From our CPO JP Galvao
Part 1: The Genesis of Car Subscriptions
The concept of car subscriptions isn’t novel. For a century, the automotive industry has crafted such a resilient and competitive business model that owning and maintaining a car became an integral part of the modern family dream. However, with declining family incomes and rising values of sustainability and conscious consumption, a pertinent question emerged: Why own a car that remains idle 90% of the time and bear the associated costs?
Fast forward to the late ’90s when two entrepreneurs, Robin Chase, and Antje Danielson, seized this collective sentiment, birthing what they dubbed the “ZipCar.” Their model was straightforward: cars strategically placed in public parking spots, available for hourly usage — a sublime embodiment of asset use maximization.
While their idea faced initial resistance, after 13 diligent years, they found their exit with Avis Rent a Car. This takeover heralded the advent of car-sharing, the main idea behind car subscriptions. When the world’s second-largest car rental firm acquired a company like Zipcar, it was as if a starting pistol went off for entrepreneurs globally. This race saw the birth of Turo, Getaround, and my very own creation: VAI.
All of us stared at the same horizon: a seismic shift in car ownership. When founding VAI, I viewed hourly sharing as a strategic misstep. Instead of slicing the pie, first ensure the entire pie is accounted for. While Getaround mirrored ZipCar and Turo bet on 24-hour slots, my gamble was on the full 30 days. VAI’s success skyrocketed, yet within a few operational months in 2016, our coffers ran dry. Although based in the U.S., I recognized that securing funding without a domestic track record would be a herculean task. Venturing to Brazil, I successfully pitched, raising an initial $4 million. However, the catch was relocating our operations to São Paulo.
Around this time, Uber unveiled its car subscription venture, Xchange Leasing, after unsuccessful partnerships with traditional car rentals. This move signaled the burgeoning complications in the car subscription landscape — a topic I’ll delve into in our next article. Stay tuned.
