By Kurt Wagner, reporter
FORTUNE -- Peer-to-peer car-sharing service RelayRides announced on Tuesday the acquisition of competitor Wheelz, a San Francisco-based startup also connecting users with nearby rental cars. The deal's financial terms were not disclosed, but Wheelz's financial backers have agreed to carry over their investments to RelayRides. Wheelz has raised $15.7 million in funding to date, and investors include Zipcar, Social+Capital Partnership, and Fontinalis Partners. (Fontinalis general partner Bill Ford is the executive chairman of the Ford (F) Motor Company).
RelayRides helps connect those in need of a ride with those in their community with a car to spare. Users rent a neighbor's car by the hour, day, or even the week. RelayRides raised more than $13 million in venture capital funding from Google Ventures (GOOG), August Capital, Shasta Ventures, and General Motors Ventures (GM).
Why this acquisition in a hot-but-nascent area? Wheelz not only increases RelayRides's market share (it is believed to be the only national peer-to-peer service with cars in all 50 states), but it also adds a new technology to the company's platform: a mobile entry feature that allows users to lock/unlock the car using their cellphones. Known as DriveBox, the technology allows car owners and renters to share rides without ever having to meet in person to swap keys. "Our vision isn't to stop at the car rental market," says RelayRides CEO Andre Haddad. "It's really to help disrupt the concept of car ownership by enabling people to rent cars whenever they need them and access [cars] on a need-basis rather than having to buy one."
Peer-to-peer car-sharing has grown in recent years spurred on by the rising cost of car ownership and general acceptance of a broader sharing economy that includes homes (Airbnb), freelance work (Elance), and office space (LiquidSpace). Haddad hopes to have a RelayRides car within a 10-minute walk of more than 100 million Americans by the end of 2015.
As the sharing economy expands into transportation, Millennials are growing up with carsharing, a very different spin on car ownership.
By Kurt Wagner, reporter
FORTUNE -- When RelayRides CEO Andre Haddad isn't using his 2006 Porsche 911, he encourages strangers to drive it.
This willingness to share -- even something as valuable as a sports car -- is the premise behind carsharing, a growing industry that connects car owners with renters seeking MOREMar 12, 2013 1:07 PM ET
|The Deep Web you don't know about|
|AT&T cuts prices again|
|Pizza chain Sbarro files for bankruptcy|
|"True Detective" season finale crashes HBO Go site|
|Winners and losers of the bull market|