Streetcar: Andrew Valentine and Brett Akker
Andrew Valentine and Brett Akker found success by starting up a car rental business with a twist
Many entrepreneurs stumble across inspiration for their business through chance. Not Andrew Valentine and Brett Akker – the duo undertook a determined search for a gap in the market before taking the plunge.
Their search unearthed a US car rental business with a difference. Realising the potential of the idea, they exported the concept across the Atlantic. Streetcar was born.
“We went to university together and we had a drunken conversation about how we’d like to start a business,” Valentine recalls. “After university, we both went into the corporate world, but we always had it in mind that we would want to start up.”
Valentine and Akker met twice a week to meticulously comb through potential business ideas, seeking out the ideal opportunity. They eventually stumbled across an American business called Zipcar, which operates in New York, Boston and Washington.
The business partners realised that there was no UK equivalent to the company and set about creating Streetcar, which offers a fleet of self-service pay-as-you-go cars to urban commuters. The cars are located in designated off-street parking sites across London and Brighton.
Users are given a special PIN number to access the specially-adapted cars. They are charged £25 for membership and then have to pay a fee based on the amount of time they use the car.
Valentine and Akkers felt that they could take on conventional car rental firms by offering customers a near-by location to pick up the vehicles and convenient, 24-hour accessibility.
Following a year of planning and financial modelling, it was clear that the duo faced a significant challenge not only in building a fleet of cars, but also of convincing others about the viability of the business idea.
“We were starting a brand new industry, there was nothing like this before in the UK,” Valentine explains. “We spent much of our time trying to generate credibility, even for the most basic things needed to run a business. We’ve had an enormous communication job to get our idea across.”
Valentine and Akker put up £60,000 in funding for the business, after taking advantage of the Small Firms Loan Guarantee Scheme. Much of this was eaten up in the quest to assemble a fleet of cars, a task Valentine admits was “a long, hard process.”
The entrepreneurs approached over 70 financial institutions in an attempt to lease cars for the business, before finally striking a favourable deal with Volkswagen to supply them with eight Golfs. This fleet has now expanded to 125 cars.
After trawling the streets to find suitable premises to locate the cars, the founders have now established nearly 80 sites where users can access their vehicles. Valentine and Akker tracked down an overseas manufacturer who could cheaply produce the technology needed to allow secure use of the cars to genuine customers.
The duo held numerous focus groups with family and friends to formulate a pricing plan, and got PR representation through a chance encounter with a member – “We got chatting and I found out she was a PR consultant. It was a good old-fashioned barter arrangement – she gave us advice in return for the use of one of the cars.”
Streetcar is deliberately publicised only around an area in which its cars are available, in order to underline the easy-to-reach aspect of the service.
The business is aimed squarely at urban commuters who need a car for a short period of time. It’s estimated that there are over one million people in this target market area in London alone.
This tactic has bourn fruit – despite only trading since 2004, turnover has risen to £1.2 million, with plans to double this figure in each year of operation. Valentine reveals this will be done through expanding the business throughout London, but also introducing Streetcar to cities across the UK.
“The business has grown faster than we anticipated,” he says. “It’s growing faster than any business of its type on the world. We’ve got a simple structure and it’s working.
“All I would say to an entrepreneur looking to start-up is ‘Don’t give up’ and ‘Never take no for an answer.’ It’s very hard work, but it’s extremely rewarding.”