Last week French peer-to-peer car sharing platform Drivy launches its service in Germany. I met Drivy founder Paulin Dementhon and German Country Manager Gero Graf for an interview on Drivy’s plans for the future, Berlin’s advantages and the share economy.
Tobias Schwarz: What is Drivy? How does it work?
Paulin Dementhon: Drivy is a peer-to-peer car rental service. People who own a car but don’t use it all the time can list it on Drivy. Neighbors or tourists can rent that car – therefore Drivy helps people who don’t want to own a car to find one to go e.g. on a holiday weekend trip in their neighborhood. They can rent it cheaply from someone else. So it’s a kind of Airbnb for cars.
Tobias Schwarz: Drivy started in France 2010. Now there are more then 350.000 users and 20.000 registered cars in France. This week you started your service in Berlin. Other cities will follow. Which German cities do you have in mind? What are your plans for Germany? How long should it take to reach your targets here?
Gero Graf: We are starting in Berlin as you said and then early next year we are going to take on Hamburg, Munich and Cologne. We try to be a very community-based company. We think it’s very important (in every city) to have both demand supply sides so that both renters and drivers connect very well to each other. That’s why we want to go city by city. It will take some time to get 350.000 users [both are smiling] but I think it’s more important to get the good quality users first in these cities rather than getting those high numbers. We will see next year how quickly we can evolve.
Tobias Schwarz: A friend of mine, Felicitas Hackmann, mentioned the so-called chicken-egg problem in her article on VentureVillage: Drivy has to build a community of car owners and renters at the same time to provide both parties a good amount of offers. I came to this interview with an UberPop car, because I don’t have a car and most of my friends don’t have cars either. So why did you choose Berlin? Do you have any practical knowledge from building the community in France?
Paulin Dementhon: In Berlin there are many choices. First it’s the largest city and the largest car rental market. If you look at traditional car rental it’s simply the number one in domestic car rental. Then there is the other reason: it’s the strength of the startup scene and the fact that the ecosystem of startups is quite strong. So it’s probably easier to spread the word about this kind of sharing economy concept in Berlin than in other cities. I think it’s probably the most advanced city in terms of startups, new concepts and sharing economies specifically.
Gero Graf: And even on that I’m just thinking about the sharing mobility piece. If you are looking at concepts like DriveNow or Car2go, which are by far the number ones in inner city car sharing. We are complementary to those kind of companies. Because you can use them on the hour, if you go from A to B within the city of Berlin, but only in the city of Berlin. People are already aware of this in Berlin and I heard that the biggest ratio of users of DriveNow and Car2Go are in Berlin. So a lot of people in the city already know about those concepts and now they can get Drivy as well as a complementary service to DriveNow and Car2Go.
Paulin Dementhon: That’s very important. You’re right. Berlin is the world leading city in terms of car sharing and what we call car sharing in these hourly rentals. So basically the average trip on DriveNow or Car2Go is only half an hour. In our case it’s highly complementary, because in France our average rental is 3.5 days. So there is a very good solution within the cities during the week. That means that there is a bigger opportunity to get this same people rent out cars on weekends or daytrips or IKEA trips or longer holidays. It’s very good that there is already a strong mobility ecosystem. Berlin is quite unique worldwide because even in New York, London or San Francisco you don’t have as many car sharing options.
Tobias Schwarz: So it’s like an additional service for me if I want to go to Chemnitz, Magdeburg or Rostock for the weekend where I can’t go with Car2Go or DriveNow?
Paulin Dementhon: Yeah, if you’re a not super rich and you don’t want to pay some hundred Euros for a weekend then Drivy is going to be the right option.
Tobias Schwarz: You have a special deal with the German insurance company Allianz. They created an Ad-hoc-insurance that combines a third-party insurance, a partial coverage insurance and an all-risks insurance just for Drivy users. Can you explain what that means for your users?
Gero Graf: Basically what it means is that the renter, the guy who owns the car obviously has his own insurance. For the time of the rental this will be substituted by our Allianz insurance. At the moment you close the rental contract with the driver. The Allianz insurance will take over the insurance for the time of the rental. And then it’s fully covered for all related cases. So we have a 24 hour/7days a week service from Allianz. We just call up a number and you will get service right away. And we will take care that the passengers get back to the place where they belong to or to the places they wanted to go to. The same with the car who will go to repair shops that can actually be repaired.
Paulin Dementhon: An insurance is the key-service inside our marketplace. Since putting the people in contact is one thing which is not so difficult. We could just be a classified website. But the insurance is really what makes the service fruitful and useful. I started four years ago and it took me one full year to go and see all the insurance companies that I knew. I was getting kicked out of every insurance and finally we found one which was a national French one. Finally after two years we were able to convince Allianz to experiment with this and we already had the view of coming to Germany. That’s why we picked an international brand and insurance. It is very interesting because we were seen as awful like four years ago, no one wants to insure this thing. Then progressively it went mainstream and now all the insurance companies at least in France – where the market is a bit bigger – are fighting to get in. The relationship with them totally reverted. They understood that this trend to go from ownership of cars to just usage of cars was here to last. So they wanted to be part of this experiment. By now we have a very strong relationship with the Allianz.
Tobias Schwarz: You also offer your users a 24-hour Roadside Assistance. Do you have a special partner for that? Is it a free service?
Gero Graf: Yes, it is part of the whole package. It is part of the insurance. In case of a breakdown or an accident the Allianz has a starter company which is called Allianz Global Assistance. As a driver you get the (insurance) papers which include another paper where you have the number of Allianz on it. This is a number you can call 24/7 in case something happens. They will take care of you or the car in case of a breakdown or an accident.
Paulin Dementhon: There is no additional cost. It is included in the price because there is no way we could propose a service without an assistant.
Tobias Schwarz: The Bundesverband der Autovermieter Deutschlands e.V. (Federal Association of German Rental Car Companies) warns about private car sharing, because some cars aren’t safe. Do they have a point? And if so, how do you handle that problem?
Paulin Dementhon: One thing is that roadworthiness and the safety of the acres is not a problem specific to car rental. I mean, when you drive with your family and your kids at the back of your car you want to save cars. So this is a lower problem car safety and there is already regulation for this. I think in Germany it is called the TÜV inspection, in France it is another one. The principal is to rent and drive a car which is roadworthy and has all its documents up to date. This is the first point. Then there is the fact that it is a marketplace which generates feedback between users. That helps us filter out the cars that are not in good enough conditions.
Gero Graf: When we look at the review system. Underneath every single car you can clearly see the five star rating. There you can basically see what the users have said about the experience with the car and this will also come up in case of condition of the car. A lot of people write down that the car was in a great condition and driving very easily. That creates trust and lets us filter out negative cars.
Tobias Schwarz: The share economy is something pretty new to our societies. That causes some unresolved questions. In the next years we will see politics of regulation on national and European level. What should politicians be aware of before making laws?
Paulin Dementhon: The first thing I think is to remember that this new economy is extreme beneficial to both supply sides – the ones who share their goods and people who buy the service. Because it makes extra income on the on side to pay for the costs and on the other side it offers great service – an local proximity service – without any public investment. In case of transportation it is quite amazing because normally transportation is one of the highest costs in the budget of a state or a city. And there you can develop very good local transportation without any public investment and involvement. So it is a kind of a free lunch for the communities and the states. This is important.
I do agree that in this sharing economy it is a very vague concept. Inside the sharing economy you have purely private people sharing their own stuff to offset the costs and you also have marketplaces like Uber for example which was banned from Germany with independent professional services of people who are making money out of it. And it is very important not to be confused about these rules that are different for people who are doing it from time to time and not for money and just to offset the costs and people who are doing it professionally. But I think both can be very beneficial just in terms of fiscal policy and regulations the two have to be considered differently.
Tobias Schwarz: Sometimes public relations and journalism don’t fit together very well. So last but not least I would like to know from you, what did I forget to ask you about Drivy?
Gero Graf: Oh wow. I mean there is always a question on mentality. Why would it be successful in France? Why would it be successful in Germany? I think we have a very good and strong position. We have the experience from France with the product, also the customer service which we have in the back, but more so we are coming at the right time to the market. Four years ago there was no Airbnb for instance in the public opinion. Now we have 12.000 flats only in Berlin which are shared on Airbnb. We have concepts like DriveNow, Car2Go in the City which have 200.000 to 250.000 users. So the people are aware of this concept of sharing goods with each other and using them on the daily basis. That’s why we are starting to go into the German market. They are educated and they understand the concept.
Tobias Schwarz: Thank you for your time.
Image by Tobias Schwarz (CC BY 4.0)