Company name: WhipCar
Founders: Vinay Gupta and Tom Wright
Age: 31 and 33
Based: Oxford Circus, London
Staff Numbers: 3
Launched: April 2010
Tell us what your business does
WhipCar is the first service in the world where a car owner can rent out their vehicle for money, whenever they are not using it. WhipCar.com is a marketplace that connects cars that are sitting idle with sensible drivers living nearby that need a car to use. We take care of all the hassle; from screening drivers and taking payments to insurance and breakdown cover.
Where did the idea for your business come from?
The average car costs upwards of £5,000 per year to own and maintain, yet it is only used an hour a day. We were struck by this waste and wanted to create a service where cars could be made to pay for themselves. Most of us need a car to use every now and then, but we find car rental and car clubs are often expensive and impersonal. Our aim was to create a service that was free to join, and where you could walk outside your front door anywhere in the country and have a car to rent right across the street.
How did you know there was a market for it? How will you differentiate yourself from the competition?
Before we designed the service we spent months interviewing car owners and drivers and built WhipCar with these requirements in mind. Within six months of launching we already had WhipCars available across 450 towns in the UK, with many of our owners making hundreds of pounds per month (some households have made thousands). WhipCar is unique in that it will usually be the closest, most flexible and affordable way to rent a car in your area, and it is completely free to join.
As well as building a system that automatically screens all drivers and owners, we spent eight months working with Lloyd's of London to create the world's first insurance product that automatically protects both owners and drivers during rentals. In the unlikely event of an accident, an owner's existing insurance isn't affected. We also manage all payments for owners who are paid monthly directly into their bank account, based on how often they rent out their car.
What were you doing before starting up?
Vinay was previously a digital media strategist and consultant. Tom previously founded gurgle.com, a social network for pregnant women now owned by MotherCare, and bookarmy.com, a book recommendation service now owned by Harper Collins. He held a number of senior digital strategy and development roles at companies and met Vinay while at Fleming Media.
It was here that they had the idea of WhipCar and it felt too big an idea to ignore.
What appealed most about being your own boss?
The most exciting part of running a web start-up is the speed with which you can action good ideas. You also get real feedback instantly and it’s great to be able to create a service that people love and to make it a little better every day. We have students, retirees and families all making money from their cars while at the same time providing access to cars to those who need them. WhipCar is growing very quickly in London and other big cities, but we are equally proud of being ‘the only car in the village’ in locations all over the country, where it doesn’t make sense for traditional operators to set-up shop.
What planning did you do before you started up?
As a world's-first business, we spent 12 months refining how the service would work before we launched it publicly. Market research and core strategic partnerships occupied the first six months, followed swiftly by fundraising and product development. In creating a new user behaviour we have had to pay close attention to safety, security and ease of use.
How did you raise the money?
We are backed by Delta Partners, an Ireland-based venture capital firm. We spoke to 10 VCs but were fortunate to start and finish the fundraising process within 6 months, which allowed us to focus entirely on the product for the six months prior to launch.
What challenges have you faced and how have you overcome them?
Our biggest challenge is educating the market about new user behaviour. Before WhipCar, nobody gave a serious thought to renting out your car as a mainstream proposition. So we need to help people understand why this makes sense and then give them a great experience that keeps them coming back. We launched this year and are on pace to be the UK's largest car club in less than a year. Our aim is to have a WhipCar available on every street in the UK.
How have you promoted your business?
So far, through public relations and word of mouth, but we have some interesting plans for next year.
How much do you charge? How did you decide this?
WhipCar is free to join for both owners and drivers. We want people to use cars more sensibly so we wanted to remove barriers to participation, such as annual or monthly fees. Owners set their own prices for their cars and we give them guidance based on the age, model and location of their car. We make money by charging a success fee to owners (15% of the money they make) and a small transaction fee to drivers (£2.50).
What has your growth been like?
We already have over 1,000 cars live on WhipCar - the UK's largest car club took approximately six years to get to a similar size. We are growing at a faster rate than anticipated but we’re not complaining!
What’s the impact on your home life been like?
It’s a blur between work life and life outside of work. We are always thinking of how to improve the customer experience, so it’s hard to shut off. If you have a vision for the future it is actually a lot of fun.
What would you say the greatest difficulty has been in starting up?
Trying to change user behaviour does not happen overnight.
What was your first big breakthrough?
Being interviewed by The Economist and WIRED magazine before we had even launched.
What would you do differently? ie what have you learnt?
Don't try and control the rate at which your service grows - let your members do that for you.
What advice would you give to budding entrepreneurs?
If you have a great idea you can execute on then ignore the naysayers. Do lots of research and consumer testing. If it still feels like a great idea do it. No excuses.
Where do you want to be in five years’ time? Do you have an exit plan?
There are 29 million passenger cars across the country. Our aim is to have a WhipCar available to rent on every street in the UK. We don't think it will take us five years.