You just landed in a new city and need a car to get around. Yes, there are Ubers, cabs and car rental companies. But, gone are the days when you need to rely on others to get you places. To make sure you never go ride-less, Bora Hamamcıoğlu founded CarHopper.
Launched in April 2016, CarHopper can be seen as a mix of Expedia and Toro (a peer to peer car rental platform). Via a mobile app, it lets you browse through a detailed profile of high end cars in their database to rent during your stay in Florida and Los Angeles. There is no surprise (stressful) element here. You pay for what you get upfront.
Bora Hamamcıoğlu is originally from Turkey and attended Bentley University, where he graduated from in 2011 with a degree in Management. Post-graduation, he decided to move back home to Turkey and work in consulting in the family business. A couple years later, he revisited studies in the US while pursuing a Master’s in Real Estate and Finance at Georgetown University.
As the subject of his Master’s thesis, Bora explored the realm of Miami and quickly grew a passion for its real estate and international investments. “I thought of what else I could do with international visitors flying into Miami and needing things to do. So I thought, Oh! car rentals, why not?”
When you think about it, the idea makes total sense. With a booming nightlife, conventions and art shows, Miami is one of the most visited cities that brings a constant need for transportation. Around this time, coincidentally, his friend moved to Miami and wanted to start a peer to peer boat sharing platform, basically an Airbnb for boats. He was looking for investors and Bora came on board. However, with a love for the shared economy phenomenon and a curiosity towards starting something with higher volume and less seasonality, Bora decided to create an Airbnb for cars instead. “I noticed that there are two companies doing this but no one was dominating the market. I saw an opportunity in that.”
The Business of Rentals
CarHopper officially launched via Miami Herald in October 2015 and the iPhone app was introduced in February 2016. Today, their database has over 200 cars available for rent in Florida. The business model is based on people’s need to rent a car for a duration of two days or more. The demographic, as Bora mentions, is someone who is an auto fanatic. While Uber provides you with a transportation solution, CarHopper gives you a driving experience by renting cars like Lamborghinis and McLarens. Two different aspects but with the customer in mind always.
Since we knew nothing about the car rental space, we asked Bora to shed some light. “Through analysis, I realized that 90% of the people listing their cars had more than 5 cars listed on their accounts. I started calling these customers, setting up interviews and meetings with them and noticed that these were mom and pop car rental companies that are based near the airport and are trying to compete with Avis, Budget, Hertz, Enterprise, etc. But, their own website is very old school, so this is where they wanted marketing exposure. And I noticed that these people had the highest ratings and the fastest response rate versus other users because their cars were always available.”
“The greatest accomplishment was first round of raising capital and the greatest downfall was getting out there.”
Bora also saw that individual car owners either decline rental requests or cancel last minute, thus, have poor ratings. This is due to the lister’s backing out of their offers last minute. Thinking this would represent CarHopper in a bad light and portray the platform as unreliable, he decided to shift the focus to become a booking platform for the mom and pop car companies. By giving them exposure, CarHopper allows them to compete with the larger brands and let them use the platform in a way the big players use Expedia. By March 2016, Bora pivoted the business model and raised $500,000 in funding through angel investors.
The biggest challenge for Bora was getting insurance. After days of Googling peer to peer insurance companies, making 300-400 phone calls and stalking 5 to 6 brokers on a daily basis, Bora finally settled on an insurance policy after six months in September 2015. Other challenges, as he recalls were, “understanding where the product fits in the market and modeling the business to the user’s needs.”
From a personal view, Bora says that knowing how to work with technology took some time. Long hours of Youtube videos, several Reddit articles, Growth Hackers newsletters and meetups later, Bora taught himself the language of technology. “When you start a business, you need to learn a new skill every 6 months so you can stay ahead of yourself.”
Reflecting back on how quickly the company has grown, Bora says “the total value of the inventory is worth $10 million.” This is calculated by the value of each car and no car is accounted for more than once. You can see this through the high end inventory they show on their app, which will soon be available in Boston as well.
Visiting Miami, Orlando, Fort Lauderdale or Los Angeles in the coming weeks? Get your ride on while looking fly with CarHopper. Download the app here and use promo code: RADICHE50 for $50 off your next rental. Offer valid till January 1, 2017.
Photo courtesy of CarHopper.