SoftBank is betting that everyone hates rental-car companies

SoftBank is coming for rental car companies.
SoftBank is coming for rental car companies.
Image: Reuters/Arnd Wiegmann
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Super-investor SoftBank is getting into the fight against America’s traditional rental-car companies.

Peer-to-peer rental car app Getaround has raised $300 million in a round led by SoftBank, it said today. That brings its total funding to nearly $400 million, at an undisclosed valuation.

Getaround is one of two main startups, along with Turo, working to make car “sharing” a popular alternative to owning a car or doing business with traditional rental-car firms. Getaround lets users find and unlock cars provided by their regular owners via an app, with rentals starting at $5 an hour.

Getaround previously raised money from investors including Toyota, and has a deal with Uber to let Uber users find and rent a Getaround vehicle through the Uber app. For its part, Turo has raised $216 million to date.

SoftBank is already the king of ride-hailing. It has invested in Uber, India’s Ola, Singapore’s Grab, China’s Didi Chuxing, and Brazil’s 99 (which was later acquired by Didi). Getaround founder and CEO Sam Zaid has said he believes car-sharing can complement ride-hailing to meet “most of a person’s transportation needs.”

SoftBank seems to agree. The Japanese tech giant is getting in as US consumers sour on traditional rental cars. In May, consulting firm AlixPartners surveyed around 2,000 consumers who had rented a vehicle in the past 12 months. It found that 35% agreed that renting a car was a “laborious process,” while 34% felt add-on charges were too high. One in 10 wanted to rent directly from an app.

More damningly, AlixPartners found that 35% of traditional car-rental customers had used a ride-hailing service in place of car rental in the past 12 months and of those, a fifth had replaced more than half their trips. Millennials and Gen Z are particularly keen on switching from rentals to ride-hailing.

Receipt-based data from expenses firm Certify have shown that business travelers are already giving up rental cars for ride-hailing. Leisure customers, however, are a much bigger market: about two-thirds of US car-rental consumers, according to AlixPartners.

It should be especially troubling to firms like Hertz and Enterprise, then, that vacation-goers are starting to ditch rental cars for services like Uber and Lyft, while app-based alternatives to traditional rentals bulk up with fresh funds from high-profile backers.