but it’s understandable why they are so at odds at the moment.

Check out the conversation in full below:

Photo via Sean Ludwig/VentureBeat

With this “Policy White Paper 1.0,” Kalanick stated that while at first Uber refrained from participating in ride-sharing due to regulatory risk, the “ambiguity” has encouraged him to implement ride-sharing as part of the app in “any market where the regulators have given tacit approval.”

“In most cities across the country, regulators have chosen not to enforce against nonlicensed transportation providers using ride-sharing apps,” he said. “This course of nonaction resulted in massive regulatory ambiguity leading to one-sided competition which Uber has not engaged in to its own disadvantage. … In the face of this challenge, Uber could have chosen to do nothing. We could have chosen to use regulation to thwart our competitors. Instead, we chose the path that reflects our company’s core: We chose to compete.”

Uber will now offer a ride-sharing feature in markets where a competitor has operated for 30 days without direct enforcement against them. There will be safety and insurance safeguards that “go beyond what local regulatory bodies have in place for commercial transportation,” including a $2 million insurance policy and extensive background checks on the drivers.

Kalanick said that while ride-sharing apps operate without traditional commercial insurance or licensing, Uber has taken most of the legal heat despite that its approach involves buying cars as well as having proper insurance and licenses. After watching regulators in New York, Seattle, Chicago, Boston, and California choose not to enforce “nonlicensed operators” such as Lyft, Kalanick will no longer sit on the sidelines.

He founded Uber because he was frustrated with the existing transportation options in cities and wanted to provide a superior alternative. Ride-sharing systems like Lyft and SideCar hold a similar goal: to offer on-demand, convenient, affordable rides to city residents.

Uber first started with its on-demand black car service and has since added SUV, Taxi, and UBERx, a cheaper midrange car option. Since the beginning, Uber has faced significant opposition from municipal regulators and transportation agencies (not to mention taxi cab companies) and has fought battles around the country to remain operational. Kalanick is known for never shying from a battle. He has consistently fought for his company’s right to exist, while at the same time growing Uber into an international company and adding new modes of transportation.

Now Kalanick is ready to compete in ride-sharing. As he said during a fireside chat last year, he thrives on competition.

“Competition is fun,” he said. “If there isn’t competition, what is the freaking purpose? Let’s have some fun and make the world a better place at the same time. You have to be fighter, you have to be a warrior, and if not, you should go do something that is a little less disruptive. I’m bringing it, I’m not sleeping. If the other guy is sleeping, I am going to kick his ass.”

Ride-sharing is starting to resemble a melee, with iPhones and pink mustaches as weapons. The question on my mind is that faced with legal opposition from regulators: Will these competitors band together? Competition may be good, but they all have the same enemies and the same battles to fight. Let the games begin.

Read the White Paper here.

Image credit: storem/Flickr

Just five days after the $500 million deal closed, Zipcars are showing up at New York regional airports. Skift reported this morning that the Avis Car Rental pick-up facilities at JFK, LaGuardia, and Newark now house a handful of Zipcars, available at rates ranging from $12 per hour to $89 per day.

“The availability of Zipcars at airports will provide increased options for members who may not need a full day rental car, or for those who need to travel somewhere not easily accessible by public transit,” Zipcar president Mark Norman said. “We believe this is the first in many new offerings that will enhance the value of Zipcar membership that we can provide thanks to the support of the Avis Budget Group.”

This small expansion to airports is just the beginning. Norman said Zipcars will be available in additional airport locations over the course of the year, marking a departure from Zipcar’s traditional placement in cities and college campuses.

Avis and Zipcar announced the deal on January 2nd, but the papers were officially signed on March 15. Within hours, Zipcar’s CEO Scott Griffith resigned and COO Mark Norman took the job as top dog. Despite Zipcar’s popularity (it was 730,000 members and 1 million customers), the company was never able to turn a profit, losing about $55 million since 2007. The Avis acquisition will help both companies expand their reach and offer greater choice to consumers.  

“By combining with Zipcar, we will significantly increase our growth potential, both in the United States and internationally, and will position our company to better serve a greater variety of consumer and commercial transportation needs,” Avis Budget Group CEO Ronald Nelson said in a statement. “We see car sharing as highly complementary to traditional car rental, with rapid growth potential and representing a scalable opportunity for us as a combined company.”

Zipcar now operates as a subsidiary of Avis. Avis said it expects “to generate $50 to $70 million in annual synergies” in relation to the deal.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Not to be outdone by its competition, Uber has reached an agreement with the California authorities.

The California Public Utilities Commission (CPUC) struck its first deal with popular ride-sharing service Lyft. Twenty-four hours later, the state has also agreed to suspend its $20,000 fine and cease-and-desist action against Uber, the smartphone app that you can use to summon a car instead of hailing a traditional cab.

This agreement provides Uber with the breathing room to continue operating its hire-a-car service and expand into the ride-sharing market.

Uber CEO Travis Kalanick told the New York Times that the ride-sharing service will be unveiled in California in the coming weeks. In California, Uber operates in San Francisco, San Diego, Los Angeles, Orange County, Sacramento, and a few smaller cities.

As part of its official statement to the press, Uber said:

The agreement states that ride-sharing — or rides provided by drivers not specifically licensed to drive a limousine or taxi — is legal, too. This paves the way for Uber to begin offering ride-sharing services in California in the near future.

As we reported yesterday, California is taking six months to perform background checks and assess whether services like SideCar, Lyft, and Uber are in compliance.

The CPUC is also considering new regulations that could legalize ride-sharing. In December it issued a proposal for new rulemaking, which will evaluate how these new businesses are using “mobile communications and social networks to connect individuals wishing to offer and receive low cost and convenient, sometimes shared, transportation.”

Uber has faced similar regulatory battles in other cities as it expands. In a blog post, a company spokesperson stressed that California is “cutting edge” and appears set to lead a “steady drumbeat of progress.”

Popular ride-sharing startup Lyft got a green light today to continue operating while the California Public Utilities Commission (CPUC) re-examines its policies.

In their efforts to bring new transportation options to urban residents, these services have consistently butt heads with the authorities. In November, we reported that hefty citations were levied against Uber, Lyft and SideCar, prompting users to launch an online petition.

But today, the PUC agreed to suspend the $20,000 fine and cease and desist notice against Lyft. The State is taking six months to perform background checks and assess whether these services are in compliance. The CPUC has not yet reached any similar agreement with Uber and SideCar.

The CPUC is considering new regulations that could legalize ride-sharing. In December it issued a proposal for new rulemaking. The proposal states that this is “a situation not encountered before,” and that it will evaluate how these new businesses are using “mobile communications and social networks to connect individuals wishing to offer and receive low cost and convenient, sometimes shared, transportation.”

Lyft responded to the news by announcing plans to expand into Los Angeles. It has already begun recruiting drivers in its first new city outside of San Francisco.

Since it launched in August, Bay Area residents have become familiar with Lyft’s fleet of moustache-adorned cars. Payment is donation-based and often works out cheaper than a taxi. Users can order a ride from their smartphone in a matter of seconds, and a car will typically arrive in 10 minutes or less.

A commission press release said:

“The terms of the agreement are intended to ensure the public safety of both riders and drivers through the CPUC’s interim oversight of Zimride [Lyft's parent company] during the rulemaking through safety requirements that include continued proof of insurance, Department of Motor Vehicle checks, and national criminal background checks.”

This is a significant step forward in the protracted battle between ride-sharing services and State authorities. But the fight isn’t over. Today, users launched a Change.org petition to show support for Uber in an ongoing regulatory battle in Denver.

This is a guest post by entrepreneur Justin Elof Johnson.

I hop in a car from Lyft, the on-call ride-sharing startup in San Francisco, and I start talking with the driver. She’s a 26-year-old with a Master’s degree and has worked for startups for a few years. A few months ago, she left her job to take some time to figure out what’s next and learn to code.

To make ends meet, she did some research about part-time work. She started out by putting her room on Airbnb and doing a couple tasks a week via TaskRabbit. Now she’s driving her car a couple days a week on Lyft. The combination of these three things is making her more money than she made working full time. Plus, she feels like she’s working for herself without the risk of starting her own company.

Most of the people I meet who are on the supply side of the sharing economy are working between jobs or to using these services to supplement their incomes. Thought these conversations, I have a feeling 2013 is going to be a year where we start to hear about people leaving full-time employment to do a combination of different shared services so they can have a more flexible schedule.

To get a better understanding of these trends, I chatted with several folks from TaskRabbit, Airbnb, Lyft, and Getaround. They are all growing rapidly, expanding to new markets, and on-boarding as many new “sharers” as they can, as fast as they can.

For example, Johnny Brackett of TaskRabbt told me that the company currently has more than 4,000 “Rabbits” on-boarded to their platform and have a waiting list of more then 10,000 people waiting to offer their services to local communities.

Logan Green, CEO and co-founder of Lyft, is tight-lipped about specific statistics involving his community, but he told me that the people signing up to drive for Lyft run the full gambit of backgrounds and experience. He gave me one example of a preschool teacher who is a Lyft driver in her spare time so she can get some adult interactions and a PHD student who drives to get his mind off research for a little bit.

Meg Murray, a marketer at Getaround, said the company has more then 10,000 cars listed for rent on their platform with the average active renter making around $350 per month, and one renter making as much as $1,300 per month.

The average worker for TaskRabbit runs two to three tasks per day and earns $45. A highly specialized Rabbit can make much more per task and bring in as much as $6000 per month.

Airbnb communications pro Emily Joffrion tells me that the company has more than 250,000 properties listed in 34,000 cities across 192 countries around the world. I also got some specific information about San Francisco. Emily tells me that occasional renters in the city can make between $6,900 and $9,300 annually. I also know from experience that at least three friends of mine living in SF at minimum cover their rent by putting rooms on AirBnB. Sometimes they make more.

So based on these numbers we can make some assumptions about what a person should be able to make doing tasks for the whole of 2013. Let’s say this is a woman in San Francisco with no traditional job who is willing to work in the shared economy up to 40 hours per week and has an apartment and a four-door car.

• Renting her apartment out occasionally on Airbnb, she can make: $667/month or $8,000/year
  
• Doing two to three tasks per day on TaskRabbit five days a week, she can make: $2,000/month or $24,000/year
• Lyft told me driving part-time she could make: $750/month or $9000/year
• When not using her car, she can supplement income from Getaround: $350/month and do as needed

Based on these numbers, an individual with no specialized skills should be able to make an average of $41,000 per year. If he or she has specialized skills, the opportunity could be much greater.

Considering people trying to do this get to make and manage their own schedules and effectively be their own boss, this could be an enticing number. I don’t see why it couldn’t be a regular thing to hear people start saying, “I left my job to do tasks on TaskRabbit and drive for Lyft.”

Justin Johnson is an entrepreneur and the founder of Late Labs. You can contact Justin on Twitter (@elof) or hustle@latelabs.com.

Photo via Lyft

Uber X, Uber’s answer to a less pricey cab service, came out of its testing period for San Franciscans today,  the city that has become obsessed with mobile-hailing.

Uber is an alternative to cabs in a number of cities, starting with San Francisco. The company provides a fleet of town cars, which cab be hailed through a mobile app. The app will not only let you order your town-car with the push of a button, it will also show you where the cabs are located, and let you pay for the ride with a credit card on file.

As expected, however, the town cars cost a premium over the regular cabs available on the street. The company’s Uber X product, however, has all the same perks of the mobile app, but instead employs limousine company owners and employees who will pick you up in hybrid cars or sedans that cost less money, thereby costing you less.

San Francisco was once the most expensive city for the original Uber service, so to remain competitive, the company decided to lower its base price as well as distance and time fees, bringing the entire cost down by 10 percent.

Uber does well in San Francisco specifically because of how difficult it is to hail a cab here. In places like New York City, where the cab systems are very efficient, Uber has had a much rockier start. The city told cab drivers that they could be fined if they joined up with Uber, though the company and the city have seemed to smooth over the issue.

Uber and other taxi-oriented companies such as Sidecar and Lyft have recently come under the scrutiny of lawmakers for their services. The California Public Utilities Commission recently fined the companies, for a number of reasons. In Lyft and Sidecar’s case, the CPUC was concerned about drivers not being certified to commercially drive passengers. In Uber’s case, however, the drivers are all certified because of their associations with previously established limousine companies. Instead, Uber may need to be certified as a “charter-party carrier,” which would regulate it in the same way its partners are.

Thanks to new legislation, Uber, the posh car-hailing service, has rolled out its taxi service in Washington DC.

In the nation’s capital, smartphones users can now hail a DC cab, as well as one of Uber’s sedans or SUVs. The news was announced today on the company blog. Given its troubles with the local authorities, Uber often refers to these expansion plans as “experiments.” Owing to legislation passed by the DC Council, which would increase the supply of vehicles-per-hire and thwart regulators, the company remains optimistic.

The trademark black cars will remain the default, so to request a taxi, users will need to select that option within the app. Once the taxi arrives, the driver will start the fare just like any other normal DC ride, but Uber users won’t pay once they’ve reached their destination. All charges will go to the credit card on file. To request via SMS, head to m.uber.com.

Still, a company spokesperson writes that they expect the taxi service to change over time. Supply will be limited at first, and the service will only be available in the District.

Uber has repeatedly seen its expansion plans stymied by local authorities. In the Fall, 2012, Uber had to halt its New York City experiment in allowing smartphone users to hail taxis. Months later, a vote by the New York City Taxi and Limousine Commission enabled Uber users to e-hail taxis “blocks or miles away” via smartphone, and the company announced its imminent return.

Related: Read more about Lyft and Uber’s struggles with city regulators

In the aftermath of the announcement, Zipcar came under a firestorm of flak from Silicon Valley’s commentators. The primary criticisms are that the company is under-valued, and that the acquisition will stunt the unstable and nascent car-sharing economy.

However, the acquisition adds legitimacy to the car-sharing space, and will propel younger rivals into the spotlight.

“It’s a big day for car sharing and a proof-point for the industry,” said Jessica Scorpio, cofounder of Getaround, on hearing the news. In an interview, Scorpio said it was a “good deal,” primarily because the car-sharing market is still in its infancy. “Zipcar’s value hasn’t been realized yet,” she explained.

Massachusetts-based Zipcar is the undisputed leader in the car-sharing market. It was one of the first to experiment with the sharing business model when it’s founder Robin Chase, a mother of three, saw evidence of car-sharing’s success in Berlin in the late 1990s and promptly received financing. This model would later be dubbed the ‘The Sharing Economy’ by its Bay Area advocates, including Zipcar early investor and former AOL chief executive Steve Case, and would later be adopted by services like Airbnb.

Zipcar manages a fleet of more than 10,000 for-rent vehicles spread across 19 metropolitan markets and over 300 college campuses. The 12-year-old car-sharing network has more than 730,000 members and about 1 million customers. The company booked 4 million total reservations in 2011.

At first look, this may seem impressive, but Zipcar has never been able to turn an annual profit, losing about $55 million since 2007. This prompted the Wall Street Journal to recently call it a “pretty awful” company.

Still, the new generation of startups view Zipcar as the pioneer in the space, paving the way for more feasible business models. The company was one of the first to experiment with hourly rentals, which allowed it to break into markets and demographics that traditional car-rental services like Hertz and Avis could not. The service found its niche with busy urbanites who rent nearby vehicles for weekend use, and often opt out of owning a car altogether.

Is $500 million a fair price?

From a purely financial perspective, it’s a fair deal.

Zipcar has struggled to grow its membership base and turn a profit. As entrepreneur Mark Rogowsky rightly points out in Forbes, there is a fundamental “structural issue” — users typically rent a Zipcar over the weekend. But Zipcar owns a fleet of roughly 10,000 for-rent vehicles and must pay for their upkeep and maintenance on a consistent basis.

An acquisition is also motivated by a company’s efforts to market to new customers. In a phone call with analysts, Avis CEO Ronald L. Nelson revealed that he was skeptical of car-sharing services in the past but viewed this acquisition as an opportunity to reach a younger demographic and increase weekend availability.

Avis hopes this will translate into revenue — it said it expects “to generate $50 to $70 million in annual synergies” in relation to the deal. The company also said it expects its full-year 2012 revenue to be about $7.3 billion, a 24 percent increase over 2011.

“What’s unique about Zipcar is the brand,” said Scorpio. “In terms of car-sharing, Zipcar is the top-notch experience.” She told me that traditional car-rental services have been sniffing at the heels of Silicon Valley startups for years, but that Getaround isn’t in the market for an acquisition.

“We have pretty frequent conversations with car rental [companies] and car automakers,” she said. “[But] I think the quick win is Zipcar if you can get it.”

Zipcar owns cars — it’s not peer-to-peer

Zipcar’s younger rivals will often tell you that its business model is broken, as the company is encumbered by its inventory. In its life span, it has needed to borrow $97 million to finance its fleet of cars.

“Thank God we don’t have that model,” said RelayRides‘ CEO Andre Haddad in an interview. “Their economics are different.”

The “peer-to-peer” model has numerous business advantages. It taps into the installed base of cars that people already own. For one thing, Getaround has developed some unique IP in the form of its hardware, its CarKit, which allows users to unlock a stranger’s car via a smartphone.

Both RelayRides and Getaround have seen faster adoption and have expanded to more cities than Zipcar. Getaround claims to have signed up over 10,000 car owners in a year and a half, while Zipcar took 12 years to build up its fleet of 10,000 cars.

While Zipcars often sit idle, Getaround has been able to capitalize and plans on “leveraging the 250 million cars that sit idle 22 hours per day,” according to Scorpio. Likewise, Relayrides, a service that lets you rent cars from anyone in your community, expanded last year from 2 cities in 2 states to 1,200 cities in 49 states.

With peer-to-peer, there are no parking or logistics issues, and scaling is more seamless. As Scorpio often says, “It’s about car access over ownership.”

Meanwhile, Zipcar couldn’t find a cost-effective way to increase its membership, and its growth rate hit the skids in the past three years. As the Wall Street Journal points out, Zipcar was a “prodigious money-loser” and consistently had to halt plans to move into Europe, which would take more resources than the company had at its disposal.

This deal won’t halt innovation

The news seems to have offended some commentators, who hit back with claims that such a move would stunt disruptive innovation, perhaps even knocking the confidence of younger players in the space.

Sarah Lacy of PandoDaily wrote about her many reasons for hating the deal, arguing that Zipcar has made “inroads into this oligopoly” and that with the “biggest disruptor gone … all the others are still fledgling.” She said that Avis is not a tech company and would be unlikely to push the envelope.

The deal may not be considered cool from Silicon Valley’s (somewhat insular) perspective, but it doesn’t appear to have affected morale.

As a whole, the ride-sharing space has experienced its ups and downs, most recently with lawsuits levied against services like Uber, Sidecar, and Lyft, but yesterday’s acquisition isn’t one of them.

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July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Lyft‘s the mobile app that lets you order a moustache-bearing car in minutes, and it’s now expanding to several new cities, including Seattle and Los Angeles.

The startup is not letting its regulatory troubles get in the way of its growth plans. As we recently reported, the California Public Utilities Commission demanded $20,000 in fines from Lyft and rival ride-sharing services Uber and SideCar.

With its “friendly” drivers and donation-based payment model — as opposed to a set fee — Lyft has spread like wildfire in San Francisco since launching out of beta in August. Lyft is the next evolution of Zimride, the car-pooling service that is popular with college students.

With an outpouring of public support in the wake of these hefty citations, Lyft has the confidence it needs to bring its service to more U.S. cities. Don’t expect immediate changes — cofounder Josh Zimmer reported to TechCrunch that hiring drivers and operations staff takes time, and Lyft won’t roll out to more than one city in January.

Lyft’s growing pool of users received a glowing email from the company’s CEO and a list of job openings in new cities.

It has been an incredible year. Riding together, you’ve found new friends, music, and creative collaborators while exploring every corner of this great city. Thank you for building a passionate community with us in San Francisco!

In 2013, we’re expanding our horizons, bringing the social transportation revolution to cities across the country. That’s where you (or any of your friends) come in – join our team and help us take Lyft to new heights!

Top image // Christina Farr, VentureBeat

There’s a good chance that most personal auto insurance won’t cover you when you’re driving your car for hire.

“Any peer-to-peer car sharing service is doing a disservice to its customers by not disclosing to them that they are putting their personal insurance and perhaps their own assets at risk,” said Loretta Worters, vice president of the Insurance Information Institute, a group that represents insurance companies. “These companies should let their customers know that if their vehicle is being used as a commercial venture, it should be insured with a commercial policy.”

Liability insurance covers damage that you cause. If a Lyft or SideCar driver were to hit a pedestrian or injure a passenger, the insurance carrier might deny any resulting claims, and the driver would be on the hook for the costs.

While both companies assure riders on their Web sites that they verify a driver’s insurance, they don’t acknowledge the possibility that the insurance might not pay out.

“Any peer-to-peer car sharing is, in the insurance company’s perspective, a commercial venture, so most likely [the driver] or the injured party would not be covered,” Worters said.

Lyft provides “excess” liability insurance. That means if the damage exceeds your policy limits or your insurance company refuses to pay out, Lyft’s insurance would kick in. Still, it would mean reporting the claim to your insurance company.

I asked Worters if an insurance company could drop your coverage if it found out that you were driving for a ride sharing service.

“Yes, the insurer has every right to drop you if they find you are committing fraud,” Worters said.

Rocky Agrawal is an analyst focused on the intersection of local, social and mobile. He is a principal analyst at reDesign mobile. Previously, he launched local and mobile products for Microsoft and AOL. He blogs at http://blog.agrawals.org; and tweets at @rakeshlobster.

[Image credit: Sapsiwai/Shutterstock]

In their efforts to bring disruptive new transportation services to urban residents, ride-sharing startups may be fighting a losing battle.

In the face of hefty citations, Lyft, the mobile app that lets you order a moustache-adorned car to pick you up in a matter of minutes, is rallying the San Francisco’s tech scene to speak up in its defense.

Today, the California Public Utilities Commission issued $20,000 fines to Uber, Lyft and SideCar for illegally operating. Among the charges: a lack of evidence of property damage insurance coverage and evidence of workers’ compensation insurance, and failure to enroll drivers in the Department of Motor Vehicles Employer Pull Notice Program.

It didn’t take long for the community to rally, and urge the authorities to stand down. An email signed by John Zimmer and Logan Green, cofounders of Lyft, has been making the rounds, popping into my inbox twice in the space of an hour.

In the email, the founders made clear that they responded to the CPUC “immediately” and had a positive follow-up meeting.

They also claimed to have gone above and beyond the call of duty when it comes to their liability insurance. The CPUC requires that licensed sedans carry $750,000 of liability coverage, but Lyft implemented a $1 million excess liability policy.

In their own words:

We respect the CPUC’s role in protecting public safety, and we share safety as our top priority. Lyft’s driver screening process uses criteria based on criminal background checks and DMV record checks that are more strict than any other form of transportation. We also have a higher bar for insurance. We will continue to work with the CPUC to ensure our shared goals for consumer safety are met.

The email pleads for the support of anyone with a vested interest in keeping the sharing economy alive. “Peer-to-peer transportation is worth defending and we stand by our community of mustache-sporting Lyfters,” it reads. The authors link to a petition started by a member of Change.org, the online petitioning site that is frequently leveraged by Uber users in its uphill battle against metro transit authorities.

According to the CPCU, startups like Lyft and SideCar are still not in compliance. “If something happens to a passenger while in transport with Lyft, SideCar, or Uber, it is the responsibility of the CPUC to have done everything in its power to ensure that the company was operating safely according to state law,” Brigadier General (CA) Jack Hagan, Director of the CPUC’s Consumer Protection and Safety Division said in a statement.

“That means that the company has insurance to cover an accident and that its employees are protected and are suitable drivers. I look forward to working with these companies to bring them into compliance with our safety laws,” Hagan added.

Top image // Christina Farr, VentureBeat

STANFORD, CA: With the highly public failure of its New York taxi beta, it has not been a great week for fancy car service, Uber.

To address concerns that the service is not scalable, the company’s CEO and cofounder, Travis Kalanick, made a public appearance to make one thing very clear. He is not worried. ”We know what we’re doing,” Kalanick addressed a roomful of young entrepreneurs at Startup School, Y Combinator‘s annual event at Stanford University.

At Saturday’s conference, Kalanick spoke immediately after Mark Zuckerberg took the stage.

Kalanick has been travelling around the world in an effort to launch the car service in cities like Sydney, Paris and London. “I don’t even remember the last time I spoke in San Francisco in front of an audience,” he said.

In the opening minutes of his talk, he pulled up revenue charts to show that his efforts have not been in vain. The company is making strides internationally. “More than half of our employees are not in San Francisco,” he said. “We are growing fast [at] 29 percent month-over-month.”

To succeed, Kalanick needs to prove that the company can succeed outside of San Francisco. The tech hub is the fertile testing-ground for Uber: it is always willing to adopt new services, it is notorious for a lack of cabs, and many of its inhabitants have money to burn and very little time to get from A to B.

Investors have long feared that the service will fail to resonate with people in cities which do not suffer from a dearth of cabs or public transportation. Critics like VentureBeat’s contributor Rocky Agarwal have argued there is no scarcity of yellow cabs in New York. You might see five or six empty cabs pass by while you wait for an Uber to arrive.

To make matters worse, Uber’s cab-hailing app was shut down in New York after a protracted dispute with the city’s Taxi and Limousine Commission. Kalanick felt he was fighting the good fight, and that users were on his side.

“We are building an urban logistics fabric,” he said. “The older the industry you are tackling the more protected it is by government or by corruption or both.”

New Yorkers can still access Uber Black and the relatively lower-cost UberX offering. For Kalanick, the secret to success is to accelerate the time it takes for an Uber to arrive. When the company first rolled out its service, it took about 12 minutes. Today, the average wait time is less than five minutes.

The company has also received non-stop criticism for its dynamic pricing. Uber will increase the price of its fares as more people request them (when cabs are scarce, at rush hour, and so on).  Read more about the reaction to Uber’s “surge pricing” on New Years’ Eve here.

“Prices are a bit too high,” Kalanick conceded. “I know some of you have felt that sting.”

The entrepreneur ended his talk on an optimistic note. He stressed that the numbers don’t lie — Uber’s fast-growth and deepening user-engagement is impressive.

“Whenever I have a bad day,” he said, soliciting chuckles from the audience. “I just look at our overall revenue graph.”

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The brainchild of one of Zipcar’s founders Silvercar has raised a first round of funding to in its attempt to “disrupt” the dismal airport car rental experience. It’s about damn time!

With plans to launch later this year, Silvercar’s founders have made the tough decision to only offer one car. This one-sized-fits-all vehicle is the 2013 Audi A4 in (surprise, surprise) silver.

You won’t have a fleet of cars to choose from, but on the flip side, you can avoid waiting on a long line to pick it up. It’s also designed to be cheaper than your run-of-the-mill rental company like Hertz or Avis.

With SideCar pulling in $10 million today, and Getaround speeding ahead in the peer-to-peer car rental market, I must admit that my initial reaction was, “not another ride-sharing startup!” But with a focus on business travel, Austin, Texas-based Silvercar already stands out.

Here’s how it will work: You use your smartphone to scan the Silvercar to unlock it. Previously loaded preferences – such as itinerary destinations – automatically load in the multimedia dashboard. The best news of all is that it has no physical check-in — you will be able to reserve a car through the app or website.

The downside is that if you have a large family or you’re planning to drive in extreme weather conditions, you won’t be able to order the most appropriate vehicle. But it’s a short-term use (typically a return trip from the airport to your hotel), so Silvercar has less need for a plethora of options.

“Silvercar is designed as a breath of fresh air for business travelers by revamping the often frustrating car rental process to best leverage their increasingly mobile- and technology-enabled lifestyles,” said Silvercar chief executive officer Luke Schneider (pictured left) in a statement. Schneider recently left the chief technology officer job at Zipcar.

Investors in the first-round include Austin Ventures, Michael Arrington’s CrunchFund, Ron Conway’s SV Angel Fund, as well as eBay’s Chris Dixon and Path’s Dave Morin.

Silvercar will release further information about its first set of locations in the coming months.

Image via Autoblog 

Getaround has some high-profile supporters. The peer-to-peer car sharing service recently raised $13.9 million from investors like Yahoo’s Marissa Mayer and Google’s Eric Schmidt, and now it’s expanding to Chicago with the help of Mayor Rahm Emanuel.

The idea behind the San Francisco-based startup is to make it safe and easy to take a spin in a stranger’s car. The company launched in 2009 and has grown quickly, expanding to cities like Portland, Ore.; Austin, Texas; San Diego; and now Chicago. It’s signed up over 10,000 car owners across the country. Chicago is its fifth city and is the company’s first foray into the Midwest.

With options including the Toyota Prius or a Tesla Roadster, Getaround offers car rentals from $3 an hour, and car owners make an average of $350 per month from listing their car. It makes money by charging a 40 percent commission — this may seem high, but it’s a darn sight better than leaving an unused car to gather dust in a garage.

The startup competes with Zimride, Relay Rides, and others, but has signed up more cars than any other service and recently eclipsed Zipcar. It’s competitive differentiator is the hardware kit, which lets users unlock a Getaround car with a smartphone.

Emanuel, the former the White House chief of staff to President Barack Obama, said that a service like Getaround is crucial for Chicago’s residents, especially those with a vested interest in reducing traffic and emissions.

“As mayor I am focused on improving all transportation options for Chicagoans,” he said in a statement. “This is another step toward this goal of a comprehensive transportation network and will be a win/win for the city and its residents.”

In addition, Chicago is the second city to beta-test Getaway, the new service that launched in August. It allows car-owners to rent their car out for an extended period of time and is perfect for college students or travelers. On Getaway, car owners are guaranteed $1,000 a month, or Getaround will make up the difference.

“Chicago is a natural fit for Getaround,” added Sam Zaid, the CEO and founder of Getaround (pictured above). “We believe that the city is ready for a new and different way to think about car ownership.”

Getaround, the car-sharing marketplace that makes it dead easy to take a spin in a stranger’s car, has pulled in $13.9 million in first round funding from an all-star cast of investors: Menlo Ventures’ Shervin Pishevar, Eric Schmidt’s Innovation Endeavors, actor Ashton Kutcher, and Yahoo CEO Marissa Mayer.

“Our investors want to disrupt transportation as much as we do,” said company co-founder Jessica Scorpio (pictured above). “There are way too many cars on the planet.”

Scorpio told me she was first approached by Mayer, who invests in about five or six companies a year, at TechCrunch Disrupt, where the company launched last year. This is Mayer’s first investment since joining Yahoo as CEO and follows recent investments in Airtime and Square.

San Francisco-based Getaround was founded in 2009 and has grown quickly in recent years, expanding to new cities and signing up over 10,000 car owners across the country. Scorpio told me the startup recently eclipsed rival Zipcar, which currently owns about 8,000 cars. International expansion is in the cards, but the company remains focused on the U.S. market.

Scorpio said it was the hardware that sold Mayer on the concept. Once installed, the Getaround CarKit allows cars to be unlocked via a smartphone. This is the key differentiator, as it takes the pain out of the hand-off process between renter and owner. Although Scorpio said she views the main obstacle as car ownership, Getaround faces competition from Zipcar, Zimride, Car2Go, and Relayrides, as well as a host of newcomers in the hot car-sharing space.

Scorpio told me the company plans to use the funds to expand into new cities beyond San Francisco, Portland, Austin, and San Diego and to forge partnerships with key players, such as car dealers and auto-makers.

The company may also search for new ways to monetize; it currently makes money by charging the car owner a 40 percent commission. This may seems high, but it’s a better alternative to leaving your car in a lot to slowly gather dust.

Funding aside, since Getaround’s inception, Scorpio said she had a niggling use-case in mind, one that she hasn’t been able to let go. ”A lot of people have approached us and said they would like to share their car on Getaround but couldn’t manage it themselves,” she said.

So today, Getaround also launches a product in beta called Getaway. Getaway is a new service for car owners who want to rent their car on a full-time basis. It’s an ideal option for college students, backpackers, or business travelers don’t want to sell their car or shoulder the cost of storing it.

Getaway is currently only available in San Francisco and Chicago.

On Getaway, car owners are guaranteed $1000 a month, or Getaround will make up the difference. The guidelines for Getaway cars remain about the same: the company will only accept automatics that are under-five-years old, and have accumulated less than 100,000 miles.

To ensure your car won’t be in the wrong hands, Getaround will deliver a monthly report detailing where the car has been driven and the milage. If there’s a special request (for instance, you only want to rent to an urban driver), the company’s support team is willing to negotiate.

Scorpio told me that competitors in the ride sharing space are sprouting up fast and furious, a direct result in renewed interest in the collaborative consumption space. “When we started the company, the sharing economy didn’t exist so we knew we had to change people’s mindset,” she said.

Scorpio credits social networks with improving transparency and mitigating risk for the owner. Strangers will trust each other with their most intimate possessions – their cars and homes — knowing through Facebook and LinkedIn that they are only 2 or 3 degrees of separation away.

The round is led by Menlo Ventures’s Shervin Pishevar, who will join the company’s board. This is the largest round since the raised $3.4 million in September, 2011.

Although Munich, Germany-based Carpooling declined to specify the size of the investment, other sources indicate that it’s of the order of $10 million. The cash will be used to fund Carpooling’s launch into the North American market in Q4 this year.

But will car-loving Americans take to Carpooling? “Germans love their cars too. Germany is one of the biggest car manufacturers in the world,” said Carpooling CEO Marus Barnikel. ”We will initially focus on U.S. cities which have high mobility needs but poor public transport.” 78 percent of all car trips are currently taken by lone drivers.

German car manufacturer Daimler, not to be confused with the storied British Daimler motor company, manufactures vehicles under brands like Mercedes-Benz and Smart and is the 13th largest car manufacturer and 2nd largest truck manufacturer in the world. Although a car manufacturer investing in a ride-sharing startup may seem akin to a turkey investing in Christmas, Daimler is already a market leader in short-term car rentals. Its car2go service allows customers to rent a car by the minute and has over 130,000 customers. In my own city of Amsterdam, for example, car2go runs a fleet of entirely electric Smart cars. Daimler also owns a stake in taxi-ordering app MyTaxi.

Carpooling currently offers ride sharing in more than 40 countries. Drivers rent out a seat in their cars for a specified journey using an online and mobile booking system. Passengers pay in advance using Paypal or a credit card. A journey from Munich to Berlin, for example, averages 17 EUR ($20) on Carpooling, while the cheapest train ticket on the same route costs 69 EUR ($83). The company takes a 5 to 10 percent commission on each shared ride.

Carpooling has expanded rapidly in the last few years with the advent of smartphones and increases in gas prices. In the last month the company moved 1 million people. It also claims credit for over 10 weddings between carpoolers. Passengers have varying priorities. “Many friendships, marriages, and regular driver relationships have been established over 30 million rides,” Barnikel explains. “But we also have lots of people who pick a nice car model and sit in the back working on their laptop.”

Most Carpooling ride-shares are on middle- to long-distance trips taken for leisure, for example, travelling from Amsterdam to Paris for the weekend. Passengers tend to be more flexible on departure and arrival times in that scenario than on a work commute. However, in certain cities in Germany (Carpooling’s home market), France and Italy, the service is achieving sufficient critical mass to start transporting commuters to work every day.

A typical Carpooling customer is 24-36, single, professional, has a relatively high income and level of education and lives in an urban area. Carpooling’s biggest markets are two of the richest countries in Europe: Germany and France. Given that the main selling point of ride-sharing is savings, I asked Barnikel why the service is so popular among those with higher incomes in richer countries. “Germany is also Europe’s biggest market for discount retail, ” he told me. “If you can save money, that’s attractive in most markets. The success of low cost airlines, for example, was not linked to any particular demographic.”

Carpooling integrates other modes of transport on its booking site in certain markets. Most of its users also take public transport or ride a bike at least once a week. “We are working on getting people door to door rather than train station to train station or airport to airport, ” Barnikel told me.  In Germany, the company already sells more train tickets online than any other vendor.

Carpooling provides profiles of all drivers and a ratings system that helps to keep quality high. The most common problem before the introduction of the online booking system, which requires customers to pay in advance, was passengers not turning up. Sometimes hitches also arise when drivers or passengers fail to fully read each other’s profiles so you end up, for example, with a smoker in the car of a non-smoker.

Perhaps surprisingly, given the potential safety concerns, the service is equally popular with men and women. 51 percent  of registered users are female, and although a women-only drive service is offered, it is rarely used Barnikel said.

Carpooling will not be alone in the U.S. market. Rivals include Zimride, Ridejoy, Avego, Rideshare, and eRideshare, but Barnikel believes that Carpooling’s experience in developing its product over 10 years in so many different markets will put it in good standing. In a world battling an economic recession and environmental disasters, maybe ride-sharing’s moment has arrived, even for the world’s biggest motorheads.

Carpooling was founded in 2001 and has 45 employees.

Ticketfly partnered with technology providers Aloompa and Intellitix to make event management smoother at venues, with radio frequency identification (RFID) authentication of tickets and passes, ticket scanning, and box office tools, all of which are available on Android devices and the iPhone.

For attendees, Ticketfly partnered with car sharing service Zimride to help concert-goers find carpools to events right after they have purchased tickets online. Ticketfly is an enterprise technology provider focused on providing end-to-end solutions for music promoters and venues, such as ticketing solutions, email and social marketing tools and analytics.

“Events are inherently social, and we love to facilitate the community-building component,” Ticketfly co-founder Andrew Dreskin told VentureBeat. ”Music festivals are a very interesting and exciting part of the live event landscape in the U.S. You can never pirate the live experience, so people continue to go to music events.”

Dreskin says live festivals have come to the forefront of the music industry in the U.S. with events like the Ultra Music Festival, Bumbershoot and the Treasure Island Music Festival drawing crowds both regionally and nationally. Sometimes crowds come from even further afield.

By partnering with Zimride, Ticketfly is expanding access to events and helping attendees reduce their environmental impact at the same time. ”The ability to marry Zimride’s ridesharing solution with Ticketfly will save fans and venues millions of dollars on transportation costs while creating a new community for fans to meet before and after the show,” said Logan Green, founder and chief executive officer of Zimride in a statement.

Winter is a slow time for the music festivals, so launching its new integrated product now may give Ticketfly and partners a chance to stomp out any bugs before the festival season ramps up again. In April, Coachella will kick off the music festival season followed by Bonnaroo, Sasquatch, Outside Lands and many more. These major music festivals of the spring and summer will allow Ticketfly and its tech collaborators to see how well their technology has worked together. Some Ticketfly partners are currently providing services to festival organizers such for Bonnaroo and Outside Lands, while Ticketfly certainly hopes to do so with its integrated offering.

The fees paid for purchasing tickets represent a $10 billion opportunity, says Dreskin. The face value of all tickets sold worldwide is more than $50 billion. “That’s pretty juicy,” says Dreskin.

Ticketfly is based in San Francisco, and has raised $15 million in funding. The company has 70 employees and has been generating revenue for the past 30 months, said Dreskin.

Image via Christian Holmer/Flickr

Zimride offers customizable tools to companies and universities that want to encourage carpooling. Users looking for or offering rides create profiles with information like favorite music, ride frequency, and location (you can hide your exact address), then search for matches within their organization. The service also integrates with Facebook.

Even though the San Francisco company just raised seed funding, it was actually founded back in 2007, and said it now has more than 50 customers, including Stanford, USC, Harvard, and Esurance. USC, for example, said it has seen an increase in carpool permit sales and air quality scores since joining the service.

The funding comes from well-known investors, including Floodgate (the firm founded by Twitter- and Digg- investor Mike Maples Jr.), K9 Ventures, early PayPal employee Keith Rabois, and other angels.

The news was first reported by TechCrunch. Zimride cofounder and chief executive Logan Green confirmed the details via email.

Zimride said it will use the new financing to improve user experience, build mobile applications, and add support for other forms of transportation.

Floodgate partner Ann Miura-Ko is joining Zimride’s board of directors, and K9′s Manu Kumar has also joined as an observer. The first board meeting sounds like it was awesome — Kumar reports that he was iced by the company’s cofounders. (Yes, really.)

Here’s a “mini-documentary” video about the company.

http://www.veeple.com/swf/VeeplePlayer.swf?siteId=BrFxYpvi%252FnE%253D&videoId=dcc589c6-d866-4974-98c1-3424ef510c74&userId=&baseUrl=http://www.veeple.com/&showSpots=1&showViewBar=1&showTabBar=1&autoPlay=0&allowAddComments=0&allowShare=1&allowEmbedding=1&allowFullscreen=1&allowRating=0&stopPlayingOnInteractiveClick=1&displayRelatedVideos=0&playerMode=player&playerWidth=450&playerHeight=285&isFlex=0&recordEvents=1&scaleMode=maintainAspectRatio&spotScaleMode=noScale&deploymentURL=http://www.venturebeat.com

Carpooling or ride sharing can be a great way to save gas, time and money. Current web services tend to need a period of time to plan and arrange pick-ups, drop-offs and payments. Looking to bring the process to real-time, Flinc today announced the official launch of its mobile ride sharing system.

The company claims to give users the ability to use their mobile phones through a special application that connects with GPS navigation systems in vehicles to arrange a pick-up in real-time. A user opening the Flinc application enters their current position, which is then matched to the closest networked car that has an open seat. If the driver agrees to pick up the rider, payment is automatically transferred and the vehicles GPS navigation system updates to the riders current position.

Current carpooling and ride share services are limited to web-based websites or communities that revolve around longer term planned agreements between drivers and those looking for a seat. Sites like eRideshare.com and RideShareOnline.com, gives users the ability to visit their sites and sign-up to look for drivers in their area or on their ideal routes to secure a seat. The advantage of Flinc is the ability to find a ride in real-time from your mobile phone while out and about.

The German-based company, founded in 2009, has to date receieved seed funding from friends and family.

flinc IFA Trailer 2009 (english) from flinc on Vimeo.