RelayRides Growth Strategy – How to Launch and Grow Fast
RelayRides launched as a peer-to-peer service for car sharing in Boston during the summer of 2010. Originally it allowed participating car owners to offer their vehicles as rentals by the hour, day, or week.
Late in 2010 the service expanded into the San Francisco area and then went nationwide in March 2012.
Early on the company benefited from $19 million in seed money from venture capitalists like General Motors and Google. Those funds were used to create brand awareness and acquisition of both car owners and renters. Much of this early activity was fairly standard TV and digital video ads paired with a search-based ad presence.
The idea was sufficiently attractive that during the summer of 2012 RelayRides expanded its total fleet by a factor of 40 with reservation volume expanding seven times. This allowed the company to have a presence in 49 states.
Based on market testing, they launched an experimental variant of the service at San Francisco International Airport. At the time, the goal was to stand out from the competition, but what happened so polished the value proposition of their market fit that RelayRides completely changed their focus to achieve maximum growth.
In looking at what users wanted, the RelayRides team zeroed in on the problem of transportation to and from airports. Traditionally, travelers could have the maximum degree of control over their own departures and arrivals by leaving their own cars at the airport, but rising parking expenses over the past few years have increasingly made that an exorbitant option.
RelayRides users drop their cars off at a parking lot and are taken to their terminal in a shuttle. Arriving members rent the cars for use, returning them to the lot when they leave. All vehicles receive complimentary car washes in between trips. This model sent membership soaring and the service spread to 229 airports.
In September 2013, the company announced that it would focus exclusively on long-duration car rentals since 95% of their revenues were being generated by that source. Customers on both ends of the equation love the option.
Renters pay 40% less for a RelayRides vehicle over a traditional rent car
and the average vehicle owner makes $250 a month in profit. Some owners are so attracted to the concept, they put from 2-4 cars into service.
In studying the transportation/ride share market as part of the new economy of sharing, RelayRides hit on the untapped resource of underutilized vehicles that spend most of their time in the garage or parking lot.
As a facilitator of the owner/rental connection, the company takes 25% and in exchange provides $1 million of insurance on the vehicle during the rental period.
To assuage safety concerns, background checks are performed on participating owners and vehicle registration is verified. It also looks at the driving and safety records of prospective renters.
Again, this is an excellent example of impressive growth based on intuitive and extensive market research with ongoing testing in place to keep the company poised for a course direction to meet user needs. RelayRides has used basic but powerful growth hacking strategies and is reaping the rewards.