Interview with RelayRides CEO Andre HaddadConventional wisdom says leaving your car in your garage or office parking lot all day saves fuel, lessens pollution and helps the environment. Andre Haddad, disagrees. The CEO of RelayRides, a peer-to-peer car sharing service that lets you become a one-person mini Hertz, says by leaving your car sitting idle all those hours—instead of renting it out to people who need it—you are actually hurting the environment. How can that be possible? I sat down with Haddad to find out (my questions are in bold).
What was the initial inspiration for RelayRides? Did you set out to make a "green" company, or was there another motivation?
Creating a sustainable company was a factor, but initially it wasn't the main factor.
Right now there are over 1 billion cars world-wide, with 250 million in the US alone. And we are adding 20-25 million new cars to the planet's roads each year. A growing number of them are idle most of the time—up to 90% of the time, according to a recent study by researchers at Carnegie Mellon. And unlike homes or other assets, they are depreciating and losing value very quickly, even if you don't use them.
So the predominant factor for us was to take that very inefficient way of providing mobility for people and make it more efficient. But when the team was developing this idea and found the solution to the problem, they also found that the solution had significant environmental benefits. From then on, the ethos of the team was to have a passion for the positive impact on the environment we were capable of having.
RelayRides CEO Andre Haddad and his Chevy Volt which you can rent for $12 per hour.
Let's talk about those benefits and the positive impact. You state on your website that for every privately owned car that's rented out, 14 cars come off the road. How does that work?
There has been a lot of research done in the last few years on car sharing in general, not just on RelayRides, and the findings are pretty compelling.
The research shows when you use a shared car, there's a combined impact of two important factors: first, it lowers the number of new cars that need to be manufactured, and secondly, shared car users tend to be a lot more conservative with their driving when they are paying by the hour or day for its use. They tend to drive less frequently and organize their time better, and to walk or ride a bike more frequently. That combined impact, according to the studies, is equivalent to taking 14 cars off the road.
And RelayRides actually amplifies this impact. By using already available resources, you don't have to manufacture another car to make it a shared vehicle, unlike traditional car sharing services that continue to buy new cars in order to provide a fleet for their customers. In our case it's an owner's car, it's already been manufactured, it's already available, so we promote sustainability even further because there's no need to use resources to keep manufacturing additional vehicles.
There's also no need to maintain parking lots, offices, agencies and all the cleaning and maintenance that goes into managing fleets in a traditional rental business. And unlike them we are completely paperless, it all happens online. You sign up online, search for available cars, and book the car you want online. There are no rental agreements to print, everything is electronic.
There are those who would argue that having a car driven by multiple people, when it would normally be sitting idle 20 hours a day, would create more pollution and greater fuel use. Wouldn't that lessen the positive impact?
When you take into consideration that a person essentially has three choices when they need the use of a car—they can rent a car either from a newer fleet service like ZipCar or a traditional agency, they can purchase and use their own car, or they can rent an existing vehicle from someone privately—if you compare those three options, clearly renting from an existing car option is still the most environmentally friendly.
You will still have emissions, but in traditional rentals you have to add in the impact of manufacturing all those cars and the infrastructure necessary to maintain the fleets. When you compare it to buying your own car, again you have the impact of the manufacturing and people tend to use the car more. Remember, as I said earlier, people tend to drive less frequently when they pay for mobility only when they need it, versus when they own it. People tend to be more thoughtful and use public transportation, ride their bikes and walk more often, accessing the mobility of a car only when absolutely necessary. All of this makes renting from an existing owner the most sustainable option.
You mention public transportation. Does the availability of services like RelayRides discourage people from using public transit?
Not at all. We view them as complimentary. We encourage people to use public transportation and walk and bike ride as often as possible—but sometimes you just need a car. For example, if you have to go to Ikea to pick up new furniture, you're going to need a car. Public transportation just isn't a good option for that. We are there for those instances when you are taking a long weekend out of town, or you need to run multiple errands where using public transportation just isn't feasible.
Traditional rental companies tend to have very limited inventory on electric and hybrid vehicles. Do you have these vehicles available for eco-conscious drivers?
Yes, and that's one of the cool things about renting from private owners. For a lot of people, electric vehicles still seem like a technology that's unsure and unproven. They have range anxiety, or think an EV or hybrid doesn't have the power that they are looking for. We are able to provide people the opportunity to rent these vehicles and experience them for themselves.
So for example, if someone is in the market for a Leaf or a Prius, your typical car rental doesn't have EVs, or if they do they're usually really expensive to rent. Whereas in our marketplace, people can try one of those vehicles, affordably, for an extended period of time. So we are able to provide exposure to those people who are maybe on the fence about committing to the technology.
If you live in the San Francisco area, you can rent my Volt for $12 per hour. And I've had many people tell me they were considering an electric vehicle, and to this point they were a little worried about whether it would be a good fit for their needs, they were concerned about the economy of the battery, and wanted to understand how it drives. So they rented my Volt with that in mind. And many of them told me after that after experiencing the car they were much more comfortable about switching to an EV. And that is the fun part of what we do, promoting new energy saving technologies in the marketplace.
RelayRides is a peer-to-peer car sharing service available in over 1,200 cities in 49 states.