Car Next Door has just raised $5 million from a new raft of new investors, including crowd-sourced equity funding.
The boost will help the business, which has turned to the rising global sharing economy to link car owners with borrowers who need to use a car temporarily.
CEO Will Davies says paying $6000 a year for cars that are parked 90 per cent of its life is “instinctively stupid”.
“There’s an option for them to be able to earn some extra money from it and reduce costs and do something else with the money,” he says.
For owners like Sam Duncan, it’s taking advantage of having a valuable asset that doesn’t really return on its initial outlay, and using it to help pay loans.
“I bought a brand new car and thought I’d give it a go and see what happens and in the first month I made a fair bit of money, about $300, so I was very happy with it,” he says.
For borrowers like Keryn Paviour-Smith, it’s a convenient service, after returning to a big city and realising owning a car was unfeasible.
“Car sharing is the kind of next evolution. If you look at things like Uber, Airbnb and Airtasker, people are renting out assets that they have, and the car is probably the next thing where you don’t really need to own a car, especially if you live in a big city,” she says.
However one of the business’s challenges was reaching these two customer groups and convincing car owners their asset was safe.
“The first time I did it, it was scary because the girl who hired my car kept on extending the booking and I was getting nervous, but the car came back just fine,” Sam says.
The business experimented with implementing a number of technological safeguards in place.
“In the early days, we had all these devices wired into the car,” Will says.
“It had an immobiliser in it, which was very invasive to car electronics and it was costing us a lot of money to get these cars installed, so we came up with a new way which was to attach an electronic lock box to the car and have a simpler tracking device.”
Added protections in the business include screening new customers with ID and credit checks and covering mechanical breakdowns, theft and accidents with insurance.
As the business shifts gears and grows, Will says the business is also aimed at having a positive impact on the environment.
“We set this business up in order to reduce carbon emissions,” he says.
“We want it to be a great business but it’s carbon emissions first and I think people can feel it and know our hearts are in the right place.”
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