Let the fight to the car sharing death begin: FlightCar moves into Hubber's territory

By Carmel DeAmicis , written on November 13, 2013

From The News Desk

Today FlightCar announced the opening of its third location after SFO and Boston: LAX. The park 'n ride company helps people rent out their cars at the airport before going on a trip.

Drivers drop off their vehicle with the startup's parking lot near the airport, FlightCar gives them a black car ride to their terminal, and the renter gets free parking the time they're gone and money if someone rents out their car during that time. It's like Airbnb meets Lyft meets airplanes. (Side note: if Lyft ever gets into the airport ridesharing market it should totally call the feature "Lyft Off." Get it?)

Although FlightCar is the country's first airport ridesharing company, it's not the first such company in Southern California. Hubber beat it to the punch, launching a park'n ride in June for LAX.

RelayRides, the third airport rideshare company out there, has not yet made it to LAX, but it has services in San Francisco.

With FlightCar's expansion into Hubber territory, it's time to ask the question: is there room for all these airport ridesharing companies? The sharing economy may be booming, but I think we're starting to enter dreaded vertical specialization land. I'm not even sure there's enough room in every city for both Uber X, Lyft, and SideCar, let alone enough room at every airport for FlightCar, RelayRides, and Hubber.

Granted, the rental market at airports is $11 billion dollars according to the Federal Trade Commission chairman. And in 2008 -- the most recent number I could find -- the long-term parking market generated $3 billion in revenue for airports. Hypothetically, a lot of disruption could happen with car sharing, if travelers are convinced to come on board both as renters and suppliers.

There's a crazy story behind FlightCar's co-founders. Just like John and Patrick Collison from Stripe, these guys have a touch of child prodigy to them. Rujul Zaparde had gotten into Harvard -- early decision, no less -- when he and his co-founder Kevin Petrovic came up with the idea for FlightCar. They had heard about Airbnb, and the inspiration struck. Bear in mind, this was before Lyft or Uber X were around. Talk about foresight, from 17-year-olds no less.

In what could be the plot to "Dougie Howser: Startup Edition," Zaparde and Petrovic started tooling around, puzzling together the pieces for their idea. By May, they had gotten into The Brandery, an accelerator in their home town of Cincinnati. By July they had decided to defer college and go after their collective dream.

They headed west and spent a depressing five months sharing a bathroom with five other people in, fittingly, an Airbnb home and traversing town trying to get people to fund them. They needed $200,000 to give to a car insurance company before they could even soft launch FlightCar. "People were saying, 'If you're going to build an app, and you know how to code, I'll give you money. But you don't, so I won't,'" Zaparde remembers.

Finally, as they were approaching their breaking point, the 18-year-old duo got accepted to Y-Combinator. That's when their plans really started to take off. They became the first company to the airport ridesharing market, got loads of press, and started gaining traction. Now, eight months later, they've got $6.09 million in funding from the likes of SoftBank Capital and Brian Chesky among others, and a location in Boston and SF. Today marks the launch of their LA office.

"It's very exciting," Zaparde says.

It's a fairytale entrepreneurial story, from obscurity and a dream, to desperation and a shared bathroom at an Airbnb rental, to YC acceptance and world class investors. But credentialed backing and LA expansion aside, FlightCar will still be fighting to the death against its competitors.

Leaving behind your car for a stranger to rent is not a naturally comfortable choice for most people. In some ways, that's scarier than renting your apartment to someone on Airbnb. Cars have to be driven places. Collisions occur. Terrible drivers abound. I should know -- when I was in high school my friends called my car the Terminator. I am the driver no one would ever want renting their car.

FlightCar, RelayRides, and Hubber have their work cut out for them educating the population about car sharing, and convincing them they can trust the 100 percent insurance guarantee.

In that way, FlightCar has the upper hand to Hubber in LA. With the runway of $6 million in venture, FlightCar can offer customers' expensive amenities, like a free ride in a black car to the airport, rentals for a mere $18-$20 a day, and free long-term parking regardless of whether someone rents your car. As a bootstrapping company, Hubber can't possibly compete on those terms.

But then the question arises: who is building a more sustainable company? Hubber is already making a profit, and growing at a slow, steady, small-business pace. Without investors to answer to, it can take its time getting operations right before moving into other markets. Hubber's founder Paul Davis may choose not to expand to other markets at all, and keep his company local. Davis comes from a non-entrepreneurial background -- he was previously a Hollywood production manager before starting Hubber -- so staying local wouldn't be an unreasonable move for him.

For FlightCar, big quick growth is the only way for it to stay ahead of its expenses. With such lavish perks for customers -- and legal fees fighting SFO -- it can't turn much of a profit if it stays small. It's undoubtedly using its venture runway to try to attract people to the marketplace. We won't know till the dust settles and the funding runs out whether FlightCar has built a sustainable business with its approach.

[Image via Thinkstock]