NEW YORK (MainStreet)Several months after Avis Budget Group's (CAR) $500 million acquisition of car-sharing juggernaut Zipcar, RelayRides, the nation's largest peer-to-peer car-sharing marketplace, announced the acquisition of peer-to-peer sharing platform Wheelz in a demonstration of consolidation in the car-sharing marketplaces.
This new move also heralds the power of peer-to-peer car-sharing over the fleet-based model of Zipcar. Peer-to-peer car companies simply emulsify the relationship between car owners and those in need of a car. Though Zipcar controls 75% of the $400 million car-sharing market, the fleet model is increasingly old school in the world of the "share economy" with Airbnb and its ilk allowing the haves to share with the have-nots. Because the high overhead of managing a fleet, renting parking lots, and dealing with a corporate infrastructure makes for a low margins business, Zipcar has to charge more.
P2P users from RelayRides can snag a set of wheels for $15 to $30 a day--with a much larger variety of models and segments at their disposal--whereas Zipcar users in New York City, for example, have to shell out $25 for an application fee, $60 for an annual membership and then $9-an-hour or $83-a-day. Many of the logistics are transferred to the usersin the P2P model, lowering the price.
"The sharing ecoomy is really here to stay--it's growing and taking roots" said RelayRides CEO Andre Haddad. "What we're seeing is that peer-peer car sharing is evolving from being an hourly based model which was the focus over the last two years to being a mainstream rental."
Since the launch of RelayRides in 2012, it has expanded to more than 1,450 cities in all 50 states. Wheelz's DriveBox technology comes with the deal and makes peer-to-peer sharing more convenient by allowing renters to reserve, find, and unlock a car in minutes from their smartphone without the inconvenience of having to meet the owner in person.
That's disrupting the traditional fleet rental model.
"Software is eating up the industries that have been here for decades," Haddad said. "Software is revolutionizing."
--Written by Ross Kenneth Urken for MainStreet