Drivers cruising down La Cienega Boulevard might do a double take when they spot a billboard featuring a man with a suspicious-looking bulge in his pocket. It’s only with the help of the tagline, “A car in your pocket,” that this saucy advertisement begins to make sense as part of the newest marketing campaign for startup Skurt.
An app that delivers rental cars on demand to licensed drivers 21 years and older, Skurt launched its service in Los Angeles in October, quickly expanded to Orange County, and last week launched in San Diego. The Culver City company’s ranks have grown to 50 full-time employees, according to its co-founders, Josh Mangel and Harry Hurst.
The pair said they got the idea for the business while trying to solve a problem for themselves.
“If we wanted to rent a car, we’d have to pay a crazy underage fee as we were considered a high risk,” said Mangel, 23.
So he and Hurst, 27, set out to create a company where drivers as young as 21 could rent a car without paying the surcharges some national companies require and be spared the inconvenience of visiting a rental office.
The answer came in the form of an on-demand system where drivers scan their license through their phone’s camera, punch in the type of car desired, and indicate the time and place they’d like the car to be delivered.
The startup received $1.3 million in seed funding through Santa Monica’s Upfront Ventures and Winklevoss Ventures late last year. Skurt is looking to grow the company with a hiring spree and service expansion, but Mangel and Hurst won’t disclose current financials.
Skurting issue
Skurt users download its app, select the type of car wanted from a menu of classifications that includes “Utility,” “Plus,” “Large,” or “Solid,” and designate a delivery time and location. From convertible Mustangs to Priuses, flatbed trucks and 15-person passenger vans, vehicles can be reserved with a minimum of two-hour advance notice.
Costs range from about $21 a day for the most basic vehicle to more than $100 for larger or luxury options. The charge can be paid with a debit card and not just a credit card as required by many car rental companies.
Skurt doesn’t own its own cars but rather assembles its fleet through agreements with rental car agencies, “monetizing excess inventory” by putting cars to use that would otherwise be sitting on the lot, Hurst said.
The co-founders declined to comment on the specifics of how Skurt is paid, but trade publication Auto Rental News reported in July that upon receiving a reservation, Skurt sends a driver’s request to multiple car rental companies that may either accept or refuse it. Once a request is accepted, a Skurt employee picks the vehicle up from the rental company and delivers it to the app user.
Hurst said he built relationships with rental companies by going door to door pitching the idea.
“Getting people to buy into your concept when it’s just a concept and unproven … is the most difficult thing,” he said.
Now, Skurt has grown from contracting with mom-and-pop agencies to also dealing with national rental chains and car dealerships, according to Hurst.
“Our fleet size has grown significantly,” he said.
Skurt customers have the option of purchasing insurance through the app or using their own. Through the app, liability insurance costs $24 a day and a damage waiver can vary in price, typically running around $20 to $30. Company officials would not say how many customers had signed up for the coverage nor would they say how many people had used the service.
Customers are typically between the ages of 21 and 30, Mangel said, and use the service not as a typical rental but as a substitute for owning a car.
In addition to using Skurt for long-term needs such as taking a road trip or replacing a car that’s in the shop, many customers use Skurt for everyday chores, such as going to the grocery store or moving, according to Everette Taylor, 27, the firm’s vice president of marketing. He called Skurt a cost-effective alternative to car ownership in an environment where most vehicles sit parked more than 90 percent of the time.
“We want to be a utilitarian tool,” said Taylor. “We don’t want to be seen as a rental car company because we’re not a rental car company.”
Crowded market
In the ever-growing industry of transportation apps, Skurt joins a concentrated marketplace, from short-term rideshares Uber and Lyft to car rental apps such as Zipcar, which actively markets itself to a college crowd. Getaround, a San Francisco-based startup that enables drivers to rent out their own cars when they’re not using them, had raised more than $40 million in funding as of September and plans to enter the L.A. market.
Even mainstream rental companies, such as national chain Hertz Corp., have been updating their services to include less paperwork and more online access. Hertz launched its own app in 2010 and has a rewards program that lets drivers skip the rental counter and head straight to their car from the airport. Enterprise Rent-A-Car has long delivered rental cars to a customer and has even launched a “car sharing” program that provides hourly rentals.
“Every month we see a new variation on (the theme of) alternative personal mobility options,” said Neil Abrams, president of New York-based Abrams Consulting Group Inc., which advises auto rental, travel service, and transportation-related companies. “It’s basically taking existing models and looking for some variation and targeting an underserved market.”
Abrams said Skurt is really more of a rental broker, sidestepping the need to own its fleet by invoking a model similar to Uber, in that the rideshare company is fundamentally a tech business that brokers deals between drivers and passengers.
“Skurt brokers transactions between rental companies and renters,” said Abrams.
This means Skurt relies on outside agencies to fill inventory needs, a heavy lift for a company based in Southern California, one of the country’s largest car rental market, said Abrams.
“They have to prove to their rental suppliers that they’re safe, they can protect their assets, and they vet their renters,” said Abrams.
