
FlightCar (YC W13) Raises $5.5M Round to Expand and Hire - shrig94
http://techcrunch.com/2013/04/15/flightcar-5-5m-funding/
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pg
These guys are Airbnb-like in another way too: as with Airbnb, I initially
thought this was a bad idea. What changed my mind was when I emailed all the
YC alumni to recruit users for the closed beta, and large numbers of them
immediately and enthusiastically signed up.

There is clearly something to the "sharing economy" that everyone is talking
about. There will be glitches along the way, but I'm pretty sure this idea is
here to stay. Considering the value of the assets involved, it could be the
big economic story of this decade.

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physcab
There is a clear value add for people coming into a city who don't want to
rent a normal rental car. But I'm not sure the same value add is there for
people renting out their car, unlike Airbnb. If the maximum you can obtain for
renting out your car is < $100, is that really what your emotional peace of
mind (your car being ticketed, trashed, and scratched, loss in blue book
value) is worth?

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aashaykumar92
The emotional peace of mind is the exact thing that FlightCar and Airbnb are
creating by encouraging this aspect of sharing. Yeah shit can go wrong with
your car--that's with anything sharing-based though. As the saying goes, "Shit
happens". But at the end of the day, sharing is a good thing and people are
opening up to the aspect of it more and more. Essentially, the idea that you
are sharing with others is the peace of mind. Hasn't warmed up with everyone,
but it has with some and will continue.

As someone else pointed out, I'm sure FlightCar will change their pricing as
it gains more traction. For now, the pricing is just a reasonable and simple
model.

If there's one thing I disagree with from PG's comment, it's his prediction
that this could be the economic story of the decade...no, it has the potential
to be the economic story of the century. Not FlightCar by itself, but all
these companies disrupting different industries through the simple idea of
sharing--it's revolutionary and still young.

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pg
You're right, but I always try to underestimate things.

It would be pretty big if ownership turned out to be largely a hack people
resorted to before they had the infrastructure to manage sharing properly.

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rayiner
It's not so much that ownership is a hack, or that sharing will replace
ownership, but that as technology improves the transaction costs for trading
property rights decreases, allowing "ownership" to be treated in a more fine-
grained way than previously possible.

You can see a fairly pure instance of this situation in spectrum management
(which is a common area used to study property rights because it's easy to
deal with theoretically). In 1960, Ronald Coase said we should break off big
chunks of spectrum and sell it off for exclusive use, just like we do with
land. Transactions in those rights will help achieve efficient allocations of
resources, but there is a limit at which transaction costs dominate and
optimal allocations aren't reached. If you think of something very coarse-
grained like frequencies for broadcast radio, you're likely to get efficient
allocations via trading of property rights. If you think of something very
fine-grained like allocation of frequencies to a cell phone as it travels
through a busy intersection, the idea of doing micro-transactions to yield an
optimal allocation becomes intractable in the face of transaction costs. But
as you make the transactions cheaper, through technology, it becomes more
practical to do micro-transactions.

This basic phenomenon is generalizable to pretty much any situation where you
have property rights that are coarse-grained out of accounting convenience. If
you can make it cheap and easy to break off little chunks of the property
right and trade in them, you'll achieve a more optimal allocation of rights.
That's pretty much exactly what AirBnB and FlightCar are: not sharing, but
ways of breaking off a piece of a coarse property right and trading in those
little pieces in a fine-grained way.

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nlh
I'm still hesitant to buy in to the idea because I'm just a fundamentally
skeptical person when it comes to letting other people use very personal
things like cars as opposed to apartments. Cars have a "feel" to them that
many people notice is different after they get used extensively by others. But
maybe that's just me.

BUT - I have to admit - there's a kernel here that think makes this different
from RelayRides, etc. And that's that unlike the other companies where they
"suggest" that the user return the car washed, FlightCar is actually doing the
post-rental clean-up themselves, and that makes a difference. I don't like the
idea of coming back to a used, possible dirty car sitting in my garage (i.e.
w/ RelayRides), but if I'm coming back to a parking lot where I know the car
has been professionally washed and inspected, my peace of mind is greater.

I'm still not interested in using the service, but again that's just me (I'm
an anal car nerd), and that certainly doesn't mean others won't use it
extensively.

Good luck guys! Love seeing awesome car-related businesses take off.

~~~
shrig94
Thanks! Hopefully, we can change your mind one day. :)

~~~
anedisigg
One tip for your website. Calendars From To. When i select a date in From
filed, set the To field at least to the same date.

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ebbv
$10 in gas cards per day seems like low compensation for putting my vehicle at
risk. I realize they have insurance but anyone who's had a car get damaged and
repaired knows it's never the same as before the damage, especially if it's
suspension/steering related.

I wish them the best, though, if any industry is stagnant and in need of being
overhauled it's the terrible car rental industry.

~~~
pg
The main appeal for users is actually the free parking. Long term parking at
SFO is $18/day.

~~~
will_brown
This is the second time you commented free parking is the main appeal.

I have to say your single sentences can get my mind racing at a hundred mph.
Example, Why institute the sharing (AirBnB model) if it is less about sharing
and more about not paying for parking? Does this mean there is room for a
purely valet model, where one drives to the airport and a valet drives it back
their home instead of parking at the airport? Is it going to be a common
practice for people to be the AirBnB of "this and that", making the marketing
more important than the service, especially when sharing is not the main
appeal?

I take what I can from your comments, like your perspective on the sharing
model above, but it makes me think getting a YC interview would be bitter-
sweet because really I would want to interview you.

~~~
shrig94
pg nailed it. In the model you described above, you're still shelling out
dollars from your bank account rather than leveraging an under utilized asset
of your's.

~~~
will_brown
As to the model, honestly it was just one quick thought in a stream of
conscience purposely meant to be a contrast to the sharing model, or
leveraging an under utilized asset - nice phrasing.

A company out to get me free parking is a company after my own heart. In no
way was I challenging the AirBnB/sharing/your model, I agree with you and pg
the model I describe would not work specifically b/c "shelling out dollars",
yet there is value if a valet model cost $18 once and a trip was longer than
48 hours, which sounds like your not meeting a demand so much as your making
one.

Keep working on great things.

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sethbannon
I'm a big fan of Zipcar, but getting to/from the airport from/to your Zipcar
has always been a big frustration. I've tried FlightCar and have been
surprised how easy and seamless the experience is, given how young the company
is. I hope they expand quickly.

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ry0ohki
The challenging thing to me with FlightCar is it seems like one of those
things where you need critical mass for it to work. You have to have a close
matching of people leaving and wanting to rent to people returning and wanting
to rent. AirBnB was a little easier because some people already had rentals,
and others had empty rooms.

IE someone has to be arriving in Pittsburgh roughly around the time I'm
leaving, and they have to also be leaving before I get home. I think that's
the biggest challenge (beyond getting people to know about it and trust it).
I'm sure it will take off at SFO at least.

How are the existing car sharing services doing? I haven't actually used one
myself yet.

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kenrikm
The idea is great, I'm sure the'll get the pricing sorted out after the
launch. From my point of view $10/Day + free parking ($18) seems low. Maybe if
you're leaving a smart car or something, but what if you have a nicer car like
a Lexus or Mercedes?

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dublinben
If you own a luxury car, you probably don't care about the cost of parking.
For extended trips, you're likely being picked up/dropped off by a black sedan
anyway.

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dools
Am I the only one that was bummed out to learn that FlightCar isn't making
hover cars?

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sharkweek
This, from all the other YC W13 companies, was the one that made my head tilt
as I thought "huh... that's a ridiculously cool idea." It has a really fun
element to it as far as business ideas go.

Congrats to the founders!

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hpagey
There is something to this idea but I am still skeptical. In ATL I park my car
for 5$ a day using my wife's corporate discount. I am assuming that most of
the regular fliers out of ATL use some sort of discount. So, this might not be
the target market for FlightCar on the supply side. But, these are the very
people whose cars might be available more often for renting.

On demand side, this idea rocks. I remember renting a compact car for a day
for around 150$ (including taxes, fees etc etc).

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joshglick
It's awesome to see companies that came out of the startup scene in Cincinnati
doing so well.

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coin
"Cars must have been made by 1999" So my 2010 Honda Civic is too new? They
only want pre-2000 cars?

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vegashacker
FlightCar (along with Uber, Lyft, etc) has been issued a C&D by SFO airport:
[http://www.sfexaminer.com/local/transportation/2013/04/sfo-t...](http://www.sfexaminer.com/local/transportation/2013/04/sfo-
tells-ridesharing-companies-scram-until-permits-sorted-out)

Surprised that the article didn't mention this.

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shrig94
The C&D is old. It applied to an old model of ours where we operated on
airport property which was rather grey. Our current operation with a black
car, on the other hand, follows all rules and regulations by the airport and
in fact pays the airport on every trip.

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vegashacker
Awesome. In that case I amend my statement. I'm surprised the Examiner didn't
mention this in their article!

~~~
shrig94
Probably our fault for not getting the press involved with the C&D. :)

