I had the chance to interview Ahmed Mhiri, the founder and CEO of TravelCar, over email recently. TravelCar is a peer to peer auto rental business focused on airport rentals. Locals can earn some money parking their car at the airport while they travel. And visitors can rent from TravelCar at prices that are often cheaper than commercial rentals.
TravelCar recently expanded into the United States and they are growing fast. This expansion is possible because TravelCar has been quite successful in raising funds, so far netting $22.2M in 3 rounds. Ahmed and I talked about the big picture of where TravelCar started and where it’s going, and also some nitty gritty concerns car owners and car renters might have.
TravelCar big picture
Share Traveler: What inspired you to found TravelCar?
Ahmed: I traveled a lot and I had always two pains. The first at the departure: expensive parking fees, sometimes more expensive than the flight ticket itself. The second pain at the arrival: expensive rental prices at the airport and bad surprises. On top of that, all these cars sitting idle in a long term parking lot seemed completely inefficient.
ST: I understand TravelCar was founded in France in 2012. And now in 2017 you have an impressive list of countries on the TravelCar website. This includes South Africa, New Zealand, Romania, Peru, Mexico, and Turkey. I count 26 countries in total. How did you expand to so many places so quickly?
Ahmed: It’s actually 40! The formula is simple, yet often hard to achieve. It’s a great team plus a great product and solution. Add in great partners and investors and you get a winning combination.
ST: Were you surprised to see FlightCar shut down in the U.S.? Does that worry you in terms of the viability of this service in the U.S. market?
Ahmed: Yes, we were surprised when we first heard the news. We were actually one of the companies interested in acquiring it. After analyzing what happened to them, we understood that their pitfalls were internal and became even more convinced of the viability of the service in the US. It confirmed that TravelCar had a great opportunity in the U.S market.
ST: Where do you hope to be with TravelCar in 5 years?
Ahmed: We hope to have developed a global footprint to serve travelers worldwide!
ST: Do you have local staff running operations in each country?
Ahmed: Not necessarily. The U.S. is a special market given its size and potential for our business. We currently have a team managing our U.S. operations out of Los Angeles and San Francisco. For most other countries, we rely upon local partners that use our technology to conduct the TravelCar business.
ST: What types of local partners do you work with? To the end user is it still TravelCar branding?
Ahmed: TravelCar may have local partners run operations and store your car in between rentals, but you will always be served by the same processes and with the same quality levels. All of our partners use our technology to serve carsharing customers, including our photo technology to control the state of the vehicles. All customers are served on the phone by TravelCar agents.
ST: I noticed that in Paris you have some non-airport locations. Do you have a plan to expand beyond the traveler market and into peer-to-peer car rentals in other places?
Ahmed: Our goal is to help travelers get around easier and at a lower cost, whether it be from the airport, train station, sea port or city centre. We are continuously looking for different locations to expand our services.
Questions from TravelCar users
ST: Can you tell me how insurance works when people are renting cars through TravelCar? Can everyone feel secure renting through your company?
Ahmed: For the car owner, we provide up to $1 million in primary liability insurance through our local insurance partner to cover claims by third parties arising out of the use of their vehicle. Additionally, our insurance also protects owners against theft and damage up to $50,000. That’s the maximum value of a car we accept for our car sharing program. For the car renter, we require that they have insurance, either through their own policy or by purchasing one of our three packages.
ST: To clarify here, people renting through TravelCar can choose to pay for one of three insurance packages that provide liability insurance as well as varying levels of deductibles for collision insurance. Renters can elect to choose none of these if they believe their own auto insurance coverage is sufficient. Car owners are automatically protected with both liability and damage insurance regardless of what package the renter selects.
ST: Every time I think about using TravelCar I go through some calculations in my head to figure out if I will save money over my alternatives (airport parking, or just taking a taxi to the airport). I wrote a post about my calculations using FlightCar. I recently updated those calculations for TravelCar. If I assume the cost of use of my car is now 25 cents/mile (a low but reasonable estimate based on age of the car, model, etc), I only come out ahead if my car sits unused in your lot for a chunk of the time. If it’s rented out the whole time it is parked there, I think I lose money.
Here’s my math: For a 30 day stay I’m guaranteed to save the cost of parking ($9/day in the TravelCar lot), and I earn a flat rate of $150. For my car this would be $420 saved/earned. I estimate that my car’s cost per mile is 25 cents. TravelCar’s rental pricing includes 150 miles per day, and charges more for overages. I think most people won’t go over that limit. This means theoretically TravelCar could rent my car out for 30 days at 150 miles per day incurring 4500 miles. That’s $1125 in wear and tear! In reality I think 30 days of renters all going the maximum miles is super unlikely. But the difference between $420 and $1125 if pretty big. I’d need my car idle at least half the time it’s with TravelCar, or I’d need drivers to only use less than 56 miles per day to just break even.
Can you help convince me that my math is wrong and it’s a good deal financially to do the free parking with TravelCar?
Ahmed: Your usage estimations are overstated. A car is typically rented out only half of the shared days. When it rents, it will typically drive about 80 miles. Hence, you should expect only 40 miles for each shared day.