Despite growing pains, peer to peer car sharing is hot for investors

Peer to peer car sharing is hot for investors, recently drawing interest from the funds of Eric Schmidt, Ashton Kutcher and Marissa Mayer, as well as Google, GM and Zipcar. But the sector is still emerging and has a lot of growing pains to go through.

What do Yahoo CEO Marissa Mayer, celebrity Ashton Kutcher and former Google CEO Eric Schmidt all have in common? Their funds have all put money into a round for a startup called Getaround, which enables users to share their personal cars with other users.

The emerging sector is called a variety of things like peer to peer car sharing, car sharing 2.o, or neighborhood car sharing, and there’s a half dozen companies who have emerged to try to develop businesses based on this idea. Despite that the market is so new, and the hurdles are somewhat high, many of the companies in this sector have very high profile investors.

Relay Rides, another of these companies, raised money from the venture arms of Google and auto giant GM, as well as August Capital. Wheelz, another competitor, has raised money from traditional car sharing company Zipcar. Clearly forward-focused investors are intrigued with the idea, but is there a solid business model here? If so, it still needs to be worked out.

The business model needs to provide a cut for the car owner, for the insurance, for the initial tech installation or device, and for the cost to acquire users. I go more into the economics of peer to peer car sharing in this GigaOM Pro report (subscription required). Zipcar’s CEO Scott Griffith told me recently he thought peer to peer car sharing is a particularly hard business because of the revenue sharing with the car owner.

The industry hasn’t been without its growing pains. Relay Rides has pivoted a bit, and no longer installs its own in-car connected systems in the vehicles in its network. The company’s original model was to have its staff install the connected devices in the vehicles, which took money and time. Now Relay Rides is relying on its partnership with GM, and Onstar, to supply the vehicle connectivity and control system. And yes, the GM deal was a big win for the firm.

RelayRides also experimented with whether or not it should offer gas cards, and how to cover the cost of gas for very short trips. It’s not necessarily obvious how to set up a system like this, as the only precursor is traditional car sharing like Zipcar, where the company owns the cars and is responsible for their upkeep and gas bills. Both Relay Rides and Getaround have invested in substantial marketing, at least in San Francisco, one of their test markets.

Getaround sells connected kits for cars, which is a less capital intensive way of having the connected device system installed in the cars. But when I’ve talked to some potential investors, and yes competitors, they wonder how secure these systems are.

Safety and security are huge issues for this emerging industry. A company called HiGear, which created a business like this based on luxury cars, was the target of thieves and had to shut down. A startup called Spride Share, developed by investor Sunil Paul, never launched because of the concerns over insurance and the business model. Questions also remain about liability and insurance, which Relay Rides faced in a recent tragic event.

Peer to peer car sharing is an inspiring idea, and one that uses cars more efficiently, which is why some of these top notch investors have supported these startups. But the business models for these companies still needs to be worked out.

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Review: 'The Producers' still zings despite flubs at the Bowl

Jesse Tyler Ferguson as Leo Bloom, Richard Kind as Max Bialystock and Dane Cook as Franz Liebkind in the musical "The Producers" at the Hollywood Bowl. (Lawrence K. Ho / Los Angeles Times / July 29, 2012)

"The Producers" returned to Los Angeles for three performances this past weekend at the Hollywood Bowl. And during the curtain call at Friday's opening, Mel Brooks, who wrote the giddy score and co-wrote the zany book with Thomas Meehan, came onstage to express his gratitude to the audience and to compliment the cast for pulling it together in a short period of time.

"They're almost good," he kidded, which pretty much sums up my appraisal of the production, directed and choreographed by Susan Stroman, whose two Tony wins added to the show's record-breaking haul of 12.

The rushed logistics of producing a big musical at the Bowl didn't allow Stroman to live up to her perfectionist reputation. Microphones were erratic, lines were flubbed, a door refused to open, costume changes hit roadblocks. At one point, after a longish delay, Richard Kind, who played Max Bialystock in a performance that was a good deal better than "almost good," returned to the stage with the excuse that is eminently forgivable in L.A.: "Traffic."

But even with these snags, "The Producers" demonstrated its extraordinary tickling power. The show, which bridges the distance between Broadway and the Catskills, is awash in jokes that make you either want to laugh or groan. (I'll confess that the older I get, the funnier they seem.)

Brooks isn't vying for membership in the Rodgers & Hammerstein club, but the songs he wrote for "The Producers" have undeniable pep and ingenuity, especially when the Hollywood Bowl Orchestra, under the musical direction of conductor Kevin Stites, is going full bore. Yes, the show is a bit overstretched even with the cuts that were somewhat awkwardly made near the end of the show to ensure that the Bowl's curfew would be met. But who can complain when grinning?

The musical, to my surprise, has taken on a surprising relevance. Seeing "The Producers" for the first time since the financial crisis threw the country into recession, I couldn't help marveling at just how incisively the show, in zingy parable form, foreshadowed the greed-induced catastrophe we're digging ourselves out of.

The plot, after all, involves a scheme hatched by Max and his wimpy new bookkeeper, Leo Bloom (Jesse Tyler Ferguson) to make a killing off of a Broadway flop. All it takes is a little "creative accounting" of the kind Wall Street has relied on to enrich itself while everyone else goes bust. "The Producers," I suspect, will one day be used as a teaching tool by economic historians to explain the Great Recession.

In the meantime, the shtick is more or less foolproof. Alumni from the original Broadway cast, including Roger Bart's fiercely flamboyant Carmen Ghia and Gary Beach's spotlight-hogging director Roger De Bris, were on hand to keep the comic level high. (Bart might have set the record for the longest sibilant "s" in his mincingly hilarious portrayal of De Bris' live-in "assistant," and Beach reminded us why he nabbed a Tony for his performance.)

Kind, who brought to mind Zero Mostel from the original 1968 film more than Nathan Lane from the more recent stage and screen musical versions, should be given a chance to reprise his refreshingly unhammy Max, although the spotty attendance at the Bowl on Friday suggested that it might be too soon for a major revival.

Kind allowed the comedy to emerge directly from the character, something Ferguson wasn't quite able to manage in his rather self-conscious performance as Leo. At times, it seemed like Ferguson had been given last-minute notes on how to punch up the humor, and it was really only when he was singing that he relaxed enough to let his natural talent flow.

Stand-up comedian Dane Cook brought Franz Liebkind to life with fierce conviction. Playing the playwright whose "Springtime for Hitler" is the guaranteed-to-close property Max has been searching for, Cook earned his laughs strictly through his characterization, and he delivered his big musical number as though he had been fated to play a prancing cartoon Hitler.

The chorus number of old ladies with walkers (Max's harem of geriatric investors) never fails to slay me. So out of gratitude I'll refrain from mentioning Rebecca Romijn's wobbly Swedish accent and even wobblier singing voice and just say that she fetchingly fleshed out the bombshell contours of a character whose endless name begins with Ulla and ends somewhere north of Stockholm.

That gag, like most of the routines in "The Producers," is as old as it is irresistible, so how about we save our groaning for the evening news and just appreciate the mirth.

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