Wheelz: Car sharing for campuses

The peer-to-peer car sharing space is getting crowded. On Wednesday a startup called Wheelz launched at Stanford University with the idea to bring student-to-student car sharing to campuses. Wheelz marketing exec Aaron Platshon explained to me that the company is “specifically targeting colleges and universities because there are dense social networks and high levels of trust” there.

Think of the strategy as similar to the way that Facebook was able to create trusted social networks at colleges before it spread elsewhere. And interestingly enough, Facebook early-exec-turned-investor Chamath Palihapitiya was the lead seed investor in the company, and other angel investors include Jim Freer, Sebastien de Halleux, Felicis Ventures and Red Swan Ventures. Wheelz, which has been under development since early 2011, has raised $ 2 million.

Peer-to-peer car sharing is a new model of car sharing where car owners rent out their cars by the minute or hour to other users in the network. Drivers can use mobile apps to unlock the cars and the web to reserve cars in nearby locations. In contrast, traditional car sharing companies like Zipcar and CityCarShare own and maintain the car fleets themselves, which can get pretty expensive. Traditional car sharing companies have struggled to be profitable because of the high cost of car ownership and maintenance.

The concept of P2P car sharing is compelling enough that there’s a handful of startups out there building networks, including Getaround, RelayRides, Spride Share and WhipCar, in the U.K. RelayRides is backed by Google Ventures and August Capital. Getaround has raised money from TechCrunch creator Michael Arrington‘s CrunchFund, Redpoint Ventures, General Catalyst and a group of angel investors including Netflix founder Marc Randolph and WordPress founder Matt Mullenweg (see disclosure). Spride Share is backed by Spring Ventures founder Sunil Paul and has an advisory board that includes LinkedIn founder and chairman Reid Hoffman, Zynga CEO Mark Pincus, UC Berkeley Institute of Transportation Studies director Dan Kammen and City CarShare CEO Rick Hutchinson.

For now, the amount of people actually using these peer-to-peer car sharing networks is so small that there’s room for a bunch of them. It’s likely that they will each grow in certain niches, neighborhoods and cities and perhaps down the road will merge or get bought by the traditional car sharing companies. The technology won’t be the differentiator — a mobile app and an unlocking mechanism can be pretty basic and commoditized. It will be marketing, market focus and business model that determine which of these companies draws in more customers.

That’s one reason why Wheelz is a potential player, despite that it’s entering the market later than the others. Carpooling company Zimrides took the same approach to focus on already-created trust groups at schools and businesses as their core market first and then only later moved to make its service more open to the public. As the security issues with Airbnb have shown, trust will be a major part of the web sharing economy, and companies that understand that early on will benefit.

Disclosure: Automattic, the maker of WordPress.com, is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, the founder of Giga Omni Media, is also a venture partner at True.

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