This is a discussion with Luke Schneider, the former CTO of Zipcar, on the future of transportation, and how IoT will be playing into that universe.
Sramana Mitra: Let’s start with some introduction about Silvercar as well as yourself.
Luke Schneider: I’m the CEO of Silvercar. Silvercar is about three years old now. We were founded in 2012 with a pretty straightforward mission. The mission statement was to change the way the world hits the road. We are, in the way customers experience us, an airport car rental company. We are not traditional or conventional in any way in that the concept was born of one too many frustrations at the airline car rental counter. You just never seem to know what you’re going to get. There are very long lines and inconsistencies in the process. There are redundancies and a constant upsell of everything from GPS devices to different kinds of cars.
We approached this with the idea of what if you took a page from the book of some of the best and the brightest groups in travel, namely the likes of W Hotels and Virgin America, and dramatically simplified it to provide a consistent, connected, and ultimately, more enjoyable experience for customers. The car rental industry really hasn’t innovated in 40 years in any kind of serious way. About 97% of the on-airport car rental market is controlled by three companies in various brands. As a result, it has become a race to the bottom. It’s a very commoditized product and not a lot of differentiation other than the sign that’s out front.
So what we said was, “We’ll start with something simple. We’ll start with a single make and model of a car.” We’ve kind of taken the Southwest Airlines model where they fly a single kind of plane—737—and have applied it to car rental. We chose a Silver Audi A4 for a number of reasons but primarily because it cost us about 87% of all of the potential rental categories. It’s a premium car and it’s a challenger brand. We’ve viewed ourselves as a challenger brand from the beginning. You always know what you’re going to get. There are not surprises. You’re never disappointed because there’s only a single car that you’d get.
The second piece was, “Let’s get people the tools they need as modern business travelers.” Each car is outfitted with a Wi-Fi hotspot, Sirius XM satellite radio, and the in-dash navigation is the multimedia interface inside the car. You use Google Earth and a host of services that come with an Audi Connect purchase. The next piece was to link this all together over a mobile device. We designed the mobile experience first. We don’t have counters so we have no place where you can go and make a reservation in any airport. It all happens virtually. You can use the Silvercar app or you can use the web to sign up and make a reservation. Basically from that point on, your mobile phone is your key. It’s your instruction manual. It’s everything else you need.
When you actually arrive at the airport, you use your phone to let the concierge know that you’ve arrived. They’ll pick you up and depending upon the arrangement at the airport, literally all you need to do is scan the car with your phone and our in-vehicle technology validates your reservation with the cloud. The car unlocks and then in you go. Your phone pairs with the car. From that point on, you’re out of there. There are no gates. There are no guys in a shack trying to check your paperwork. There’s no way to sell you a GPS unit or some other service. You’re on your own.