TRAVEL

Free rental cars for flexible travelers

Wednesday 27 January 2010, 9:27AM
By Transfercar
2270 views


Since its beginning in 2008 Transfercar has provided over 2,600 free trips in rental cars and campervans to flexible travelers across New Zealand.

More and more Kiwis are taking advantage of free travel deals throughout the country with Transfercar.

Since launching in September 2008, New Zealand’s only free travel website – www.transfercar.co.nz – now has 8,400 registered users and 29 major rental car companies having joined up. Amongst them are Britz, Maui, Jucy, Apollo and Europcar. The site has had 164,000 visits to date.

Some 246 free cars were listed in December alone, a 59% increase over figures same month last year. With the holiday season being upon us, Transfercar founders, Espen Grimstad and Brian Karlson, expect to reach 300 free cars and campers per month until the end of March.

“We’ve been delighted with the response and feedback to Transfercar, which was developed in response to an ongoing problem rental car companies experience when trying to return cars to their home destinations.

“The model is obviously working really well and we’ve created a ‘win win’ solution for car rental companies and the public alike,” says Espen.

Transfercar provides travellers with free car and campervan rentals to dozens of New Zealand locations including in some instances, free petrol, ferry crossings and insurance as well.

Christchurch to Auckland and Queenstown to Auckland are the most popular relocation routes, correlating with the high number of vehicles supplied by the rental companies for this particular route.

“But we are not just offering free vehicles to the popular city destinations. We have vehicles criss-crossing the country from Paihia in the north to Invercargill in the south.” explains Espen.

According to Espen, rental vehicles tend to pile up where they are not needed and getting them returned to their ‘home destinations’ is expensive. Transport companies charge up to $800 for get a single car back from the South Island to the North Island.

“Rental companies often need to wait until they have enough cars at a single location to make returning them economically viable, meaning vehicles can be out of circulation for quite long periods of time,” explains Espen.

And while some rental car firms offer their own free vehicle return service, their offerings are not widely promoted in fear of cannibalising its own business.

“As an independent and specialized online service solely offering free travel through the return of rented vehicles, Transfercar can facilitate contact with potential drivers much faster than an individual car rental company can and we have access to returning relocation drivers,” says Espen.

Transfercar charges car rental companies a fixed fee per relocation while the service is free to the drivers. Rental car operators submit relocation opportunities to the Transfercar database via the website. Anyone with a full driver’s license can register to become a relocation driver. Drivers can view and request to drive a any of the cars or campervans through the website or by email after signing up to the Transfercar network on www.transfercar.co.nz.

Transfercar is soon not just for kiwi’s either. The company is in the final stages of testing its Australian sister website and are expecting to launch their trans-Tasman service in only a few weeks.

Ends

Background on Espen Grimstad and Brian Karlson:

The inspiration behind Transfercar came after Espen took a part-time job with a car rental company while studying in early 2007. After seeing how much money was spent on transporting unallocated cars between rental car branches, Espen decided there had to be a better way.

It wasn’t long before Espen joined forces with his former university lecturer, Brian Karlson, to take the concept to the next level.

Soon afterwards, Espen and Brian decided to enter Transfercar in the University of Auckland’s business plan competition called Spark* - a move they felt would help them build a stronger business plan for the service and explore future investor potential.

Their hard work paid off when they were announced one of the winners in the $10K category, and from there, were able to attract an investor in the project.

A year later, the Transfercar website was launched and has steadily grown from having 3 rental car companies as customers to the 29 they have today.

Business Summary:
Transfercar’s service is an online system that quickly matches rental car companies’ need to relocate cars with a database of flexible drivers available at the needed pickup location. Because Transfercar has a low cost in facilitating the relocation it is possible to provide the same outcome for the rental car company as using a train or a truck, but at a substantially lower price.

Management:
Brian has 10 years experience in retail and marketing research. He has been involved with several start-ups, all showing to growth within a short time. Brian is expected to complete his PhD in Innovation Management during 2010.

Espen has 12 years experience from internet strategy and online marketing. He started up two companies, the last sold to the worldwide advertising agency BBDO. Espen also has experience from the rental car industry.

Customer Problem:
Rental car companies pay expensive relocation costs. Transport companies charge over NZ$800 to relocate a car 1,000km in New Zealand. Similar high prices exists in AU and US.

Customers:
Ace Rentals, Apollo, Escape Rentals, Europcar, Jucy, Pacific Horizon, Pegasus Rental Cars, Spaceships, THL Rentals (Britz, Maui), Tui Campers and many more.

Business Model:
An online system that quickly matches rental car companies’ need to relocate cars with a database of flexible drivers. A fee is charged to the rental car companies for each relocation that Transfercar facilitates.

Competitors:
The NZ and AU market is scarce on driver based relocation services. Both markets have a high number of trucks or train based vehicle haulage companies and they make up the majority of the competition.

Competitive Advantage:
-Established in New Zealand and a recognized brand
-Relocating vehicles for a lower cost than any other competitor
-Website running 16 months

Current results:

New Zealand:
• 29 rental operators as customers
• Over 8,400 registered drivers
• Averaging over 200 relocations per month

Australia:
• New website built, in testing stage
• Launching in February 2010
• 3 rental operators signed up as customers