DriveTribe Insights Interview – Katy Medlock Head of UK, Drivy
Katy Medlock, Head of UK for car sharing platform Drivy, has the car hire sector in her bones. Her family business, set-up by her grandparents, was a car rental firm and, after moving to New Zealand from the UK aged thirteen, she spent the formative years of her career leading the marketing strategy for car and campervan rental firm, Jucy Group.
Both experiences have given her a shrewd eye when it comes to understanding the opportunities and challenges of managing a mobility platform, centred on the ever-expanding sharing economy. An economy, perhaps typified by Air BnB in the property sector, that empowers everyday people to earn an income from hiring out owned assets and services.
Mobility as a Service (MaaS), is a sector that has grown to fame through ride-hailing businesses like Uber and Lyft but has now morphed to include car sharing - car owners hiring out their vehicles, making money from an asset that otherwise remains idle for 96% of its lifespan (source: RAC Foundation).
The concept is a classic marketplace, with supply-side and demand side entities, mutually sustaining a virtuous cycle of ever-increasing commerce. Technology is of course the enabler, providing an environment that matches buyers and sellers in a safe, convenient and reliable manner.
For Katy, that model very much centres on establishing the supply side first, ensuring visitors to the platform can find a vehicle to meet their needs “ideally within a 10-minute walk”.
While many in the car hire and selling business have raised eyebrows of concern that MaaS will disrupt and threaten their business future, Medlock claims Drivy is helping some to generate an extra income. “It’s not just about peer to peer sharing, any car not being used can be connected to our buyers. Other car rental firms, car dealerships and businesses with vehicle down-time, can effectively generate cash, it’s a true blended supply-side model”.
With Drivy suggesting that a 2014 registered VW Golf might generate some £560 in revenue for their owner each month, its little surprise that it has also attracted the odd amateur entrepreneur. Medlock says “there are two Drivy car owners who have each amassed a fleet of 60-cars to hire out. One, a property developer, funded their kids through college using the income he generates”.
Given the scalability and dynamics of the model, its little surprise that Drivy – originally founded in France – has attracted investor interest. In April this year, California-based car sharing platform Getaround.com acquired the business for a reported $300m.
The combined group now boasts some 5million users, sharing 60,000 cars across 300 cities in Europe and the USA. In the UK, 90% of their cars are in London; 2,000 vehicles shared by 25,000 users. Of those, 500 cars in the UK are “keyless” connected vehicles, operated by a mobile app that enables the hirer to simply open and operate the car using their smartphone, removing the need for a formal handover between owner and hirer.
As Medlock explains “most of the keyless cars are urban based, in rural areas owners tend to meet the hirer for a formal handover. Keyless cars are typically rented nine times more frequently than standard cars and generate 92% of Drivy's business”
Given the simplicity of the exchange, Drivy has a robust but elegant vetting and control process to ensure both buy and sell-side play by the rules. As a hirer, each user has to take a selfie of their driving license to reveal any points or convictions. Hirers must prove their vehicles have a valid MOT as well as listed on the Motor Insurance Database.
Aside from an insurance scheme, operated by Allianz, to protect owner and hirer, the keyless process also has a five data-point process to ensure someone can’t just take a car and disappear into the sunset never to be seen again.
- Firstly, there is a mileage allowance – typically 100 miles a day – which if the hirer exceeds, the owner is automatically compensated at a penalty rate.
- Secondly there is a fuel allowance limit, whereby an owner is automatically compensated if the vehicle is returned with a lower level of fuel than agreed at hire
- Third, an immobiliser will activate in the event of suspicious activity; the car moves out of the agreed region, isn’t returned or notably exceeds the mileage limit
- Fourth a GPS tracker monitors the vehicle’s location
- Fifth, central locking can be remotely activated to prevent access if the car is vacated.
In creating such a process, Drivy are in effect creating a business advantage that introduces minimum standards and costs of entry to potential competitors. Each keyless car has to be hard-wired by an Engineer, taking around 45-minutes. The cost for the set-up is borne by Drivy and, following an initial free 3-month trial, is effectively recouped through a £26/month surcharge to car owners.
Overlaying all of these basic security and management measures, Drivy operates the classic buyer and seller review system, where both parties rate each other through a set of quick online forms. According to Medlock “its impressive to see the measures that owners go through to ensure they get a good rating, leaving bottles of water or being quick to respond to any questions or feedback from the hirer”.
Drivy also limit their risks in the way they selectively choose vehicles for their platform. The perfect cars are eight years old or younger and are worth less than £36,000. Drivy isn’t and doesn’t intend to be the place where you can hire a supercar for the weekend.
While the majority of Drivy cars are used for short trips across town and the average hire-period is two-days long, many are hired for as long as a month or more.
As Medlock explains, “the concept is all about replacing car ownership and using vehicles more efficiently. It’s also about changing perceptions, especially within a society where cars are seen as a symbol of status and pride. The educational challenge is convincing people to give up their car as a fixed cost, their go-to-away drug. That challenge is made easier for us by legislative changes like the Ultra Low Emission Zone (ULEZ) in Central London, forcing would-be car buyers to consider the costs and complexities of car ownership.”
Given the merger with Getaround, the ability to bring the message to the masses is now that bit easier as global scale comes into play. That global presence received a further boost this week, when the business acquired Norway’s largest car sharing platform Nabobil for $12million.
The scale that M&A affords, not only brings a bigger customer pool, it also enables efficiencies across technology systems and marketing.
In the UK, that marketing has focused almost entirely on London, with advertising across the Underground Tube networks, where posters have sat alongside rival car sharing platform Turo.com. According to Katy, there are plans to extend this brand activity nationwide in the near future, as they seek to build their customer base in other cities and regions.
Drivy's marketing also includes organising a number of “owner meets”, where fellow car renters can meet-up to hear presentations and share tips on how to maximise their business earnings and review scores, a strategy that builds a sense of belonging with the brand as well a feeling of being part of a fast growing community.
Drivy operate in a fast growing competitive market up against other car sharing platforms which, in the UK at least, includes the likes of Zipcar, Hiyacar and Turo, the latter with a more direct focus on the leisure mark.
Given Zipcar were acquired by Avis car rental for $500m in 2013, the mobility as a service industry looks set for an interesting battle ahead, as emerging brands seek to win brand awareness and wallet-share alike.
The sector is also attracting a host of spin-off niches, in the UK for example, carandaway.com specialise in renting your car while you’re on holiday, avoiding airport car parking charges while giving you the opportunity to earn money as you bask on the beach.
Other related niches include the likes of Drover and Splend, who provide flexible rent-to-buy schemes that allow people to acquire a fully insured car ready for business use – in other words, a car that can immediately be deployed to generate an income through car sharing and/or as an Uber or Lyft ride hailing vehicle.
With MaaS growing in complexity, feeding spin-off businesses, the industry is set to grow – according to BIS Research the global MaaS sector will be worth $1.75. trillion by 2028.
The question for the rest of the automotive sector: whether to ignore it or embrace it?
To see how DriveTribe users feel about car sharing, see our related article Are You Prepared for MaaS Disruption