| February 2011
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By Tim Innes
RelayRides founder Shelby Clark (right) invites Ryan Morehouse to check out a Mini Cooper on Alvarado Street, a car made available by a neighbor. Photo by Pamela Gerard
Shelby Clark was inching his bike down an icy Cambridge, Mass., street a couple of years ago when a light bulb clicked on in his head.
“Why was I pedaling two-and-a-half miles across town in the dead of winter to pick up a ZipCar when there were hundreds of cars just sitting there, some clearly unused for weeks?” he recounted. “I realized there was this amazing resource just waiting to be tapped. We just needed to figure out a way to connect people.”
Clark, who was studying for an MBA at Harvard at the time, had earlier seen the power of peer-to-peer relationships while working for Kiva.org, the San Francisco microfinance concern. In the same way that Kiva connects lenders and borrowers, he envisioned a car-sharing business that would connect owners of cars with neighbors who needed to borrow one. Smart phones and the Internet would help make such connections quick and easy.
Clark’s epiphany led to his founding RelayRides, which began in Boston last June and expanded to San Francisco in December. Clark moved to the city Dec. 1, establishing company headquarters near the Giants’ ballpark and renting an apartment near 25th and Church.
Having left his Toyota Prius in Boston, Clark, 28, uses public transportation and an electric bicycle to get around. For longer trips, he, like other RelayRides members, borrows cars.
Unlike traditional car-sharing services like ZipCar and City CarShare, which own their vehicles and station them at sites around the city, RelayRides owns no cars. Instead, it links car owners who’d like to earn some cash with cost-conscious folks who want to avoid the car-sharing services’ fees and higher rental charges.
Rates Start at $5 an Hour
One such owner is Caterina Rindi, who became RelayRides’ first San Francisco lender after reading about it on the online magazine Sharable.
“I was driving my Prius only three or four days a week,’’ said Rindi, 42, who operates a food business from her Potrero Hill home. “Car-sharing benefits everyone in that it leads to fewer cars on the road, less congestion, and less pollution. And I’m actually making money. Weekends are especially popular.”
Owners receive 65 percent of rental fees, which start at $5 per hour (including gas and insurance). RelayRides takes a 15 percent cut, and the rest goes for insurance. Borrowers are responsible for the first $500 in property damage they cause.
Clark said owners, who must keep their cars clean and in good working order, typically earn $250 a month, though $600 to $700 is possible. He said the first month he rented out his car he received $420, which nearly covered his car payment and insurance premium.
Ryan Morehouse swipes a smart card to gain entry to a Mini Cooper on loan from other local drivers through RelayRides. Photo by Pamela Gerard
Noe Valley in the Headlights
So far, RelayRides has signed up “a little more than 50 vehicles and 1,000 borrowers,” most of them in the Boston area. Here in San Francisco, the company is making its first big push in Noe Valley, which Clark believes is underserved by the competition.
Clark said he chose to focus on Noe Valley for the same reasons he opted to live in the neighborhood.
“It feels like a small town within San Francisco. Community is very important to me, and Noe feels like a place where my neighbors will stop to say hello, and lend me some sugar (or their car!) if I need it.”
In addition to the neighborliness, he said, “people care about the environment. And the parking is generally good.”
If RelayRides catches on, vehicles could be available on nearly every block.
“In Boston, we created an incredible community of owners and borrowers, a really tight group of people,” said Clark. “I think Noe Valley will embrace [car-sharing] the same way.”
Clark grew up in the Denver area and studied biomedical engineering at Northwestern University in Evanston, Ill., on a swimming scholarship. After graduation, he worked as a management consultant before joining Kiva in 2007. It was there that Clark “found my spark for social entrepreneurship,” which led to the Harvard Business School and the eventual founding of RelayRides.
He started RelayRides on a relative shoestring—$500,000 raised from “a couple of angel investors.’’ Expansion to San Francisco was made possible by a $4.5 million cash infusion from August Capital of Menlo Park and Google Ventures, the venture capital arm of the Mountain View search giant. Both firms are providing managerial assistance as well.
The company has 15 employees divided between Boston and San Francisco and expects to add more. “I can see us quickly outgrowing our offices and having to find a bigger space in SOMA,’’ said Clark.
RelayRides is using the funds it has raised—along with a $50,000 prize it was awarded by MassChallenge, a business incubator—to build its technical infrastructure, enhance customer service, and raise its profile, especially in Noe Valley.
“We’ve placed ads on the bus shelters at 24th and Valencia, 24th and Church, and 24th and Diamond,’’ said Marketing Manager Stephanie Rapp. “We’re also doing ‘grassroots marketing’—handing out postcards on 24th Street and going door to door in the neighborhood.”
Smart Card Opens Door
Joining RelayRides is easy and, for the moment, free. In general, members must be 21, have been driving for two consecutive years, have a valid license and an exemplary driving record. Once they’re registered, borrowers receive a smart card that opens the car they reserved and unlocks the ignition.
For owners, RelayRides installs the locking mechanism and a GPS tracking system. It also turns their cars into rolling billboards, with large blue decals inviting others to “Borrow My Car.”
Because there’s no transfer of keys involved, owners and borrowers generally don’t meet. Some owners—Catarina Rindi among them—place a note card on the dash telling borrowers a little about themselves.
Clark said he sees huge potential for growth in San Francisco—30 percent of households here don’t own a car. In his eyes, car-sharing would be a tremendous boon for what he calls “one-and-a-half-car families”—folks who occasionally need a second set of wheels but can’t justify the expense of owning another car or truck.
RelayRides was just what Ryan Morehouse needed when he moved here without a car from Missoula, Mont., three months ago to take a tech-support job with Dropbox.com. Morehouse, 24, learned about the company while researching car-sharing options online. While he usually walks or takes public transportation, Morehouse borrows cars for trips to the grocery store.
“RelayRides has been great,’’ he said. “They have a lot of room to grow, and while there are things that need to be improved, the concept itself is great, and so far I have nothing but good things to say about them. I would definitely recommend it to others and have already had a few friends sign up.’’
For more information or to sign up, go to www.relayrides.com.
RelayRides CEO Shelby Clark thinks Noe Valley is a prime location for his car-sharing service, because people are friendly and “care about the environment.” Photo by Pamela Gerard