Scott Kirsner’s article about Thursday night’s MassChallenge awards ceremony is a great summary of what’s good about starting and growing a business in Massachusetts. I loved his comment,
When Shelby Clark, [founding CEO of neighbor-to-neighbor carsharing company RelayRides] headed back to his table after being presented his check for $50,000, I was standing next to Scott Griffith, the CEO of [traditional carsharing company] Zipcar, who is preparing to take his Cambridge company public. Clark looked over to Griffith and caught his eye. That’s the kind of Massachusetts I want to live in: one that is building industry leaders like Zipcar, and also cultivating the next wave of innovators, too, to keep them on their toes.
Coexistence: I too liked this exchange of Clark and Griffith because it’s my belief that — because of the dramatically different economic model underpinning neighbor-to-neighbor carsharing — RelayRides (where I am interim COO) can peacefully coexist with traditional carsharing companies like Zipcar. Neighbor-to-neighbor carsharing is a perfect complement to traditional carsharing in a number of ways. Moreover, I believe that the efforts of RelayRides will actually result in increasing the total “carsharing pie” in a way that the classic line, “a rising tide carries all boats” will apply. Let me elaborate.
Different Economic Model: Neighbor-to-neighbor fills a number of gaps left by traditional carsharing companies. These gaps can only be filled with the very different economic model that underpins neighbor-to-neighbor carsharing. The fundamental economic difference vis-à-vis traditional carsharing is that, when cars are added to a neighbor-to-neighbor “fleet”, no new cars are actually manufactured or purchased. Each RelayRides car already exists; it’s owned by a neighbor of yours who cares for it deeply, but who uses it less than an hour a day. The rest of the day, your neighbor wants to share their car with you, via RelayRides.
Lower Utilization Percentage: The economic benefit of not having to manufacture and purchase a new car means that the only capital expense that needs to be covered is the cost of the in-car device; there is no need to cover the cost of a new car. The result is that the neighbor-to-neighbor economic model requires a utilization percentage far lower than is required in the traditional carsharing model.
Result: Filling The Gaps: It’s this fact that lets neighbor-to-neighbor carsharing “fill the gaps” and coexist with traditional carshare companies like Zipcar. For example, neighbor-to-neighbor carsharing fills the “availability” gaps when traditional carsharing cars might not be available at peak times. People who can’t find availability of a traditional carsharing vehicle can turn to one of their neighbors’ vehicles. Second, neighbor-to-neighbor fills the “geographic” gap in neighborhoods where traditional carsharing cars are not available close to the homes of folks who do not live near a commercial carsharing lot.
Introducing New People to Carsharing: Finally, it’s our belief that by bringing carsharing right into the neighborhoods of potential users, RelayRides will introduce carsharing to many people for the first time. When these people travel away from their neighborhood they will utilize traditional carsharing services, like Zipcar.
Bottom line: adding neighbor-to-neighbor car sharing to a community with traditional carsharing is one of those instances when one plus one equals more than two.
15 December 2010 at 4:54 PM |
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