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The sharing economy has been taking the world, and South Africa, by storm in the form of start-ups that use the internet to match customers with service providers.
This development has meant convenience for consumers, but has also been opposed by proponents of more traditional business models – e.g. the harassment of Uber drivers by metered taxi drivers in South Africa.
One pivotal page that critics can take out of the disruptors’ book is the one on pioneering accessibility.
Airbnb, for example, has given hotels worldwide a run for their money by making accommodation a lot more affordable, thus making it much more accessible.
Likewise with Uber and now peer-to-peer car rentals, which enable car owners to make their vehicles available to others to rent for short periods – or in the case of RentMyRide, longer periods of time.
RentMyRide connects renters with people who want to earn additional income by renting out their privately owned vehicles.
The business was founded in 2016 by Peter Puren, who had been a logistics coordinator at Avis UK and a branch manager of Budget Car Rental.
“The platform is the first of its kind in Africa and was inspired by other peer-to-peer business models such as SnappCar in Europe and Turo in the US,” says RentMyRide’s director, Sebastian Brokmann.
Brokmann, a Dutch national who now lives in Cape Town, says the idea came to Puren while he was working for traditional car-hire companies.
Puren noticed that the rental agencies’ practices were labour-intensive and the companies had a lot of overheads.
Puren also realised that “people’s cars were idle and unused 90% of the time. If one thus rented their car, it would be a good way to make extra money and cover the costs of running it, among other things.”
It boils down to extracting as much value as possible from a depreciating asset, says Brokmann.
Frank van Driel, an internet entrepreneur also from the Netherlands, took charge of the back-end and marketing of the business.
RentMyRide has a staff complement of 10, made up of customer service and IT teams, directors, operations and sales managers.
Brokmann spoke to finweek about the growing popularity of the platform.
What sets RentMyRide apart from other car rentral companies, and how tough is the industry in which you all operate?
We compete with traditional car rental companies. What sets us apart from them is that we are up to 40% cheaper.
If you are going away on a holiday or business trip you don’t have to look far afield to rent a car when you could just rent your neighbour’s vehicle.
It’s a more convenient, friendly, safe and cheap service.
Safety measures include checking the renter’s driver’s licence to make sure that it matches the name on the rental reservation.
There is also a trip checklist to assist both parties, and that entails checking any existing defects of the vehicle with its owner before agreeing upon its current condition.
RentMyRide also offers full comprehensive insurance while cars are out on rental. To mitigate risk, renters are verified and payments are made upfront.
Similar to normal car rental companies, a deposit is also held.
What was the motivation for turning Puren’s idea into a business?
It stemmed from the concept of enabling and participating in the sharing economy, like renting out your own house via Airbnb.
It is a growing and open economy in the sense that your car is not very active, because you don’t use it all the time.
So, sharing it could be a good way of generating money to cover overheads.
What was unexpected?
RentMyRide actually works well.
A lot of people are using the service and are jumping aboard the platform a lot quicker than we had expected.
How did you go about acquiring funding?
RentMyRide was self-funded to get started.
We now have funding through equity financing by South African investors.
Since joining as director, what have been the biggest challenges you have had to deal with?
First, South Africa and the African continent as a whole have a different way of doing business. Getting to learn and conform to new rules that are different from how things are conducted in Europe was challenging.
The second is that building the right platform takes time.
The other thing about South Africa is that I generally find that people are over-friendly, which is a good thing but was quite difficult to come to grips with.
Lastly, most of this continent, and I say this with a lot of respect, is not as far ahead as Europe and still has a lot of work to do in terms of business and technology.
There are actually a lot of opportunities here.
How do you stay motivated when faced with these challenges?
Growing the business keeps me going as it’s not yet fully established. It’s still in the early stages, so things are still exciting.
At this point, what do you envision for RentMyRide?
To enable the whole of South Africa to rent a car from their neighbour.
This article originally appeared in the 1 March edition of finweek. Buy and download the magazine here.
