Why @UpfrontVC invested in Disruptive Rental Car Startup @Skurt

Rental cars.

I have never met a person who loved their rental car company or the experience of turning up at an airport, waiting in line, paying a huge fee and then dealing with returns, airport shuttle buses and so forth not to mention half-washed and smelly cars. I think the closest parallel I have is the feeling I had for taxi cabs (inconvenient, smelly, expensive) before Uber. The rental car companies have a million scams to get more money out of you – mostly notably the gasoline scam. They either ask you to fill up your tank before returning the car (and gauge you if you don’t) or they pre-sell you “cheap” gas but when you factor in that you never return your car with a totally empty tank is also a scam.

And leave aside the fact that it’s very hard to rent cars if you’re below 25.

You simply can’t build a long-term great company by duping customers and with the top three rental car companies controlling 90+% of the market their behavior won’t change. It’s a classic “innovator’s dilemma,” making this market ripe for disruption.

Surely the startup can do better. I’ve looked at many companies trying to disrupt this market and I’ve seen very interesting solutions and feel certain one or a few will stick and become big. But it wasn’t until I met the team from Skurt that I felt compelled to invest.  They found a model to transform the entire experience and deliver a mobile-first product that is as good as using Hotel Tonight or Hipmunk (in fact, the founder & CEO of Hipmunk liked the product so much he invested!).

The founder & CEO of ProductHunt loved it, too. He put out a “hunt” today for Skurt including a $100 promo-code (obviously only if you are reading this post on a timely basis!) based on his own experience in using Skurt.

Skurt

So what actually is the product? It’s the master mind of Josh Mangel, Harry Hurst and Aaron Peck. When Josh (YC alum) first came to see me he was all of 22 years old and on his third company. He explained to me that he couldn’t rent cars because he was 22 and it frustrated him and that he had been discussing the broken market with his colleagues Harry & Aaron and they decided to focus on building an amazing experience.

Like Hotel Tonight you log into the app, select your price point, enter desired location / date / time, enter payment details and done. When you arrive at the airport you’ll have a concierge waiting for you to take you to your car and don’t have lines or paperwork

hassles. The rental cars are significantly cheaper than the majors because they source them from vendors who are independent and located just outside of the immediate spatial monopoly of the airport. When you want to return it you simply bring it to the same location, drive the concierge to your terminal and he or she takes the car from you there and you’re off to your flight.

And coming soon will be Skurt’s neighborhood delivery service where you can book a car to be delivered to you at work, a hotel or at home. As it turns out, the market for “local rental cars” exceeds the total value of airport rental cars.

But of course if you’re a tech geek you’re thinking, “Yeah, but Mark, in the future we’re all just going to Uber or take autonomous taxi rides by Tesla!” Not so fast.

The rental car industry is $26 billion in the US alone and $48 billion globally. All industry forecasts see this market continuing to grow. There is a reason there has always been a taxi market and a rental car market. The former is great for point-to-point trips but doesn’t meet the entire needs of a person who might be taking 6 trips in one day or who is replacing her car temporarily after her car is in the shop. So while I am close the the world’s biggest fan of Uber, there are many times where I end up renting cars vs. Uber. And so will the market. Different horses for different courses.

Right now Skurt is live in Los Angeles where they have access to an inventory of 5,000 cars and soon Skurt will be launching in San Francisco. Expect Skurt to roll out nationally, initially through major markets, as it increases the size of its operating team, its capital and its national supplier relationships. I hope you can give it a try. So far we’re batting 1,000 in terms of people we’ve recommended who try it and people coming back raving about the experience.

And if you happen to be visiting Upfront for business please contact us for a promo code. We’ll pick up your first day’s rental on us.