Drivana
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Renting a car involves a time-consuming process, high costs, and a lack of transparent pricing, making the experience unpleasant for customers.
The well-established players that dominate the market have been slow to innovate and improve the car renting experience.
Let's dive in.
Imagine this
You are a tourist traveling to a small Mexican town for a short vacation.
As you pick up your bag, you head directly to the rental car kiosks, where a long line awaits.
When you arrive at the counter, you find out that no cars are left.
An hour later and still without a rental car, you ask other passing passengers about alternatives.
They quickly recommend a platform where you can rent cars from local hosts.
Explain it like I'm five
The peer-to-peer car-sharing market was valued at around $2.2 billion dollars globally in 2023 and is expected to reach $6.9 billion dollars by 2030. This growth represents an annual compound growth rate of 17.7% between 2023 and 2030.
In Mexico, several companies are working toward addressing this issue. Beepy, Drivana, and Balety have started offering a car-sharing platform as an alternative to traditional rental companies in Mexico.
Drivana is a peer-to-peer car-sharing marketplace where customers can book vehicles from a community of local hosts.
Users can rent a car on the platform, and the host delivers it to the chosen address and then picks it up where the user leaves it.
Users who sign up have to verify their identity and go through a KYC process.
They encourage people with unused cars to earn an extra income.
North America (US and Canada) holds the largest market share of the peer-to-peer car-sharing market at about 35%, Europe at 25%, Asia at 20%, and Latin America at approximately 10%.
The ABCs
Industries: Transportation, Car Sharing, Rentals
Headquarters: Mexico City
Year Operations Started: 2023
Team Size: 9
Raised: Undisclosed
Investors: Encontrack & Chowdhury
Business Model: Commission based
Background check
What we like:
Cheaper: According to the founders, the daily rental price for a Volkswagen Jetta on Drivana is $948 Mexican pesos. Comparing it with Hertz, which holds the largest market share, their everyday rental price goes up about 183%. Beepy, another competitor offering the same services as Drivana, has it priced 58% higher.
Growth: Since launching in March of last year, the founders claim to have over 10,000 users and a fleet of 500 cars, maintaining an average of 30% of the first customers, showing a growing demand for their product offering.
Convenience: Paperwork at traditional car rentals can sometimes extend to 2 hours to secure a vehicle. Drivana sets itself apart by offering a user-centric solution—providing the option for customers to have their rental car delivered directly to their chosen address or to be picked up.
Costs: Their business model has already been tested in other regions and proves to be more cost-effective compared to owning a complete fleet of cars. Owning a fleet of cars comes with high expenses like car maintenance and insurance. This allows them to offer lower rental rates to their users.
Roadblocks:
Liability: In August 2022, it was reported that Turo and other peer-to-peer car rental companies were found to have been used by criminals for human trafficking. If this problem were to happen to Drivana, it would severely damage its reputation and liability claims.
Experience: The company does not conduct manual inspections of rental cars in their marketplace, which can make it challenging to manage or address issues that customers might encounter with their rented vehicles.
Region: We don’t see this concept working in certain parts of Mexico, such as Monterrey, where the city is not built for walking. People rely on cars to travel from Point A to B. While most individuals who utilize public transportation do so because they do not own a car, those who do own one typically have the means and preference to use it.
Marketplace: Drivana is facing a shortage of cars to match the increasing demand from renters. They need to acquire users rapidly since digital marketplaces rely on volume.
The Architects
Edson Arteaga, Founder & CEO.
Carlos Ramos, Founder & CTO.
Request intro with founders by sending an email to gabriel@readrunway.com
Headlines Corner
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Coba, an American fintech startup simplifying cross-border financial services in LatAm, raised $2.2 million dollars in funding (Coba).
Ezra, an American healthcare AI company, raised $21 million dollars in funding (BusinessWire).
Daedalus, a German startup building precision-manufacturing factories powered by AI, raised $21 million dollars in funding (TechCrunch).
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