If you needed a pint of milk, you’d probably borrow one from your neighbour, so why not do the same when you need to use a car?
That’s the simple premise behind Graeme Risby’s sharing economy start-up HiyaCar. Car owners can turn a liability into an asset by hiring out their wheels when they aren’t using them to local people who need a car to go shopping or on a longer journey.
The hirer gets a cheap (typically around £60-£80 a day) and handily-located vehicle whilst for the owner ‘It’s passive income. When you are not using the thing you can get some income from it’ he says.
HiyaCar takes between 20% - 30% in commission with the rest going to the car owner. And everyone gets the warm feeling of having helped out a neighbour in need, says Risby. ‘What we’re doing is all about giving people better lives. We pay some of our customers hundreds of pounds a month, and that money stays in their local community. It doesn’t go to Enterprise or whoever.’
Despite doing no formal marketing as yet, in its first year of trading the business has attracted 20,000 members – 9,000 of them in London – and has a fleet of 1,000 cars on its books. ‘By the end of the year we want to have 5,500 cars in London.’
To that end he has just hired a chief marketing officer (ex-Photobox, whose founders Mark Chapman and Graham Hobson are also investors) and is about to start spending ‘hundreds of thousands’ on marketing over the next six months.
This lightweight digital disruptor has traditional hire operators like Hertz and Enterprise in its sights, as well as car clubs like ZipCar (now owned by Avis).
‘It’s the AirBnB for cars’ says Risby, whose major concern at present is to improve the user experience and make it as simple and pain-free as possible for both owners and hirers to sign up.
‘We’re on the cusp of something big’ he says, explaining how two tech developments – keyless go (enabling hirers to open and start cars via smartphone) and a just-about-to-be-launched new mobile app will make a big difference.
‘The user experience for peer-to-peer has generally been awful’ he says. ‘Our old platform is better than most but that is saying something because it is pretty bad. But now we’ve got the app and keyless tech, it’s going to much easier and more seamless.’
Going keyless will cost car owners £99 and entails a Hiyacar fitter popping round to install a black box under the dashboard - in about 30 mins typically. Once installed, the car can be securely opened and started by smartphone app, removing the need for the car's key to be handed over and making hiring much easier for owner and customer. It's a virtuous circle which Risby and his team hope will open up a whole new market for shorter, more frequent hires.
A former business analyst at City accountancy firm Smith Williamson, Risby and his co-founder and COO Rob Larmour launched HiyaCar in 2016 after spending two years preparing the service for market.
Working on the tech platform, and details of the processes for vetting hirers and owners was tricky enough, he says, but the real challenge was getting an insurance company on board. ‘Getting the insurance in place was the hardest thing. A few years ago you couldn’t have done it.’
Thanks to his insurance exec wife, Jodi, who persuaded the chairman of Aon to give it a go, they got the multinational broker on side. ‘But even with them on board we only got to two insurance companies. The brokers aren’t the problem, it’s the underwriters.’
But it was worth the effort he says – the system they have ended up with, provided by Axa, provides every user with a bespoke quotation every time they hire a car, and costs a modest average of £9 a day, rising to a maximum of £24 for the fastest and most expensive cars.
What’s more, sharers turn out to be a pretty good risk. ‘We made a lot of assumptions about this business and not all of them have been right, but one that has was that the people who use this service will look after their cars. We had 400 hires in the first year and only 3 insurance claims – a flat battery, a stonechip and some minor damage that wasn’t the drivers fault.’
The refreshingly down-to-earth Risby lives in Maidstone and is not your typical hipster tech entrepreneur, but he is committed to his business and has a knack for attracting good people. As well as the aforementioned ex-Photobox marketing guru, his CTO used to work at WhipCar (a now-defunct early car sharing platform) and he has even tempted employees away from big names like Facebook.
It’s largely down to his enthusiasm and willingness to muck in. ‘We have unlimited holiday and some other good perks, but we all do shifts on Live chat. I jumped to answer a customer’s question at 11pm the other night – you can see who I am on my profile and the guy was like "Wow, you guys do this do you?" Yes we all do, it’s a vital part of the business.’
It must also help that he’s clearly in it for the long haul and wants to make sure that they get things right. ‘We could have gone live in February, but the system wasn’t great. We’ll get it right first and then we’ll scale.
‘We’re like Google – we weren’t the first car sharers, but we will be the last. Transport is such a great opportunity, I love cars, and they way that tech gives you freedom. Whatever we do after this is not going to be as exciting so we still want to be doing it in 20yrs time.’