RelayRides Hits The Ground In San Francisco, With Money From Google Ventures and August Capital

12/14/10Follow @xconomy

Roughly six months ago, a new alternative to car ownership came to the Cambridge area. RelayRides took the idea of car-sharing service Zipcar a bit further; rather than renting out cars from its own managed fleet, it set up a system for borrowing cars from individual car owners whose vehicles were dormant during the day.

The company gained some traction since its pilot launch in Cambridge, and now boasts a fleet of 50 cars and a community of about 1,000 borrowers. It’s also working to expand beyond Cambridge to Boston’s Jamaica Plain neighborhood. And now, some big-name investors have bought into the idea that car owners can help people with short-term transportation needs while earning something in the process. Today, the company is announcing its service’s launch in San Francisco, thanks to funding from August Capital and Google Ventures. August’s Howard Hartenbaum and Google’s Joe Kraus will join the RelayRides board as a result of the deal.

“We’re really excited about providing an alternative to car sharing to more people,” says CEO Shelby Clark. “This financing allows us to do that.”

RelayRides is also moving its headquarters to San Francisco. It joins the ranks of other Boston-area startups to head west, like e-mail reminder service Baydin, Web-based children’s clothing swap platform thredUP, and errand-running service TaskRabbit.

Last year RelayRides was working out of Polaris’ Dogpatch Labs in Cambridge, but this past summer it made it through the accelerator phase of MassChallenge, in Boston’s seaport district. It was one of the 16 winning teams for the inaugural edition of the startup competition, taking home a $50,000 check in October.

In addition to offering car owners a way to make money while not using their automobiles, the company says its service operates at lower cost, and puts cars closer to borrowers’ homes than Zipcar, which typically keeps its vehicles in more commercial areas. RelayRides also boasts of being an eco-friendly option for drivers, in that it doesn’t unnecessarily put new wheels on the road, but makes use of what’s out there. “San Francisco is very environmentally friendly and car sharing is very broadly accepted there,” says Clark of its new digs.

As far as his company’s backers go, Clark says he is excited about Menlo Park, CA-based August’s “experience in building household names.” You might recognize some of the firm’s investments: Microsoft, Evite, Skype, Compaq Computer, StumbleUpon, and Shopping.com.

Google Ventures is a bit newer to the investing game. Google started the fund two years ago, but only publicly revealed its first set of portfolio companies this past spring. It’s backing companies in spaces such as biotech, automobiles, the consumer Internet, mobile apps, and gaming.

Neither firm has done much in the car-sharing market specifically, but Clark says they’ll add perspective in how to use technology for collaborative consumption—”a broad shift in consumer behavior where people are beginning to reject traditional forms of ownership in favor of access to business services,” he says. “Technology makes it easier and more convenient to share.”

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