I worked for a startup that had a similar business model: some car dealership has a fleet of cars depreciating in value (last year’s models, loaners, trade-in cars) and they provide their inventory to the rental startup to partially cover the losses.

And it seemed like a great idea, at first. Customers had an option to either pay 2 to 3 times less for a normal boring rental car, or… to pick up something nice that had a V8 and leather heated seats in it. The other part of the equation was the customer service: in order to compete with Hertz, Avis and others, it had to be exceptional. And it was.

There was only one problem. Renting out used cars was only a temporary and partial solution for the dealerships. Eventually, all these cars had to be sold. But, as it turned out, if you’re a dealership and if you’re renting out a car for 2/3 of the month, you’re constantly losing opportunities to sell it. Unsold used cars depreciate in value for evenn longer periods of time, take up more and more space… and those rental earnings no longer make financial sense.

Hopefully it won’t be the same case here.

Super good point. I've definitely run into that objection while trying to sign on used car dealerships--i.e. that they can't sell the car if it's being rented, so putting it on our platform might mean forgoing a sale.

But that's fine, because it basically means that dealerships typically only list cars that they have more than one of. So for example, if they have three Audi A4s in inventory, they might list only two of them with us. When they sell the other one, they'll take an A4 off Carve and put it back into sales inventory. In other cases, dealers will give us cars during periods of low sales and then putting them back into inventory when sales pick back up, thus minimizing the risk of a foregone sale.

Just to play devil's advocate...

But wouldn't a car dealer try to have a variety of cars models instead of multiple cars of the same model? Wouldn't it be better for them to be able to show a potential customer a variety of cars rather than just one model? For example, if they could only have 3 cars, wouldn't it make more sense for them to have an A4, a BMW 3, and an Acura TLX (for example) rather than 3 A4s?

Or maybe used car dealers have significantly more stock than I'm giving them credit for?

It's not about selection. Used car dealers buy what they can sell, and what they can get cheap at auctions.

Not for an Audi dealership.

It seems to me that you could also rent to people who would wanna try the car before they buy it. Heck, put that in the app. "Get 10,000 airline mile on your credit reports right now of you buy this rental!"

What about mileage, wear and tear? It doesn’t take much for a depreciating new car to fall into used car status.

I said something similar downthread.

Just to put this into perspective: when these dealers bring their vehicles to auction if they want to sell them, they'll literally bring them to the auction the morning of the sale, and then leave immediately when its done. It's a really big deal to have it off of the lot. In fact lots of the innovative work being done in the remarketing space is to decrease the amount of time these vehicles have to spend off the lot (mobile check-in, mobile CRs, etc.)

I've worked pretty deeply in this industry if you guys are interested in chatting, drop me a line. Email in profile.

For traditional dealerships, the cars not being on the lot does seem like a potential problem. But I'm seeing plenty of cars on the road with Carvana license plate frames these days, so there seems to be some willingness to buy a used car sight unseen over the internet (at least for relatively new cars in good shape).

If Carve could sign up Carvana as a provider, that could be a major source of cars, and Carvana's customers don't expect to be able to bring their car home today. Right now it looks like Carvana has a nationwide inventory of ~16000 cars, although I don't know where those cars live, relative to human population centers.

On the other hand, Carvana isn't Uncle Willy's Used Car Lot ... if this is such a good idea they've probably got the talent to implement it in-house.

Do you really need to have the car physically in order to sell it? Can't you just have a comparable display model that is used for test-drives? When sale progresses, then you can show them the actual vehicle and sell it to them for a discount.

If the dealership only sells new and last year’s models, it’s probably less of a problem, though there might be a situation, when there’s only one or two models with a specific level of trim (that the potential buyer is interested in) left in stock and they’re all rented out. Assuming that all of these cars have similar levels of wear, which is not always the case. And even then many potential buyers prefer to have a look a exactly the car they’re buying.

And if it’s a used car dealership or a dealership that accepts trade-ins, there’s going to be a handful of models in single quantity.

For used cars, you absolutely need them on-site. The wear and tear is a primary determinant in price.

You also have a very diverse lineup on a used car lot, so the odds that you have something legitimately comparable is very low.

Is this for new or used cars? If I was buying from a dealer that was trying to sell me a new car with over 500 miles or so I would consider it a used car and expect used car pricing. Isn't the new car depreciation the biggest downside to buying a new car. If they are renting new cars don't they essentially take a huge 25% hit on the sale price of the car?

Also If I found out a dealer was doing this without disclosing it at the sale time my next stop would be the state attorney general office.

>30% cheaper any other comparable option

I have a problem with this - the prices you list are much higher than comparable offerings from the national chains. Maybe that's because your pricing is more transparent? If so, you should bake the user's drive-away pricing right into the marketing of the page and compare against "the other guys". Or have a cost calculator that shows how much they would be saving.

You have a super-interesting value prop, but none of it is really available on the site. Even a dorky "how it works" on the home page would be nice.

Totally makes sense.

The prices we're showing on the site are the all-in daily rates. So if the price for an Explorer is $65/day and you rent it for 2 days, you'll be charged $130. Whereas when I look at Hertz, the price for renting a standard SUV for their downtown location from the 28th to the 30th is $140 per day, but for two days the total all in cost is $320 without any extra add-ons.

It might actually make sense for us to show the prices on our site without taxes+fees included so as to look comparable with other companies' prices.

I am not sure where you are getting the Hertz pricing. I went to their site for SF and selected an "Intermediate SUV" and those exact days and it's giving me $184 with all fees included. It's quoting me $306 for a whole week. Comparing daily rate to daily rate may actually be misleading here.

It probably doesn't matter that much - I suspect that for your target clientele (urbanites who need a car for a weekend trip), this is probably the range you want to be competitive in anyway.

The problem is that other companies taxes and fees can vary widely. Plus, they will have a high pressure insurance pitch when you rent. Not sure if your product includes that or not.

> high pressure insurance pitch

Them: would you like to purchase insurance?

Me: No, I have my own thanks.

Them: okay.

Maybe since I rent almost exclusively from airports, I have a biased experience, but I don't think of rental insurance as being high-pressure.

I think that when you walk up to the counter, they instantly judge you on whether you might be suckered for the insurance or not. If you can somehow demonstrate that you are an experienced, frequent renter by your demeanor then you are much less likely to get the intense pitch.

I try to do this by having my credit card and drivers license in my hand and putting in on the counter right when I walk up. I also don't ask any questions about anything and give very brief answers to all their questions.

They’ll always claim your insurance almost certainly doesn’t cover rentals, hoping that you don’t realize it almost certainly does.

(I also find airports to be the WORST possible environment for this kind of thing; you’re always rushing to return your car so you can catch your flight. You are forced to just accept that the scratch on the back left bumper wasn’t there when you rented the car, because fighting about it will cause you to miss your flight. So it’s a $500+ repair fee or a $500+ plane ticket. They have you over a barrel.)

> They’ll always claim your insurance almost certainly doesn’t cover rentals

I've never had such an insurance pitch. They usually pitch a “damage waiver” gap insurance which assures that any amount not covered by your insurances deductible is covered.

> I also find airports to be the WORST possible environment for this kind of thing; you’re always rushing to return your car so you can catch your flight. You are forced to just accept that the scratch on the back left bumper wasn’t there when you rented the car, because fighting about it will cause you to miss your flight.

Never had that experience either, everytime I've rented at a major chain we've done a damage walkaround at pickup, often the rental agency employee has noted things I would have missed, and on return (even at airports!) there's never been a problem.

Of course, I've never been so late back to the airport with a rental that pointing out that the damage was identified on the pre-rental walk-around would jeopardize my flight, either.

Or even better - walk into Hertz Gold, get into any car and drive away. If you rent with any frequency at all it makes sense to join a program.

I always get the “what company? What are your deductibles?” which seem custom built to create some doubt in my mind.

I've never had a high pressure pitch, and insurance is a good idea so you can walk away...

Many major credit cards include a rental car provision, if you use the card to pay for the rental - definitely worth looking at that, as it saves money, and you have an established relationship with the card company.

You may not even need additional insurance. Some insurance providers cover accidents caused by you, no matter the car you're driving - so long as it's not your permanent car.

For example, you borrow your friends truck and wreck it, etc.

This might not be enough. Rental car companies charge not only the damage done but also any revenue lost on the car while in service. Usually the credit card rental insurance will cover this gap.

The prices seem pretty hight to me, certainly not cheaper than the national brands.

If you rent the car for just 1 or 2 days, its pretty comparable to the national brands (but certainly not 30% cheaper). The cheapest car they offer is $45 per day, while the national brands seem to be about $55 per day or $90 for 2 days (in the city itself. Airports are much cheaper).

Any periods longer than that and the pricing breaks down. For a rental of 1 week, you can get a car from Alamo for $200 in downtown SF, but its $315 from carve.

Also, I've rented a lot of cars in my life, and the quoted price is always what I pay. They try to upsell you on two things - the insurance, and the prepaid gas, but as long as you say no to them, you shouldn't be charged any more than the quoted price.

That being said, depending on how smooth the pickup service was, I would consider using this. The worst part about renting a car is going to the office, watching someone type into a computer for 15 minutes (what are they typing for so long anyways?), and trying to upsell you on a bunch of crap. If I don't have to deal with that, and the price was comparable, I would certainly go for it.

2 questions

1. how do you handle paying for gas?

2. are there any mileage limits?

We're definitely trying to make pick up and drop off as seamless as possible--literally just call the Uber, get to the lot, show the attendant your reservation, and drive off. The rental car branch experience you're mentioning is an experience we think we can beat for sure.

On price, typically the cheapest cars they're offering are slightly lower end than our cheapest, though we're definitely trying to add some more budget cars to our service. Also, as our insurance costs go down, we'll be able to lower prices--maybe not massively, but I think it will certainly make our service an easier sell.

Re: mileage limits, we don't have any. With gas, we give it to customers on a full tank and ask that they return it full.

Wouldn't unlimited mileage have direct negative impact on resell value of the cars, forcing dealerships to factor that in and increase rental prices?

Im interested in how this works on the dealer side. Most dealers don’t own their inventory, they’re financed through “floor planning” companies like AFC.

Dealers pay substantial fees for the short term credit required to keep these things on their lots.

It seems like bad business to pay a huge finance fee only to rent the car out and have it not be on your lot anymore.

I’m also pretty curious about the tax and registration implications here. Dealers currently enjoy very different insurance, tax, and registration modalities than consumers do. State regulatory bodies are really sensitive to fraud in this space (getting a dealers license so you don’t have to pay tax on your super car is a common structure). If you are now buying/financing vehicles for the purpose of renting them out, it seems like you’re in a different classification than an automotive dealer.

Seems to me that targeting consumers a la Turo is much smarter. Curious the rationale surrounding this model.

Once floor planning and depreciation are factored in, it still makes sense to put certain new cars on our platform, because off the lot depreciation is less substantial and rental revenues thus offset these costs. On other cars, namely luxury cars, you're absolutely right that it's not profitable to put new cars on our platform (though it still makes financial sense for used luxury cars).

The reason we're targeting institutional owners (i.e. dealerships) rather than individual owners a la Turo is because it's generally less expensive to acquire dealership cars (i.e. much easier to onboard a dealership group with hundreds of cars than to get consumers one by one).

> to put certain new cars on our platform

“New” cars? Wouldn’t the act of renting them out transform them into used cars and illegal to sell as new?

This is amazing, wish you'd launched on Friday and I would have been one of your first customers.

I live in SF, needed to go to an event in San Jose with 2 other friends who live in the city. Looked at all the options on Friday. Zipcar needed a membership card which I didn't already have, Turo was slightly more expensive for the car near me ($60/day), Lyft Rental was super-duper expensive ($109 for the day), Lyft rideshare was even more so ($120 each way). Ultimately went with National, which due to my company's corp plan, was $40/day ($60ish retail) for any car (got a sports car), with CDW and liability and no deductible (both due to corp plan) with a slow checkout experience in SoMa. With Carve offering an (admittedly less nice) car for $45/day with Uber credits both way and a quick checkout, I would definitely take that up. Would be even nicer if there was a loyalty plan (so that my rentals for work can subsidize my private ones) and home delivery.

Quick UX bug: On the latest version of Chrome on a laptop, if I select a pickup date and then the same date as my dropoff, it seems to clear the pickup date. I can still successfully hit search and see the right results.

Ahh, we'd love to have had you try it. Next time :)

Loyalty/membership program is something we've been thinking about and will likely implement sometime over the next few months.

Great bug catch!

Perhaps, if you have not already, put in a "buy this car now" feature into the app for the dealer and the clients. It should spring up after a certain amount of time, and/or at journey end.

That way the dealer can use this as a way to manage clients trying before they buy, and every rental client is a potential buyer.

Obviously allow the dealer to make offers to the client, but non-obviously allow the renter to make offers to the dealer. And obviously take a (small to start) commission.

That's a really interesting idea. Only problem I foresee is that we might have rentals on that car lined up into the future, though we do have duplicates of most of our cars so we could get around that.

and the dealer can always get them into a new/different colour vehicle.

Or, even better, you could just upgrade the next client to a higher tier (unless the client, of course, disagrees when communicating this upfront or the higher tier is fully booked). I guess the cost of the upgrade to the next client is definitely covered by the sale of the car you had already reserved earlier.

This makes no sense... car prices are $45-65/day, but you get $40 in Uber vouchers to get to and from the place you got to pick your car up, leaving $5-25 for gross profit. There's no way that can be made profitable. That's $1825-$9125 gross profit/yr if you rent it out 365 days a year... This has to pay for depreciation, insurance, maintenance, and have a profit margin for Carve and the Dealership...

Not everyone will need the full voucher amount, maybe some people will rent it multiple days, but still, if you offer this, people will use it instead of asking a friend to drop them off/take a bus/train, etc...

You get $20 total in Uber credit, not each way. Also, the voucher only works for trips that either start or end at the parking garage, so can't be used for other random trips.

True though that reservations become more profitable for us the longer they are.

Step 2:

> We’ll pay up to $20 for your Uber to the dealership pickup location.

Step 3:

> We’ll send you another $20 Uber voucher to cover the ride back.

Oops, thanks for catching that! Error fixed :)

Maybe fix your downvote as well...

Do the dealerships sell the rented cars as new or used? Do they disclose that a car has been used as a short term rental?

A car can be sold as "new" as long as the warranty in service date has not yet been activated. Dealers use "new" cars as demos, for test drives, and intra-dealer transfers and deliveries.

If you ever go to buy a new car and it has more than 20 miles on the odometer, you should verify the warranty in service date before buying. If it has been activated, you should be getting a price that makes the transaction financially worthwhile.

Anyone who knows what they want out of a "new" car isn't going to want to accept one that already has 50+ miles on it, and 50 already is stretching it.

As a potential new car owner, you don't know how that car was driven for those tens or possibly in this case hundreds of miles.

Maybe not everybody cares, but there will definitely be a segment of the market that does. I don't think that's really an issue for this startup, but would be for any dealer they're working with that doesn't want to take significant hits because of it.

Since the cars have to be registered to be on the platform, dealers must sell the cars on as used and disclose that it's been used as a rental car.

Sounds like it’d be an unattractive deal for the dealership, no? They have to take the hit on the depreciation. Would the profits from rentals cover that?

There are plenty of cars on a dealer’s lot that they’d love to squeeze extra value out of. This isn’t for new cars with the plastic still on them, it’s for last year’s model that didn’t sell, demo units, recent off-lease trade-ins, etc.

I could see this working quite well.

>> last year’s model that didn’t sell, demo units

Those are both 'new' in the dealership's eyes

It's very close to an already proven business model:

Enterprise rent-a-car buys new cars, rents them, and then sells them at their own dealerships. They time it so they buy the cars as cheaply as possible, and then sell them when it's most profitable.

So, they do things like buy excess inventory of convertibles in the fall, and then sell them as used in spring.

IMO, I suspect that, for this business, most rentals will be 2-4 year old new-ish cars that are sold as used: Lease returns, trade-ins, ect.

Rental cars also have much lower value than non rentals

Yep, that's the exact rental car company MO. By providing the demand side, we're allowing car dealers to do what car rental companies have been doing for the last 50 years.

Just a thought on that. I have the impression that your business model is a platform, right?

In practical terms you will one day have to manage the schedule of your rentals to allow dealerships to sell cars whenever they want, regardless of the booking situation of a given car, somewhere above you already hinted at that problem. This becomes easier with scale as more comparable cars will be available. But at that point you basically have a rental car company to run. Unless you figure out a way to do that automatically, which would be a great value proposition in itself.

Honestly, I prefer renting a car for a weekend before I buy it.

Two years ago I rented a Pacifica to move a snowblower, and my wife liked it so much that she talked me into buying one.

The dealer was confused when we told them we didn't need to test-drive the minivan.

Several Toyota dealers where I use to live offered rentals.

Most of the big players, have a small "fleet" they use as loaner vehicles (maintenance, body work, etc). Since new cars have pretty big markups, they run them for a year and basically take a small loss when they go to sell them.

It seems like this system provides the missing piece to easily rent idle vehicles from the "loaner fleet".

How do you find out about this? I'd love to know where I can rent a Sienna or something for a road trip, and the rental companies are terrible at actually having the car you "reserved".

This is a good start: https://www.toyota.com/rental/index.html

You can also search Google/Bing for local dealerships and check if they have a rental section.

------

We're planning to do something similar to test some of the lane keep systems on a long road trip.

FWIW, the lane keep assist in the Toyotas is still pretty rough. I test drove the 2019 RAV-4 Hybrid a couple times, and it is unusable in the right lane (it will steer you into an exit barrier, trying to keep you centered between your left lane marker and the diverging exit lane marker). Even in a center/left lane, it still ping-pongs around more than I'd like. That is to say, I could imagine getting pulled over on suspicion of drunken driving, and sheepishly saying "I'm sober, I'm just using the LKAS, which performs roughly as well as a drunk".

The Honda system seemed better (2019 CRV) to me, though I didn't test it for quite as long.

Interestingly, we recently rented a new Ford Escape with radar-controlled adaptive cruise control and lane-keeping. I was pleasantly surprised that it worked as well as it did, and didn’t try to steer me off at exits, etc....

Obviously, it only works when the road is well-marked. And I did find that it usually put me a little further to one side of the lane than I like, but maybe it’s just me that’s off and not the car.

Overall, I had a good enough impression that this is now a feature that I will actively look for on any new car we might buy.

Thank you!

I'm really interested in LKAS, but none of the car bloggers seem to touch it.

We have a lot of country highway driving and LKAS seems like a nice way to reduce fatigue. Bummer that it's not up to par yet.

Yes, this is one of the critical features that is holding up my purchase of a new vehicle. I am holding onto a 12-year-old Volvo wagon because I'm not sufficiently impressed by any of the current offerings. The RAV4 Hybrid gets great mileage but has not-great LKAS and the CVT is very loud; the CRV isn't a hybrid (coming to the US next spring) and the LKAS seems OK but not amazing; and the Subaru Outback is a great vehicle with good pricing, but it's not hybrid either and the EyeSight system hasn't been updated since 2017.

If Toyota were committed to OTA updates, I'd probably have bought a RAV4 by now. But if they're going to keep the driver assist technology static in the hopes of getting you to upgrade sooner, I'm not going to buy until the tech is up to snuff. It's also pretty lousy that all of these companies brag about how all of their driver-assist safety tech is included in the base model — but they force you to upgrade if you want blindspot warnings. For me, that's a much more critical and commonly-used feature than automatic braking, for example.

As for the car bloggers, Tom Voelk sometimes touches on it, and I try to encourage this by commenting about it or asking about it in the comments.

> Sounds like it’d be an unattractive deal for the dealership, no?

Not if the car is a trade-in that would be sold as used, anyway. Otherwise, I can't see how it makes sense: it takes a lot for rentals to make up for the “new” to “used” transition.

There are car rental companies, so I would assume that a car rental can cover the cost of a small deprecation on a car.

> There are car rental companies, so I would assume that a car rental can cover the cost of a small deprecation on a car.

But can a rental that is simultaneously trying to undercut the incumbents on price while exceeding them in service? That's a harder question.

It seems like the big innovation this service is offering is (aside, presumably, from the standard startup initial subsidy of investor cash funding artificially low prices to build position) is leveraging a short-term market fluctuation that leaves dealers with unusual sunk unsaleable inventory costs that are, in effect, subsidizing the rentals from money that the dealer was going to lose anyway, but those go away if either sales pick up or dealers adjust to the new normal of sales levels.

Exactly right. The rental revenue more than offsets depreciation within 1-3 months on the platform (thought it does depend on the model). The important thing to remember is that a lot of larger car dealers are actually getting better deals on cars from manufacturers than rental car companies.

When it comes to luxury cars, the depreciation tends to be steeper up front, so they'll need to be on the platform longer to make up for depreciation. We also take used luxury cars.

Typically the minimum rental age is 21 but I see in your FAQ it's actually 25 for Carve[1].

I feel like there is a huge market for ages <21 as that would be the time that new adults would need a car and would not necessarily accept the responsibility of paying monthly loans or have access to credit that would allow them to buy one outright. They would have the capacity to have enough money saved to rent a car for a few days or weeks, but they are turned away by every player in the space.

I guess this is more of a general question than pointed at you, but since you guys have researched the market maybe you'd be equipped to answer it. How come nobody offers rentals to <21 drivers? Furthermore, a question for Carve specifically, why 25 instead of 21? Would dealerships not bite even though the common minimum age for rentals is 21?

I understand that accident rates among this demographic are incredibly high and that would complicate your liability. What I don't get is why seemingly nobody in the car rental business wants to service this market - couldn't you just offer beaters or end-of-life cars to high risk drivers? Nobody needs a brand new Nissan Murano to drive 70 miles upstate. You can do the same drive in a 25 year old Corolla. I suppose I am biased because I am <21 myself (20), but I also own my car outright so I wouldn't be in the target market for this.

[1] https://help.drivecarve.com/hc/en-us/articles/360031105291-H...

We'd love to serve customers younger than 25, and the only reason we don't is because insurance becomes prohibitively expensive. As a young company with very limited loss data, it was tough to get a carrier to underwrite a policy that doesn't have fairly strict driver eligibility requirements.

That being said, we're currently negotiating with a different carrier and will hopefully be able to rent to people 22 and up within the next 6 weeks.

Thank you for the quick response. I wish you the best of luck!

> I feel like there is a huge market for ages <21

> I understand that accident rates among this demographic are incredibly high and that would complicate your liability.

As you mention, the liability cost is simply very high for drivers under the age of 25 (prefrontal cortex is not yet fully developed), which is why most rental car companies do not service that age cohort.

I have only rented a car a few times recently, for skiing and hiking far from home, but I like the idea of a smoother experience and I love anything that creates less waste :)

https://www.drivecarve.com/search?startDate=2019-11-8_3-00pm...

^^ I know it's 2019 and this is expected but I really appreciate this URL structure for search results. I have spent a lot of time working on booking sites and it used to frustrate me to no end that some projects used a very un-friendly URL structure. This will help your marketing team so, so much over time.

I'll offer some critique of the booking process that you probably already know of: travel is highly dependent on trust signals and push mechanisms like Best Purchase Guarantees, People Looking at This Hotel, countdowns, etc. Some I find gross while others necessary. I think you could look at the booking experience and find plenty of room to grow there. Right now, the car experience feels barren and fake to me. I bet there are some things you will find very helpful, like MPG, etc. so it's just about testing those assumptions.

Best of luck!

Thanks for the feedback! I'll let Sam know you like the URL structure :)

100% agree with this. This is V1 so we're working on updating the homepage and individual car pages to make it look less barren and add a degree of social proof and trustworthiness.

I work for one of the major players in a similar space, and the best advice I can give you is to stay away from delivery because of the capital expenditures (lots of fundraising or massive credit lines) it would take to set up that network.

The "easy MVP" of delivery will be tempting - drive the vehicle to the customer, drop it off, the employee takes uber back but I would suggest staying away from that temptation.

I'd be interested in the deprecation curves you're modeling on the vehicles as I'm just trying to ballpark what that break-even point is for the dealer. The other issue for the dealer is that while they have excess inventory, they typically have excess inventory on vehicles that aren't moving quick enough so I don't think the target is luxury models but more functional users (e.g. your situation in NYC makes sense. You need a car to get away to a destination and the car itself doesn't matter much as long as it's clean and runs)

Looking forward to seeing how you guys grow.

That's exactly where we're at in the thought process on delivery. Much more efficient to bring the customer to the car, not vice versa, and not all that much worse a UX.

I'd still advise and openly admit as a random stranger on the internet you can disregard this, that the Uber code path is much better until you guys scale much much more.

You may also want to check out NextCar - these folks own a bunch of East Coast dealerships and decided to start renting around their dealerships: https://nextcarrental.com/

They work out of dealerships as well as airports which can provide an edge for some local rentals.

Interesting--I'll definitely give these guys a look. More and more dealers are getting in to the rental space on their own.

can you quantify national chains being “inconvenient”?

i find those sorts of statements to be a sort of “biz-smell”. it is easy to make dismissive claims about incumbents...and dangerous when those claims do not clearly map to value statements about your product/service. They are “inconvenient because of X, unlike us because of our feature/service/attribute Y”.

if someone has never rented a car from a national chain, or if they have never had an issue doing so (which is my experience) your assertion without context may fall flat.

the uber voucher is neat, but i’ve had avis bring a car out to my house and drive me home after returning it to the lot. all i had to do was chat with a human for 1-2min and explain my personal logistics. my experience is an outlier...but informs my analysis of the “inconvenient” claim.

Regardless, great work launching! I will be looking forward to you expanding geographic coverage so I can give you a spin :)

If you're a frequent car rental customer and are part of some of the bigger companies' loyalty programs (Avis Preferred, National Emerald, etc.) and typically rent from airport locations, than the rental experience can actually be really great.

But in a lot of use cases, specifically for people living in big cities that don't own cars, the experience is slow and expensive. To use me as an example, when I was living in New York I wanted to go skiing in Vermont and needed a car for the weekend. On the several occasions I used one of the big car rental companies, I'd pay in excess of $80/day for a midsize sedan, trek to a branch which was often far from where I lived, and wait in line to sign a bunch of paperwork at a desk. Another thing I found problematic was that I never new exactly which model I was going to get until I got there.

Peer-to-peer services solve certain aspects of these problems but were, in my experience, inconsistent--sometimes the car was nearby and great and other times it was far away, dirty, and the host was unresponsive.

We're trying to combine the scalability and variety you get with peer-to-peer services and the consistency you get with direct-to-consumer car rental.

> If you're a frequent car rental customer and are part of some of the bigger companies' loyalty programs (Avis Preferred, National Emerald, etc.) and typically rent from airport locations, than the rental experience can actually be really great.

I'm none of those things, and when I've rented the experience has been great.

> On the several occasions I used one of the big car rental companies, I'd pay in excess of $80/day for a midsize sedan, trek to a branch which was often far from where I lived, and wait in line to sign a bunch of paperwork at a desk

Every rental agency I've rented with has had pickup service of some sort (in the last few years, usually Uber/Lyft ordered by the rental office), and because they are smaller footprint and have business driven by accessibility, they tend to be more conveniently located for more people than dealerships.

I find the downtown experience at the traditional car rental companies terrible too. All they have done in recent years is update the style of their websites a bit. The paperwork and line ups is insane. Uber and Zipcar have none of that. They need to spin-off a portion of their business to subbrands the way cell carriers have done. Or to Carve.

thanks for the thorough response!

i’m not now, nor ever have i been a member of a national chain’s loyalty program. as i had noted, my experience is an outlier. i’ve never had the dreaded endless-line issue, could handle two signature and a half dozen initial boxes without it being an undue burden (at the time). i never rent from airport locations, only local franchisees. this alone may account for my experience; a small franchise location in an area with a major airport may be more inclined to strive for great customer experience where possible. obviously my experience doesn’t scale!!

best of luck. i’m sure you will see success and light a fire under national chains to up their game. win:win

This is likely a New York specific thing, where Hertz is incredibly expensive in the city proper unless you go to the airport.

i can see that...though imo cost doesn’t (always) map to convenience...

This would be great if it helped me rent the cars I’m interested in buying. I’m trying to evaluate an Audi Q5 vs an Acura MDX right now and an extremely annoying thing is that I can’t easily rent one from the dealership to take on a weekend trip and see how comfortable it is after a few hundred miles driving.

Hertz Rent2Buy might be an option. They present it as an extended test drive, where you get the fee waved if you buy the car, but they don't really care if you don't. The price when you don't buy isn't ultra cheap, but as I recall you don't get gouged on the nicer vehicles as much as with a regular rental, and they have a fairly diverse selection.

But fundamentally, it's nice if you're shopping for a car because you get to choose the make and model.

This is great! I use Zipcar/Turo/Avis quite a bit since I don’t own a car. Some notes:

* I would pay extra for unlimited mileage without worrying about overages. This is a major pain point for longer Zipcar trips to Tahoe or Oregon/Nevada

* The deductible is really high. Zipcar lets me pay extra for a $0 deductible.

* Mileage and deductible should be more visible, I had to go and read the actual terms. A small summary before booking might be good

* Mileage overage of $0.50/mile is pretty high considering I’m paying for gas

* UX nit, the calendar widget on the landing page requires me to scroll through a bunch of early morning AM times before getting to my time. The dropoff picker should default to the month of pickup as well.

I’m a big fan of your focus on minimizing hassle. The uber credit is clever! I’ll definitely try you guys for my next trip.

Awesome feedback. Regarding mileage--the terms on the website are slightly outdated and we don't have mileage limits--so none of that mileage overage nonsense. We're also in the process of lowering the standard deductible $500 and adding a zero deductible option for an extra $10/day.

No mileage limits seems crazy. Won't dealers be upset if a car comes back from a week-long rental with an extra 2,500 miles on it?

Awesome!

Interesting idea. I just suscribed to a manufacturer all-inclusive monthly plan which includes insurance, registration, the right to swap cars and unlimited miles. It is by no means cheap, but having month to month flexibility as well as no lump sum of cash down like a lease or purchase was a great option for me.

These prices seem insanely high though, maybe it's just I live in the south but... $65 a day for a Ford Explorer? I have a luxury German car and pay $34 a day, which again is not cheap.

I'll probably only end up doing my manufacture plan a couple of months, as honestly I don't drive that much. Spending $300-400 a month in Uber is actually eaiser and significantly less money.

I think the owning vs subscribing vs renting vs Ubering decision depends on how often you need a drive-it-yourself car in those situations where Uber or public transit doesn't make sense.

For me and my cofounder and friends living in cities, it's typically 2-7 days a month, in which case rentals makes sense. If you need car for longer than that, than other options can make a lot of sense, and though you'll pay more overall, you'll 100% save on a per-day basis.

Manufacturers are fundamentally in the business of pushing new cars. No amount of financial engineering can make it a frugal option to drive a new car.

I am not entirely sure if the program is run by the US manufacturing division or local dealers. The car I got had 10,000 miles on it and is a 2019 model so not brand new.

Is it volvo? Didnt know it has unlimited and allowed frequent swaps.

Volvo is Swedish. :-). It is BMW. See https://go.accessbybmw.com/justink9917

* Full disclosure, above is a referral link. Though I can provide a promo code to waive the activation fee.

Hey Amos and Sam,

This is a great idea, and I don't think you need to make it a much cheaper option in the long run for it to attract customers (understand the incentive in the short term to acquire customers).

I live in SF, but travel to MSP a lot, and there is a local dealer that rents their fleet out and I usually rent from them, because they're close to the airport, they have a decent selection and the cars are well maintained. I would consider testing other markets than SF/Oakland/LA, and focus on places where people from those markets travel to (i.e. the midwest).

Excited to see what you accomplish!

Both Sam and I are from Minnesota so we'd love to expand to MSP at some point :)

Our main focus right now is on people living in urban areas that don't own cars rather than on travel, which is a much more price-competitive market. That said, we're definitely not opposed to moving in that direction once we're a bit larger!

Hi Amos & Sam this looks like a really cool concept. If I'm not mistaken another challenge you guys may face is the fact that a lot of dealerships are already doing this across entire brands such as Hyundai, how do you plan to tackle that? Also are you guys using a vehicle API such as https://api.carsxe.com to vet cars and get detailed data analytics on the cars people are renting out?

Most downtowns (mine included) don't have car dealerships nearby. I have no idea where the closest one is. I suppose I could take a Uber to a dealer less downtown when I want to Carve.

All our cars are parked in valet lots downtown, so there's no need to go to the dealership + we'll give you $20 in Uber credit to get to and from the lot.

Looking briefly at their site, it looks like on some (all?) cars they offer an Uber voucher to get to/from the pickup lot.

Really nice checkout experience, I'm excited to try this out! I'm actually in the market right now for an SUV, maybe car shoppers are a potential market to reach out to (e.g. rent the car out cheaply for a week and let the salesperson give their pitch when you go to give back the keys). I am sure there are a lot of dealerships that would jump at that opportunity.

Thanks for giving us a try! Really looking forward to seeing what you think of the service.

Hi Amos & Sam - Congrats on the launch. I'm one of the co-founder of Smartcar.com. Have an email I can reach you at?

Hey! Shoot me an email at amos@drivecarve.com

fair.com did something similar and they call it subscriptions. They list dealer inventory and you can "subscribe" to a vehicle. They raised something like 1 billion from outside investors and just laid off 40% of staff. I do not think you are competing with Hertz. My nephew just rents a zip car when he needs a whip on the weekends. They are all over the city, he lives on the upper east side. Turo is not allowed in NYC. The main problem in the city is parking, accessibility and cost. Typically you only need a car on the weekends thats IF you can afford it. Everything in the city expensive. If you can target start ups in the city and the engineers that work there and bring them the cars to them when they need them it could be an idea worth testing. So many ways to slice the market on this.

Yes to bring the car too me! And pick it up too! This is a pain and a problem worth solving (in that people would pay for this). I rented a car last weekend to use on Saturday where I was leaving at 7am. I had to pick up the car Friday because the rental place is closed at 7am Saturday and spend 20 min finding a spot. Then had to spend another 15 min finding a spot on Saturday night, and they were of course closed by the time I got back at 9pm. Then Sunday returning the car I had to essentially park in the middle of the street blocking a lane of traffic along with about 10 other rental cars waiting for them to open at noon. At noon a rental employee comes out and starts yelling and essentially tells you to leave the car in the middle of the street and that you are good to go. I guess that was the good part.

Haven't tried Zip car. Too many NYC Zip car reviews of dirty cars left w/ empty pizza boxes etc and wouldn't want to be in such a small car in a highway in upstate NY.

$55 a day for a toyota corolla is absolutely insane. So expensive. I fly all over and I'm a hertz gold member, I get my rentals for easily $10-30 a day. Plus my name is always on the board when I arrive at Hertz, just get in, drive away and sign a simple contract. I love Hertz

Really cool idea - this solves a business model innovation problem for dealerships as well. I love the idea of being able to try for weekend BEFORE I buy or lease. Good luck with this - as a UX person I'd be happy to provide feedback on the app and service design.

Thanks! We'd absolutely love your feedback. Reach out to me directly at amos@drivecarve.com when you have a minute!

Your site doesn't seem to say anything about being limited to SF on the main page. I was a little confused at first having not read your last line about being SF only and was trying to figure out how I could check if you were in Denver for an upcoming trip.

On our landing page in the box where you enter your dates and times, it says "Rent a car in San Francisco," but we'll add a banner to the top of the page as well just to ensure people know we're only in SF for the time being!

Do you know anything about autoeurope.eu? I am renting there for years, sometimes months in a row, and nothing and no one can compare with prices + coverage. They somehow squeeze big players like Alamo and Hertz, providing exceptional prices for their rentals

I've heard of them but haven't done much research. Will definitely check them out!

I think you are on to something RE using dealership cars as high-end rentals.

I use DriveFlow, which is a Car as a Service. It is owned by a dealership chain.

It is $1100/mo. I love it.

https://www.driveflow.com/

>$1100/mo.

Holy crap, really? How much do you use it to justify that high of a cost? My car, and this number is going down monthly because I paid for it in one lump and it's getting older every month, only costs me $416/mo with maintenance and fuel. I suppose it saves on storage, but I already had a place to store said car, so that's not really an added cost?

Edited to reflect an accurate number after I realized I double entered insurance in fuellog for a year.

Yeah, so for $1100/mo I get:

- Insurance (1K deductible)

- Unlimited vehicle swaps

- 1200 miles/mo

- Each car comes freshly detailed and is usually under 3000 miles

- Unlimited (local) roadside assistance swaps - eg if I get a flat tire they will come swap me out into another car and I just drive away - this happened to my wife and it was amazing to just grab and go

- Allowed to put pets in the car (extra $100/mo)

As I have customers I drive around in-town frequently, I always need to have a nice, modern, clean car on short notice. The cars so far have been BMW m240i, Audi S3/S4, Audi Q5, Land Rover Discovery.

I feel it is worth the cost. My BMW lease before this was $700/mo. And then add in insurance, detailing, maintenance (tires). It is about the same honestly. I just have a lot more flexibility now.

Also it is a monthly operating expense, which makes the tax situation a lot easier (versus lease/purchase and then reflecting that on taxes).

Depreciation costs?

I didn't know that DriveFlow exists but it's exactly what I've been looking for in a service to replace car ownership:

-No manufacturer lock-in (different manufacturers excel at different things)

-No maintenance burden

-No long/medium term commitment to a single vehicle (maybe I want a minivan for a long summer roadtrip but not all summer or all year)

... but the cost is truly eye-watering.

I had my first kid last year so I got a more family-friendly car than the little coupe I'd been driving. I struggled to decide between a midsize sedan (cheaper, more fun to drive, easier to park, suitable for 95% of the family's driving tasks) or a larger SUV (generally worse, but suitable for 100% of the family's driving tasks).

This would have solved the dilemma for me ... except I think I could just own a decent midsize sedan AND a decent larger SUV for $900 or more per month.

As an FYI, car rental in Europe is a million times worse than my experiences in the US. I would be very motivated to try another way to do it. It is totally normal to have a 1-2 hour wait in the UK or France at most airports, for example.

This is unfortunately the case during peak season (i.e. Italy or Spain in August). On the other hand, during off-season periods, the queue is often in the realm of 15 mins.

The thing I've always found though is that off-season in EU is _way_ cheaper than US. Went to Italy last month, 1 week for a medium sized car was something like 100 euros. And it's not unusual to rent a car for ~6 euros per day.

Depends largely on how often you rent with a certain company. If you do it often enough to be a "preferred customer" priority counters open up. Also depends on the company. I never had anything longer than maybe half an hour, granted that was in Luxemburg, Germany, Netherlands, Ireland so...

Trick is to stick with one company, avoids the registration as a new customer.

> human-free pickup and drop

> arrive at the pickup location, show the attendant your reservation email

> drive back to lot and hand the keys to the attendant

Just pointing out this pitch inconsistency, love the idea and hope you guys spread to other cities soon!

Oof, that's glaring. Thanks for the catch!

As a used car dealer, I would love to participate in this.

UX tips: let user choose times later, initially show date options only. Also show am option to select the city, to make it clear where this service is available.

Let's definitely chat! Shoot me an email at amos@drivecarve.com

Re: the UX feedback--I'll let Sam know!

I don't have any comments about the product but the background image on your site is 5MB! Makes the page look like it's loading slowly even if below the fold everything is ready to go.

Thanks for feedback! I'll get Sam to work on making load times way quicker.

Doesn't this burden the dealership's service revenue? They have to pay to maintain this fleet of rentals, which is going to be resource pressure for their service departments.

Dealers do service their own cars, but we cover the costs. So if a car on the platform requires an oil change, the dealer performs it but we pay.

I see. How do you plan on turning Carve customers into leads for the dealership, to drive traditional car sales?

(disclaimer: I work in automotive, and very closely with dealers)

Definitely been thinking about this when it comes to getting new dealerships to sign on with us.

One thing is leaving information about the car and the dealership in the vehicle + providing dealer contact info in case the person wants to reach out to the dealer. Do you have any other ideas?

Well this is, as far as I can tell, an intractable problem with automotive because of the nature of the whole market, from OEMs to dealerships & dealership groups to consumers.

Dealerships live and breathe leads. People renting cars definitely do not want to be sales leads for dealerships. So I think this may be a pothole along your way to the success I hope you achieve. :)

When I want to buy a car, I want to drive the car, or a car like, the one I'm interested in for an extended length of time before committing. A regular test drive is way too short and although sometimes they let you take it by yourself for longer, I feel like I'm imposing if I am not likely to buy it.

Great idea. Again utilizing the excess capacity. Couple of questions: 1. How are you financing uber vouchers ? 2. Are they allowing cars to be rented beyond certain mileage limit ?

1. We have a business account with Uber and just pay them based on the number of vouchers that are used.

2. We don't put mileage limits on our cars, so dealers don't really have a way of limiting mileage once the vehicles are on the platform.

In most states dealership cars typically have dealer plates which only allow them to be driven during test drives or by dealership employees. How do you handle that?

We require that dealers tag and title the cars before giving them to us (usually $200 which we reimburse).

Doing this would add an extra “owner” to carfax history, lowering the value of the car. As a dealer this would be a huge deterrent to me.

It's probably used cars.

Where in SF do you serve? Literally just the city?

Are there mileage limits, since these cars are presumably sold as new/ish?

Right now all our lots are located in SF proper, and we provide $10 of Uber credit each way to get there and back. We're working on ramping up operations in Oakland right now though.

There aren't any mileage limits.

Trying to book a car from mid dec-Jan, but it does not allow choosing a date in 2020. Is that intentional?

Not intentional! Working to fix now.

Does this include delivery? That's the missing link I always notice with non-airport car rental.

We don't currently offer delivery, but all our lots are downtown and we pay for your Uber to and from the lot.

Delivery, especially at our size, turns out to be pretty expensive to do, so we think it makes more sense in most cases to deliver the customer to the car, not the other way around.

how does insurance work for the rental period? prices seem similar to hertz and enterprise, why would i chose it above those?

Liability insurance and physical damage are covered, but there is a $2000 deductible.

As to why you'd choose us over Hertz, Enterprise, etc., the prices you're seeing on our website include things like taxes and fees, so by and large they're substantially lower than the big rental car companies for comparable cars.

Convenience is also a big thing we've focused on. Our lots are all downtown, as opposed to rental car company branches, who have a few lots downtown with limited inventory but tend to do most of their business at airports. We also pay $20 towards the Ubers to get you there and back again. Finally, since our lots are valeted 24/7, all you have to do is show an attendant your reservation email and the car is brought to you, which makes for super smooth pickup and drop-off process.

$2000, yikes! Will one's credit card insurance benefit apply here like with a more classic rental to cover some of that?

If the credit card used to book the car offers what's called a "Car Rental Collision Damage Waiver" then they'd cover the deductible for you.

We're currently renegotiating our insurance product, so hopefully we'll be able to bring the deductible down to $500. We're also most likely going to offer an add-on option to reduce the deductible to $0.

Do you have plans to cover South Bay?

I feel like Turo will not like this?

Do you presently own cars?

No, all cars are dealer-owned.

Sounds like Skurt re-born.

I think Skurt worked with rental car companies to deliver vehicles to customers whereas our cars come from dealerships and we don't deliver.

Genius Idea! Not so catchy name "Carve" - got to be more "Uber"

I kinda like it, it's got the word "Car" in it. "I drove a Carve to get here" sounds more natural than "I took an Uber"

Believe it or not, my co-founder and I actually ended up flipping a coin to decide on the name! I wanted DrivesUs (mostly because the domain was available) but now I feel like Carve sounds a little more sleek and pithy.

DrivesUs would be a problem for me, because I'd keep forgetting whether it was DriveUs or DrivesUs

I suggest "I carved there"