RelayRides Ends Hourly Rentals And Device Support To Focus On Long-Term Peer-To-Peer Car Rentals

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Peer-to-peer car rental marketplace RelayRides is moving to end support for hourly rentals, due to lackluster growth in that side of its business. It will also stop supporting devices that had been installed in lister’s cars to enable instant access to vehicles. The strategic shift will make it more like Enterprise and less like Zipcar, as it ends support for instant, on-demand car rentals to focus on multi-day opportunities.

RelayRides was founded with the idea of providing instant mobility to everyone, whether they owned a car or not. With the same peer-to-peer, sharing economy business model as Airbnb, the company hoped to solve the problem of making a car available to those who needed one from someone who owned one nearby. To that end, it began installing devices in cars that would allow instant access, and partnered with GM and OnStar to allow renters to instantly access vehicles that they’d rented, without the owner having to turn over his or her keys.

Over the last few years, however, RelayRides has found that its initial ambitions didn’t quite gel with what renters wanted from the platform. While it was set up for short-term, hourly rentals, that type of demand has paled in comparison to the number of users who need to rent a car for multiple days.

Today, hourly rentals account for just 5 percent of the company’s revenues, but it’s been a major source of friction for the company. The company has grown revenues 10x over the last two years, but the hourly part of its business has remained flat amidst that growth. Those rentals typically have to be made in short periods of time, and were part of the reason that the company invested in installing devices into cars to enable renters to access cars without having to meet with the car’s owner to hand off keys.

Meanwhile, the company has seen incredible growth on the daily and multi-day side of its business. That growth has come as RelayRides has opened up its business in a pure peer-to-peer fashion, allowing anyone to list his car, regardless of where it resides.

It’s recently pushed into allowing users to list their cars at airports, taking on huge incumbents in that market. After launching initially in June, RelayRides now has cars listed at more than 230 airports, providing an alternative to traditional airport car rental companies.

With that in mind, RelayRides has made the strategic decision to end support for hourly rentals and instead focus on daily and multi-day opportunities instead. And it’s also moving to end support for devices that it’s installed in user’s cars, as well as limiting the support it provides for OnStar vehicles.

While the company is doing away with OnStar support, RelayRides CEO Andre Haddad says that GM will remain a strategic partner and investor in the company. GM invested $3 million in RelayRides in October 2011, as the company was looking to integrate with GM’s OnStar.

RelayRides has raised $30 million since being founded in late 2008. Other investors include Google Ventures, August Capital, and Shasta Ventures.