We're Amos and Sam, co-founders of Carve. (https://www.drivecarve.com)
Carve is a car sharing marketplace where you can rent cars from local dealerships. So if you don’t own a car but need one for a few days, you can get a car that fits your needs at a reasonable price.
We built this product because when we moved to New York after college, we both gave up cars, and even though most places we needed to be were easily accessible via Subway or Lyft, there were still lots of things we wanted to do that we couldn't using public transit or ride share apps. When it came to leaving the city to ski in Vermont or hike upstate, for example, the existing options were all either expensive (Zipcar, Car2Go), inconvenient (Avis, Hertz), or inconsistent (Turo, Getaround).
Sam and I are both from the Midwest, so neither of us are strangers to car dealerships—drive ten miles in any direction from our childhood homes and you'll see massive lots filled with cars waiting to be sold. We started speaking with these businesses and realized that keeping all those cars sitting around is really, really expensive. Compounding this problem is the fact that new cars sales are falling and dealership inventory levels are historically high.
In response to the issues that dealerships face and the slate of bad rental options, we built a platform on which dealers can list their cars to be rented. It's good for dealers because they can offset financing costs and depreciation of idle inventory without much effort. For renters, it means a short-term rental option that’s on average 30% cheaper any other comparable option, offers a wider selection of cars, and allows for human-free pickup and drop off.
It works as follows. First, browse our site for a car. Once you make a reservation, we'll email you an Uber voucher for $20 off your trip to and from the vehicle pickup location (a 24-hour valet lot in the city). When you arrive at the pickup location, show the attendant your reservation email and they'll fetch you your car. Once you’re done with the car, drive back to lot and hand the keys to the attendant. Use the Uber voucher to call a car to bring you back home.
At the moment, we're only operating in San Francisco, but we'll be expanding soon to Oakland and LA. If you're in SF, try us out and use the promo code HN10 to get 10% off of any rental!
We’d love to get some feedback and are happy to answer questions!
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.
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.
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?
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.
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.
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.
You also have a very diverse lineup on a used car lot, so the odds that you have something legitimately comparable is very low.
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.
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.
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.
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.
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?
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.
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.
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).
“New” cars? Wouldn’t the act of renting them out transform them into used cars and illegal to sell as new?
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.
Loyalty/membership program is something we've been thinking about and will likely implement sometime over the next few months.
Great bug catch!
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.
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...
True though that reservations become more profitable for us the longer they are.
> 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.
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.
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.