As more rideshare services launch, the market for strategic partnerships becomes increasingly competitive.
And the biggest challenge to success in the carshare, rideshare, or on-demand rental market is having fleet financing and insurance partnerships in place, Julian Espiritu, managing director of consultancy firm Abrams Carsharing Advisors, told Auto Finance News.
For entrepreneurs, qualifying for fleet financing and insurance is difficult because startups need to have adequate financial backing, he said.
“We’ve gotten calls from nonprofits to operations and businesses that are seeking help with obtaining insurance and financing, and nine times out of 10, we find that there is a funding issue or investment issue,” Espiritu said. The qualifications for acquiring available insurance or financing are dependent on the amount of capital available to the business.
There are several carshare and rideshare companies seeking financial partnerships, Espiritu said. “They are looking for a business or financial model to support their venture; they are looking for our expertise to help [find] fleet financing, which is very important to this type of model.”
These two startups, in particular, are seeking financial arrangements:
Zemcar, a safety-first rideshare service, is “in discussions” with major automakers to create flexible leasing options for drivers, similar to Uber’s deal with Toyota Financial Services, Zemcar’s Founder and Chief Executive Bilal Khan told Auto Finance News.
Long term, Zemcar plans to offer a program that would allow car purchasers to cover their lease payments through earnings generated as Zemcar drivers. The leasing program is expected to be formed by yearend.
The startup bills itself as a door-to-door rideshare, meaning that a person can reserve a car ahead of time, drivers will escort passengers to and from the front door, and carry their belongings.
See Jane Go, a Laguna Hills, Calif.-based women-only rideshare startup, is in conversations with “several OEMs” to launch its 30 Rides program. Drivers would purchase a new car, then receive up to $300 in car payments coverage if they complete 30 rides a month, said company founder William Jordan.
“This is high on our list, and we have had a few initial conversations already,” he said. “It will definitely happen after we complete our beta launch, mid this year.”
Launched in the summer of 2016, the startup currently operates in Orange County and Long Beach, with more expansion in Southern California planned for this year.
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