The love between man and car is as enduring as Jeremy Clarkson is irritating. Those who spend their Sunday mornings lovingly waxing their new Mercedes C‑Class probably wouldn’t be happy trading it in for a VW Golf shared with 20 others. But those who view the car only as a method of transportation might be, especially if it saves thousands of pounds a year.
Streetcar is a beautifully simple idea: a city-based car-sharing service for occasional drivers, set up in 2004 by Brett Akker and Andrew Valentine.
“It’s common sense – the convenience of owning a car without the hassle,” says Valentine.
New members are sent a swipe card, and the cars – in hundreds of locations so the nearest one should only be a short walk away – can be booked by phone or online “from six months to 20 seconds before you want to use it”.
The card unlocks the car, and the user is charged by the hour – currently £4.95.
According to the AA, the average yearly cost of owning a car used for two weekly trips is £2,749. Valentine says that using their cars, the figure is £707 – he calls it a “rational economic decision”. As a timely bonus, the company estimates it will prevent 1m kg of CO2 emissions in the next two years, as people tend to drive less when they’re using Streetcar.
The pair invested “all the money we had”, laughs Valentine, “and quite a bit we didn’t.” It paid off. Three years later, the company has more than 15,000 members, 450 cars in almost 400 locations in London, Brighton, Southampton and Ashford, and a turnover of around £5m. And it’s tripling in terms of growth year by year.
This year, private equity investment from Smedvig Capital provided £6.4m to fund aggressive growth. Advertising has been stepped up a gear, and includes a considerable presence on the Tube. At least two more city locations are going to be added within a few months.
The final plan for the UK is not yet finalised, but a potential market of 250,000 members in London alone has been identified. All this even before the duo start thinking nationally, with real ambitions to be a Europe-wide leader.
In three years, Akker and Valentine, with no previous market experience, have built up a business of 50 full-time staff that’s hurtling towards international expansion. And possible flotation? “Absolutely,” says Valentine. “It’s fair to say the business has grown considerably better than we dared hope.”
In forming their company, the pair have created a market that could be massive, and there doesn’t seem to be anything stopping Streetcar achieving its potential.
