When entrepreneur Chris King walked into Uber’s Sydney office in July last year with an idea, the $US62 billion startup giant was unsurprisingly skeptical.
King, an avid Uber user, had spotted a gap in the market and had an idea to fill it.
He found that a huge amount of people wanting to become on-demand drivers for deliveries or ride-sharing can’t because their car is not up to par or they don’t own one at all and wanted to create a car rental platform for these drivers.
“That was a really good opportunity for those other individuals who couldn’t get finance or didn’t have the funds to buy a car,” King tells StartupSmart.
“It was the ability to provide an employment opportunity in rolling out these cars to small business owners.”
But Uber wasn’t enthused with the concept initially.
“I just walked into their partner centre which was back in July and just said, ‘we want to speak with someone’,” King says.
“They actually didn’t think it was going to work.”
Three months later, after the completion of a trial program, Uber was a director partner in King’s new business, Splend.
“They could see the model was workable and that we were doing an okay job,” he says.
Splend is an online platform offering car rental for Uber drivers.
When drivers sign up to Splend they also receive personalised support to help optimise their new income-on-demand lifestyles.
“Splend drivers get account managers who help them become successful on the app,” King says.
Drivers get tips and tricks to maximise their revenue, have a monthly catch-up with their account manager and are incentivised for safe driving.
“Our technology measures this and we also measure how satisfied the drivers are,” he says.
“It’s that support, coaching and mentoring that makes them more successful.”
In September last year Splend had about 50 cars being hired out on a weekly basis.
Now, that number is 550.
“That’s growing at about 50 to 75 per week,” King says.
And now Splend is adding an additional 1500 cars to its fleet, owned by the startup through specialist vehicle funders.
Splend operates under a subscription model enabling drivers to hire out a car for a weekly fee with no lock-in contract.
In addition to a $275 joining fee, which covers admin costs and police checks, Splend rental cars start at $249 per week for a Volkswagen Golf.
There’s also a luxury option for drivers who have been with Splend for more than three months and have an UberX driver rating above 4.75.
But the middle option, the SUV at $269 per week, accounts for about 90% of the company’s subscriptions, King says.
Going global from home
Splend was created in King’s kitchen with a few hundred thousand dollars off his own back and a housemate’s help.
Since rolling out its cars in July last year, Splend has generated more than $5 million in revenue and King believes this number will double in time for its first birthday.
Being one of the first rental car companies targeting the on-demand driver market in an uncertain regulatory space, Splend has had the benefit of first mover advantage.
“We’re probably a couple of years in front of everyone, we were able to figure out everything in a quieter environment,” King says.
With a vision to go global, Splend now operates across Australia with King planning to take it to New Zealand towards the end of 2016 and commencing discussions for expansion into North and South America.
Splend has also won a spot in Ernest and Young’s Accelerating Entrepreneurs program which gives 16 high-potential, fast-growth startups across the Asia Pacific support to take their technologies global.
“That’s a pretty exciting opportunity for next year,” King says.
In line with this, King has made some key hires to bolster Splend’s core power, including GoGet’s former chief financial officer Craig Marshall.
“When he accepted the job back in January, we only had 200 cars – he is one of the greatest recruits we’ve got,” King says.
“It gives us the financial firepower to really grow.”
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