Start-Ups

How two 17 year-olds disrupted the transportation industry, got sued, got funded

FlightCar lets users park their cars for free at the airport and rent them out while they are away. Airports are fighting it, but FlightCar is moving forward.

 

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Image: FlightCar

Parking at the airport in most major cities is usually like the parking in those same cities, hard to find and expensive as hell. Plus, your car sits there, untouched, waiting for your return.

Car sharing startup FlightCar offers users a way to safely monetize their parked cars by renting them out to travelers while you are away. All rentals are insured up to $1 million and all renters are pre-screen to make sure no wannabe Fast and Furious driver abuses your ride.

If you put your car up for rent, you get free parking at the FlightCar location. After the team checks you in on an iPad, they drive you to the airport and drop you off. While you are away, if you car is rented, you can make up 20 cents per mile. FlightCar CEO Rujul Zaparde explains what happens when you return.

"Upon return, the owner can call 1-866-FLIGHTCAR for a pickup or use our web-app. We'll send a town car to pick them up from the curb. When they get to our parking lot, their car will be washed, vacuumed, and they will receive a check in the mail if their car has been rented. The parking, car wash, and vacuum are guaranteed regardless of whether the car is rented," Zaparde said.

If you don't want to wait for a driver, you can take a cab back to the FlightCar lot and they will reimburse you for your cab fare. FlightCar hasn't seen any major accidents so far, but if a car is involved in an accident the company will contact their insurance provider and, if the owner approves, try to have the car fixed by the time they return from your trip. If they are not able to get it repaired by the customer returns, they have loaner cars they can provide.

The company has raised over $6 million and has over 13,000 customers.

The power of youth

Zaparde got the idea for FlightCar after reading an article about home sharing site airbnb. He figured that if people were willing to share their homes, they might be willing to share their cars. After running it by now-co-founder Kevin Petrovic, FlightCar was born.

The funny thing is, the co-founders weren't even old enough to rent a car when they started this company. Zaparde was only 17 years old when they began. They went through the Brandery accelerator in Cincinnati and Y Combinator before seeking a formal seed round. Their current investors include: The Brandery, Y Combinator, General Catalyst, SoftBank Capital, Ryan Seacrest, Ashton Kutcher, SV Angel, Erik Blachford, and others.

Joe Medved, a partner at SoftBank Capital, met the team when they were coming out of the Brandery. He said that their youth and fearlessness plays to their advantage.

"To build a wildly disruptive business, in many ways you have to be somewhat naive about the impediments you are likely to face," Medved said.

That's not to say that Zaparde and Petrovic have no experience building a company. While in high school, they started the Drinking Water for India charity and got around 35 schools across 14 states involved to build clean water wells in India. To date they have built over 55 wells and provided clean water for over 100,000 villagers. Zaparde got accepted to Harvard, but put that on hold to start FlightCar.

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FlightCar founders Kevin Petrovic and Rujul Zaparde in India.
Image: Drinking Water for India

Experiencing turbulence

So far, the company has facilitated about six thousand rentals in Boston, Los Angeles, and San Francisco. Dan Denegre, a film producer, has been using FlightCar for a year to rent out his 2011 Hyundai Accent. He travels once or twice a month and has used FlightCar about 10 times. His car was rented half of those times and he has made about $100. According to Denegre, the value is the convenience and the customer service.

"Where there are cars to be rented, there should be FlightCar," Denegre said.

They have momentum, but they have run into roadblocks related to their unconventional approach. They are seeing serious tension building with the city of San Francisco, who refuses to see a difference between peer-to-peer car sharing and car rentals. The city is actually suing FlightCar over lost fees, taxes, and some of their practices. Because of this, SFO wants FlightCar respond, financially, like Hertz or Avis would. But, Zaparde said, they are already paying SFO.

"We're making travel more affordable for locals, and that isn't something the airport seems willing to recognize," he said. "We already pay SFO 15%-17% of our revenue. We work with a number of local livery (limo) companies to pickup/dropoff anywhere within a 10-minute radius from our location, including the airport. All the livery services we work with are licensed by the Public Utilities Commission of California, as well as by SFO itself to pickup/dropoff curbside at the airport."

Every time a limo enters SFO, they are charged about $4 and FlightCar covers that fee. After covering all of the fees from the coming and going associated with getting car owners and renters to and from the lot, it ends up being between 15 and 17 percent of their revenue per rental.

Despite the issues they have run into at SFO, FlightCar is pushing forward undeterred. They are planning to expand aggressively this year, but they want to start by focusing on building out their current markets.

What do you think?

We want to hear from you. What do you think about peer-to-peer car sharing and home sharing? Is it something you would be interested in trying, or is it not for you?

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About

Conner Forrest is Enterprise Editor for TechRepublic. He covers startups and enterprise technology and is passionate about the convergence of tech and culture.

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