SoftBank has invested in everything from self-driving cars to ride hailing. Now, Softbank Group is leading a $300 million investment in peer-to-peer car-sharing platform Getaround.
For SoftBank the investment represents a new angle on mobility. So far the company has invested in a whole slate of future-focused transportation companies, including DoorDash, Uber, and self-driving-focused startups such as General Motors’ Cruise division. But Getaround marks the first time the company has invested in a peer-to-peer sharing startup.
Michael Ronen, managing partner at Softbank’s Vision Fund, says Getaround is consistent with other investments the fund has made in the mobility space. “At a macro level, we believe the next generations ahead of us are going to view car ownership as less of a central part of their lives,” he says. What that means is not only sharing taxis and rental cars, it also means sharing a personal vehicle when it’s not in use.
Getaround is in 66 cities so far. What is most compelling about the company, according to Ronen, is the hardware system it built to allow people to rent out their cars without having to personally hand over their keys. Getaround also has partnerships with Toyota, Mercedes-Benz, and Uber.
“It’s not a coincidence that Uber has a partnership with Getaround and that we’re investing,” says Ronen. He says Uber helped the fund evaluate the investment in Getaround. He also sees a big opportunity in the partnership between the two. Getaround already connects Uber drivers with cars on its platform. But Uber has also agreed to offer Getaround cars to riders on its platform. Ronen says many people don’t want to use Uber to do their weekly shopping, for example, wherein they might need to lug purchases to and from multiple locations.
“If they can actually pick up a car for three hours though the Uber app and get what they need and come back, that’s an incredibly compelling solution for them,” he says.
Car sharing among individuals has had a slow start. Getaround has been operating since 2011, but it’s only been in the last couple of years that the car industry has started to validate the idea that sharing a personal vehicle is going to be common practice in the future. Most car companies that have invested in shared mobility have done so through Zipcar-esque platforms wherein a central operator rents out a fleet of shared vehicles.
When peer-to-peer car sharing first emerged, there were big questions. Some were skeptical that people would really want to loan out their cars for cash. Others worried about liability: Insurance companies weren’t keen to cover the costs of a car accident that happened while that car was on loan. This led to lawsuits and, in New York, an unofficial banning of peer-to-peer car sharing. Over the years, Getaround and competitor Turo have worked to make sure that both car owners and renters are covered in the event of an accident in the places where they operate. This kind of ground work has laid the foundation for more competitors to emerge.
In 2016, Daimler launched its own car-sharing platform, called Croove, in Germany. A year later, it sold that property to Turo and made a strategic investment in the company. At the time, Jörg Lamparter, head of Daimler Mobility Services, acknowledged to Fast Company that peer-to-peer car sharing would be a key component of future mobility services, but that his company would rather invest in an established player than scale its own service.
Still, others have since launched. In July, General Motors announced a peer-to-peer car-sharing service through its Maven brand, allowing Chevrolet owners with newer cars to loan out their vehicles.
Getaround says the money from SoftBank and others will fuel growth into new regions and initiatives. In particular, Getaround CEO Sam Zaid is interested in developing Getaround outside of major urban hubs. He also thinks there is opportunity to make the platform more interesting for car owners.
“There’s still a lot of friction in owning a car,” says Zaid. “You have to pay insurance, you have parking, you have cleaning, you have maintenance.” He says he’s interested in establishing partnerships with other companies that will help make the car owner experience on Getaround more robust. “So that when they share their car, their life actually gets easier,” he says.
This recent investment and Getaround’s push to scale may draw the attention of others in the space. Both carmakers and technology companies focused on the future of transportation are increasingly buying up smaller startups to build out their mobility offerings. Zaid is noncommittal about whether Getaround would go public. “We’re certainly open to whatever makes sense for our business as long as it aligns with our vision,” he says, adding that the company isn’t currently seeking an acquisition.