Brandery Startup Alum FlightCar Faces Lawsuit

Brandery, FlightCar, Cincinnati Startup, Lawsuit, Sharing Economy

(flight car founders: Kevin Petrovic, Shri Ganeshram, Rujul Zaparde photo: bostonglobe.com)

 

Last year, one of the most exciting startups in the 2012 class at The Brandery startup accelerator in Cincinnati, Ohio was FlightCar. The startup, made up of teenage MIT dropouts. had a revolutionary idea. With FlightCar, instead of paying to park your car at the airport, you could rent it out to somebody else, making money rather then spending it.

After honing their branding, image, and product at the Brandery last summer, the FlightCar team secured a huge insurance policy, follow on funding, and their place in Y-Combinator. In April, after Y-Combinator’s demo day, the trio raked in another $5.5 million dollars in venture capital.

FlighCar quickly began testing their model at Oakland Airport and soon after rolled out service to San Francisco International Airport.

That’s when the trouble began.

Insidebayarea.com reported on Wednesday that the startup is being sued by the city of San Francisco. San Francisco City Attorney, Dennis Herrera, is accusing FlightCar of dodging fees, undercutting competition, and not adhering to rules which include payments by car rental companies back to the airport.

The kicker, though, is the fact that FlightCar actually operates off a lot not located on airport property. FlightCar’s co-founder and Chief Operating Officer, Kevin Petrovic, who isn’t old enough to rent a car himself, told insidebayarea.com “I think they have a lot of pressure from rental car and airport parking companies,” he said. “We do take away some of their business.”

Herrera is counting on ordinances that say SFO is entitled to collect fees from rental car companies that primarily serve it’s travelers even if the rental operation is not located on SFO property.

Petrovic defends FlightCar by saying they aren’t an actual rental car company and hotels and restaurants surrounding the airport don’t pay fees to the airport.

“FlightCar has refused to comply with any of the rules,” Deputy City Attorney Jennifer Choi said. “We want the court to order them to comply with the law.”  The city also points out that FlightCar doesn’t currently hold a commercial ground transport permit or an off-airport business license.

FlightCar joins a slew of “sharing economy” startups–including ride sharing startups like SideCar and room sharing startups like AirBnB–which have faced legal and public scrutiny over their business models.

FlightCar has been operating in Oakland and Boston without incident, so far. Outside of this lawsuit from the City Of San Francisco, people seem to like the idea of renting out their car for money rather than spending it. In addition to the rental fee, FlightCar cleans and washes each car before and after the rental and insures that you get to and from your car without hassle.

For more info on FlightCar, check them out at flightcar.com

See FlightCar’s pitch video from the Brandery’s 2012 Demo Day.

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Brandery 2012 Alumn Flightcar Nabs $5.5 Million From Investors Including Ryan Seacrest

FlightCar,Ycombinator,Brandery,funding,startup newsSo back in July when we heard the original idea behind FlightCar I thought this group of teenage ivy league dropouts was absolutely crazy. Their Cincinnati startup Flightcar is a crazy idea. Their simplest pitch, “let someone else rent your car while you’re traveling” seemed a little far fetched. Combine that with the fact that there’s maybe 10 years driving experience between the three of them and even less business traveling experience, and I was totally disconnected.

Sometime during the Brandery’s demo day back in October my opinion changed. By the end of their pitch, and then a brief meeting with all three founders and I was completely sold.

With the “sharing economy” becoming more and more popular, why wouldn’t someone let another person borrow their car while they are away on a trip. People are doing it with their homes all the time now, by way of Vayala and Airbnb.

The concept is fairly simple. You’re flying out of town for a trip and you have to pay for parking for your car. Rather than paying for parking, Flightcar allows you to park your car in their lot and then while your gone it gets rented out to someone else who is coming into town for the same length or a shorter amount of time. Now, instead of spending money to park, you’re making money with your car that would otherwise be sitting in a parking lot.

To make the value proposition work Flightcar founders Rujul Zaparde, Kevin Petrovic and Shri Ganeshram had to insure a few things for their customers to be comfortable with the transaction.

Insurance: Of course the entire transaction, car, renters, drivers and passengers would need to be fully insured. Flightcar has done this by securing a $1 million dollar insurance policy.

Ease of transaction: The Flightcar team has managed to build in several factors to make the transaction as easy and painless as possible. The Flightcar website helps pre-determine the “borrowing”. Once at the airport (participating airports), you park your car at the Flightcar lot where a ride is provided to the gate. Flightcar will also wash and clean your car prior to renting it out and prior to you picking it up.

After the Brandery, Flightcar was accepted into the YCombinator accelerator program in Silicon Valley. Now they’ve raises $5.5 million dollars from investors. This first round of funding comes from  General Catalyst, Softbank Capital, Ryan Seacrest’s Seacrest Global Group, founder of Airbnb Brian Chesky, with participation from a host of other investors including First Round Capital, Andreessen Horowitz, and Reddit co-founder Alexis Ohanian, according to TechCrunch.

Check out their pitch video from Brandery’s 2012 demo day below:

Find out more about Flightcar here at flightcar.com

The Brandery is one of the country’s top 15 accelerators, check out all of our Brandery coverage here.

Teen Startup Flight Car Takes On Airport Car Rental Industry PITCH VIDEO

FlightCar,Cincinnati Startup,Brandery,airport rental,startup pitch video,pitch video, Brandery Demo Day, Demo DaySo back in July when we heard the original idea behind FlightCar I thought this group of teenage ivy league dropouts was absolutely crazy. Their Cincinnati startup FlightCar is a crazy idea. Their simplest pitch, “let someone else rent your car while you’re traveling” seemed a little far fetched. Combine that with the fact that there’s maybe 10 years driving experience between the three of them and even less business traveling experience, and I was totally disconnected.

Sometime during Wednesday’s demo day for the Brandery though my opinion totally changed.

There are hundreds of thousands of rental cars available at just the top 30 airports in the United States. There’s also hundreds of thousands of cars that sit in long term parking lots at those same airports. FlightCar solves this problem.

Using the FlightCar platform somebody about to go on a trip can sign up to rent their car for the rate they want and the mileage they’ll allow. They indicate what time the car will be available and what time it will need to be back by. When they arrive at one of Flight Car’s satellite parking lots they are greeted by a friendly FlightCar team member who takes their keys and their car.  FlightCar then cleans the car and waits for the renter.

The renter checks the FlightCar website and can see what’s available by kind of car, time available, mileage allotment and price. Because this is a peer to peer sharing product there is much more variety in the cars available than your standard 5 model rental car lot. Did we mention this is also a lot cheaper.

FlightCar rentees keep 65% of the cost of the rental after taxes and fees, so rather than spending money on long term parking they’ll make money off the rental itself.

FlightCar is beta testing in Cincinnati and plans to bring San Jose and Oakland online in the next month.

As a very frequent business traveler my biggest concern was what if I rent my car out using FlightCar and when I get back from my trip the car is not back yet, or worse in an accident.

On the accident side, FlightCar has a million dollar insurance policy on each vehicle. They’ve secured this policy through the only insurance company currently insuring peer-to-peer car rental companies. Not only that but they have secured a deal with their insurance company that prohibits that company from insuring a competitor. That’s something investors will love.

On the pure timing side, the FlightCar guys said customer service is of the utmost importance to them. Their lot attendants will have the authority to give you another rental until your car comes back or get you a ride to wherever you need to go, and then bring your car to you.

See what this amazing trio of young entrepreneurs has cooked up in their pitch video below. They are currently raising $850,000 and have $200,000 committed. They should have no problem raising the entire round, and quickly.