An original Uber competitor looking to build a new rideshare model

Logo for the Getaround peer-to-peer car sharing service on the side of a car in the city of Mountain View, Silicon Valley, California on August 24, 2016.

Smith / Gado Collection | Photo archive | Getty Images

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After a decade during which very low interest rates and abundant market liquidity have grown Above Other lyft in start-up giants and eventual IPOs, the rideshare model is under a lot of stress.

Even with consumers bouncing back and ramping up numbers from pandemic lows, the shares of both companies are. tanking after their latest earningsand from wage inflation to unionization and gas prices, the current economy is not the one that favors their business models.

In many respects, Uber and Lyft today are much more like large corporations than a reflection of any original local community definition of “rideshare,” but one thing remains true: Consumers want alternatives to owning a car and traditional ones. public transport options. Nearly 36% of U.S. adults say they’ve used a ride-sharing app like Lyft and Uber at some point, according to Pew Research.

If anything, pressure on major rideshare companies could leave room for additional models to support their cause. Getaround is one example. Founded in 2009 and, together with Uber, an original CNBC Disruptor on the inaugural 2013 list, its mission has remained to distance the company from every licensed driver in the world who has a car – just get close to the cars parked throughout the way and tap an unlock button on your phone.

The IPO market may not be receptive right now, but its executive team and investors are betting the concept will continue to grow.

“What’s happening in transportation is a kind of slow shift from ownership to access, and that’s gaining momentum over time,” said Elliot Kroo, CTO and co-founder of Getaround. “More and more people are looking for alternative transportation options, realizing that car ownership is very expensive.”

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The pandemic and related global supply chain problems, as well as solid consumer demand, have led to sharp increases in the prices of new and used cars. Kroo said that as more and more people use car sharing services like Uber and Lyft, more and more people are also considering getting rid of their cars.

Getaround was not immune from the pandemic. Kroo said that from freezing to lifting restrictions it has gone through a tough time with significant peaks and valleys in usage over the past two years.

“If you think about your options when Covid first struck, you won’t feel so comfortable sitting in your car with other people, riding the rideshare or on public transport. Your options if you didn’t have a car were really limited. But if there was a car you could walk to, you didn’t have to meet the person. That was one of the best transportation options available that was a little Covid friendly. “

Even like Uber tanked on Wednesday, recorded 1.71 billion trips on the platform during the quarter, up 18% from the same quarter a year ago. And Kroo says Getaround is returning faster and bigger than it was pre-Covid.

While Getaround isn’t as popular as Uber and Lyft right now, it believes the company has an opportunity as it expands to more countries and brings people to join the car sharing movement. In 2019, it spent $ 300 million to acquire Drivy, a car sharing platform in Europe. Since that agreement, its network has grown from 300 cities to over 850 cities in the United States and Europe.

In some respects, its business model is perhaps closer to Airbnb than other gig economy companies.

“If you looked at the company ten, twelve years ago, I think people were mostly worried about even just letting a stranger use their car. And that was how people mostly thought of peer-to-peer car sharing. to-peer at the time. ”

In 2020, he hired a former Airbnb executive, Dan Kim, to lead his North American business and now chief operating officer, and launched programs that sound more like Airbnb than Uber or Lyft, such as his “Power Host” program for auto “Entrepreneurs” share fleets of two or more cars. Kim also had experience with Tesla.

Getaround also partnered with Uber, including a 2017 program that offered instant booking for potential car-less drivers, as well as “Uber Rent powered by Getaround” in April 2018, allowing people to rent and access Getaround cars through the Uber app.

Kroo says in-care technology will help in the ridesharing transition. “If a car already has the technology to connect to the internet, then there is the potential to use that connectivity to make that car instantly shareable on a platform like Getaround.”

Getaround is still a privately held company and has raised significant capital, approximately $ 600 million in funding. His funding, like many start-ups over the past decade, has grown rapidly, from a 2017 C series of $ 45 million to a 2018 D series of $ 300 million, led by Softbank, a deal he took part in. also Toyota.

During the pandemic, it raised $ 140 million (October 2020) with Reid Hoffman’s Reinvent Capital and Mark Pincus among the new investors. At the time, the company said that after an initial large 75% decline in usage due to Covid, it was growing again. It reported reaching 1 billion miles driven by its more than 6 million users globally and a doubling in global revenue at the time of funding.

Getaround has undergone some major changes in management and model over the years. Earlier this year, founder and executive chairman Sam Zaid returned to the role of CEO. This change came less than a year after the company’s former chief operating officer, Karim Bousta, a former executive at Lyft and Tesla, was named CEO (Bousta remains on the board of directors).

The company also pledged in November last year to have only electric vehicles on its platform by 2040. Kroo says the company believes the future of the car-sharing industry will be all electric.

By Alexis Gebhardt, special for CNBC.com

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