JUST two weeks into Splend's pilot program it was clear Chris King's idea to provide cars for Uber drivers was going to work.
Being an avid user of the ridesharing service, King (pictured) had seen that many drivers did not have the right cars for the job and he moved quickly to provide them a solution.
With his own personal savings, alongside asset financing and support from Uber, the 3-month trial started with 30 cars and was an almost immediate success.
King admits there was a sense of urgency, as his business kicked off during the early days of Uber's arrival in Australia.
"Very early on in the pilot, within two or three weeks, we knew it was probably going to work," King tells Business News Australia.
"By the end of two months it was evident that the business was a scalable solution and there was a sense of urgency there to roll out and get that first mover advantage."
The trial rolled out in July 2015, and 14 months later the business reached annual revenue of $12 million, with 868 cars on the road in Melbourne, Sydney, Brisbane and South East Queensland, Perth and Canberra.
Where Splend differs from a typical hire company is that it is targeted at ridesharing drivers.
It not only provides the car, it organises and pays for all the associated costs including insurance, registration, cleaning and maintenance, and it also provides ongoing support and coaching for the drivers.
The entry level vehicle costs $269 per week with no lock-in contract, and after four years the driver can take ownership of the vehicle.
"We bundled all the things a rideshare driver needs into a fully flexible package including a vehicle that can be returned with two weeks' notice they are not locked in and we are doing that at a cost equal to, or cheaper, than for what they could do it themselves," says King.
While King initially thought his service would be taken up by existing drivers, it has been the demand from new drivers that has driven the company's growth.
"Although many existing drivers maybe had the wrong car, there were people who didn't have a car at all who wanted to be drivers," he says.
"That is where it took off, among people who needed a compliant car who were looking to keep costs down with maintenance and insurance and so forth.
"We were overwhelmed with interest. Those people who didn't have a car caught us off guard at the start, but we made sure our solution was the perfect one for those types of customers."
King came up with the idea while working in Sydney as the CFO for a national electrical services business, where he was part of a team that grew the company's revenue from $5 million to $25 million.
He got his first glimpse of the taxi industry in his previous role as an advisor to the Western Australia State Government Minister for Transport and he says it was 'bizarre' as there were clear issues with the industry, but no political will to tackle them.
However, with the arrival of Uber, governments now have the impetus to reform the taxi industry with clear public support.
All states on the east coast of Australia have, perhaps grudgingly, moved to regulate the industry, including in Queensland, where ridesharing became legal on 5 September.
King says inquiries have picked up a 'huge amount' in Queensland since the legislation came through parliament.
"This has obviously been a long time coming, and the state was going down a different path until they reversed that course and legalised ridesharing," says King.
"It gives a bit of certainty and surety; people know that what they are doing is not a crime. It gives confidence to the whole market."
"It was a bit of a grey area of the law, whether it was technically illegal or not, because it was never proved in court. It was risky in a sense that we didn't know what direction the government was going in they were trying to make it a whole lot tougher, then they made it a whole lot clearer and certain."
"When you see on the TV that it is legal and there is no grey area, giving both the passengers and the drivers confidence, it leads to a strong increase in demand."
Splend is in competition to traditional car rental companies, and as King says, "it is not novel to rent a car". However, there are no competitors with a business model geared towards the ridesharing industry.
Over the next few months Splend will roll out cars in New Zealand.
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