Peer-To-Peer Car-Sharing Startup Wheelz Launches In San Francisco To Take On RelayRides And Getaround

Peer-to-peer car-sharing is growing in popularity and consumer adoption, as renters are now looking beyond traditional rental firms like Enterprise and Avis, and even beyond local short-term rentals from companies like Zipcar. The idea of renting from a regular person, rather than a monolithic firm, is finally catching on. Meanwhile, car owners are looking for ways to make money from expensive assets that go unused most of the time.

Already, car-sharing services like RelayRides and Getaround have launched to take advantage in this change in consumer behavior. And now there’s another peer-to-peer car-sharing marketplace in the San Francisco market — Wheelz.

Wheelz originally launched in early 2011 and focused on the university market, rolling out in UC Berkeley, Stanford, USC, and other college campuses. After successful launches there, the company is now ready to expand to the general public. Well, to the general public in San Francisco, at least.

With the launch in its first urban market, Wheelz will be going up against existing peer-to-peer car-sharing services RelayRides and Getaround. But it seeks to differentiate itself by installing hardware in cars that will facilitate the process of actually renting cars over the Internet and on mobile devices.

See, one of the big issues when using Getaround and RelayRides is that most of the time, users have to not only agree to rental times and terms, but also have to exchange keys to the vehicle in question. That contributes a significant amount of friction in the system, as those who have cars to rent and those who wish to rent them have to sync up their schedules, etc. I’ve personally tried to use GetAround and RelayRides a few times, and each time was discouraged by the lack of responsiveness and the extra time it took to set up meetings.

Wheelz gets around that by installing what it calls a DriveBox into its users’ cars, which allows renters to have immediate access to rentals as soon as they are approved. The system works pretty much in the same way that Zipcar’s hardware works, letting users with a DriveCard unlock a vehicle and drive away with it without having to set a time to meet the owner. That eliminates a lot of the friction that currently exists in the car-sharing market. For car owners, the DriveBox also allows car owners to track their cars’ location via GPS.

The added convenience of the DriveBox means that the vast majority of rentals happen under short notice — within two hours of the time they need a car. That impedes on typical Zipcar territory, as it makes car-sharing a more on-demand experience than it has been previously. It also means users are more likely to come back, as about two-thirds of users are repeat renters. Meanwhile, car owners are making an average of $250 per month through the service, and up to $1,000 a month.

Of course, Wheelz isn’t alone in trying to make the rental experience more on-demand. Both Getaround and RelayRides are trying to do the same: Earlier this year, RelayRides announced a partnership with GM which allows car owners with OnStar installed to make their cars more easily accessible. And Getaround has also introduced an on-demand version of its service, called Getaway, in which it installs hardware into cars and manages instant rentals for their owners.

Earlier this year Wheelz announced that it had raised $13.7 million in a strategic investment from Zipcar and Detroit-based transportation tech investment specialist Fontinalis Partners. Other investors in the startup include former Facebook VP Chamath Palihaptiya, Felicis Ventures, Red Swan Ventures, and angel investors such as former Ernst & Young Vice Chairman Jim Freer and Playfish founder Sebastien de Halleux.