San Francisco-based Outdoorsy, which bills itself as an “Airbnb for RVs” matching would-be renters to consumers willing to rent out their personal RVs, is off to a successful start, co-founder and CEO Jeff Cavins told RVBUSINESS.com.
In fact, internal projections for 2017 have the company processing 75,000 rental transactions for 249,000 total rental days for its 5,000 clients — which grows by 500 every month.
“It’s been growing very fast, faster than we really thought,” Cavins said.
The work done for Outdoorsy also led Cavins to last year launch another RV rental-related business called Wheelbase, which offers RV rental operators a Web-based fleet management software program as well as insurance and roadside assistance, in partnership with national underwriter W.R. Berkley Corp. and CoachNet.
Cavins, an entrepreneur who has founded several companies during his professional career, recently took time to discuss Wheelbase with RVBUSINESS.com. The following is an edited version of that interview.
RVB: So tell us about Wheelbase, which, as we understand it, is a software program designed for RV rental operations.
Cavins: We were traveling around the country quite a bit, meeting with the existing operators of RV rental agencies — of which there are quite a lot of them — and as we were meeting with them we started to see that many were running their business on clipboards, and forms, and a lot of paperwork, and very expensive insurance, and clunky software, so our developers sat down, and we started to go to work on building Wheelbase.
It’s evolved quite a bit, so that it’s highly tailored to the recreational vehicle rental operator. We had to learn a lot about what was important to an RV dealer; for example, how to price per mileage based on tiers because when more mileage is accumulated on a vehicle it drives the appreciation, and the value of the vehicle.
RVB: And Wheelbase also includes an insurance component, correct?
Cavins: As we were meeting with these 2,500 rental operators across the U.S., we found that most of them had very expensive commercial insurance — if they were lucky enough to get commercial insurance. Their insurance costs were killing them.
So we worked with a big national underwriter, W.R. Berkley — they’re a billion-dollar commercial insurance company so they insure Boeing and General Electric — on building insurance where the rental dealer didn’t have to pay a monthly premium. We’ve eliminated the monthly premium. The only time they pay for insurance is when the vehicle is on the road. When it’s not making money, they’re not making a payment.
We built the insurance into Wheelbase software so it’s one-click insurance. It’s all software; there’s no paperwork, there’s no forms to fill out. And when you click on insurance, our software connects to over 50 state departments of motor vehicle databases, and within 15 seconds it pulls the entire driving history on the renter.
The other thing about our insurance is we negotiated with our underwriter and said, ‘Look, when a rental operator does more business, they shouldn’t be penalized, they should be rewarded. Their insurance rate should go down.’ So with ours, the more business you do, the lower your insurance costs are, therefore the more margin you get. So it incentivizes the operators to actually scale up and do more business because their costs actually go down with volume.
RVB: All of which, you were saying, led to a roadside assistance benefit with CoachNet.
Cavins: What happened was it increased their margins, so now these guys were able to put some money in their pockets and run profitable businesses. The other thing we saw was, rental operators were telling us, that they were having to do all their own service calls when a renter was out on the road and they had let’s say a tire blow out, or they had a battery that was dead, or they locked themselves out of the RV.
So we decided to build a rental-based version of AAA. We worked with CoachNet and formed a rental program where you can add roadside assistance.
Our software integrates with CoachNet’s database. So the renter rents the RV, and they say ‘Yes, I’ll take the CoachNet.’ They push a button in the software and the CoachNet database immediately recognizes them as a CoachNet member, but they may only need to be a member for six days while they’re on their trip. So it’s one-click roadside assistance.
RVB: You’ve mentioned that Wheelbase is a web-based software. What exactly does that mean?
Cavins: We started working on Wheelbase in 2015. We introduced the first version of it in May of 2016, and since then we’ve done over 200 releases of the product and, because it’s web-based, the operator never knows. It’s like Google, which is constantly updating on the backend but you don’t know that because every time you log in you just automatically see the new version. We typically do between 15 and 20 releases every month. New features, new updates, new things you can do; we’re constantly evolving it.
RVB: And how does this benefit the rental operator?
Cavins: Because our software is web-based, you can have multiple locations because all the locations share a common calendar and all the locations share information on the rental fleet, so you can do reservations and fleet repositioning across all locations.
It’s just like Hertz or Avis. But whereas Hertz or Avis spends hundreds of thousands of dollars for that software; we made ours free. We give you the software, and we give you the insurance, and we give you the roadside assistance. You only pay for anything when the vehicle is on the road making money for you.
We’ve eliminated all the expenses of the tools that would normally hold these guys back financially, and so that enabled them to make more money. It’s enabled rental operators to open up more locations now. Virtually every rental operator we talk to is opening up multiple locations this year, and they’re adding to their fleets.
RVB: Lastly, Outdoorsy and Wheelbase are both fairly new, but is it fair to ask whether you see yourselves as shaking up the industry?
Cavins: That’s a good question. I think what we’re trying to do is we’re trying to unlock all of that consumer demand for RV rentals.
If you think about it, if this is roughly an $18 billion industry every year, and you’ve got 25 million consumers who want to rent an RV. We thought ‘Why don’t we just help people have easier access to renting an RV and enjoying an outdoor experiences, and automate the whole process and insure everybody on the back end?’
We could just do that really simple thing, and make it really simple and safe for consumers.
Safety is paramount, because the last thing you want is an uninsured vehicle on the road. First of all, that’s against the law. But the other thing is, you’re on your vacation and something goes wrong and your entire vacation is ruined because you’re trying to track down a AAA guy, or hire a repair guy to come fix your broken vehicle.
And, the more we thought about it, there’s roughly 13.5 million registered RVs in the United States that on average sit idle for 355 days a year. The average consumer, after about three years of ownership, rarely use their RV. So we said, ‘Let’s help them make money and they’ll build a business.’