Recently, Prime Minister Rishi Sunak expressed a desire to turn the UK into a Silicon Valley-like atmosphere, where people can feel confident enough to forgo the reliability of a steady paycheck in order to begin a business of their own without fearing the risks associated with failure.
In 2016, Andy Hibbert, an entrepreneur from London, established Karshare, a business venture he described as "similar to Airbnb, but for car sharing". Unfortunately, his company did not make it past this year.
Many were affected by the twofold consequences of Covid-19 and the Ukraine conflict - yet they were also confronted with an uncommon and unappealing difficulty.
Mr Hibbert's maiden venture into the business world was Karshare; having previously held roles in the travel industry for British Airways, EasyJet and Reed & Mackay, a corporate travel agency.
His journey to the US was the catalyst for Karshare; a negative car-hire experience, combined with the observation of the success of Airbnb, being the main motivators.
He pondered the possibility of renting out his car to tourists when he had left it at the airport.
He acquired financing from angel investors and managed to get Gatwick to join Karshare during its initial year. Gatwick added a new selection to its webpage, thus next to Short Stay and Long Stay emerged "Rent and Earn".
This resulted in space being opened up in their car parks, giving them more room for parking.
Karshare organized an insurance plan, car detailing, and key delivery.
Aside from the likes of Turo in the US and Hiyacars in the UK, the partnership that Karshare was able to secure with an airport provided a unique selling point for its car sharing business.
By early 2020, Mr Hibbert reports that roughly 2% of people had opted for "Rent and Earn" on Gatwick's website, and that the venture was seeing progress. Negotiations were already underway for the scheme to be extended to other major airports.
When Covid arrived, the travel sector ground to a halt, thus disrupting Karshare's operations.
The company made a radical change in 2021, enabling people to rent cars from their own abodes. Additionally, they put in place a keyless system for vehicles, eliminating the necessity of waiting for someone to pass over the key.
In July 2022, Karshare experienced a period of 'high growth' as they had 1,600 rentals, according to Mr Hibbert.
Nevertheless, the conflict in Ukraine represented an additional serious setback.
The start-up needed investment to operate at a deficit, allowing for the idea to become more widespread; however, investors (like consumers) were unwilling to give up their money, Mr Hibbert explains, especially for consumer-facing enterprises.
A different, unexpected challenge was encountered by the business.
According to Mr Hibbert, certain individuals of disreputable character took advantage of the system.
Criminals recognised that hiring cars was simpler and more economical this way (even when they were looking for a fancy model) than having to go to a rental company in person. They were intending to use the cars for illegal activities, like trafficking drugs, and usually didn't possess a valid licence or had previous driving offences.
They circumvented Karshare's web-based verifications, hiring people to register for a car for them, and then manipulating still pictures to deceive the facial recognition process.
Clearly, the prospect of criminals using a user's car is unappealing. However, it also caused serious, potentially expensive problems for the business.
If a criminal utilized someone else's name to take a car out and then collided with it while being pursued by the police, the insurance firm would deny to cover the loss, since the individual driving was not the one mentioned on the Karshare policy.
A car could go missing, and the culprit might allege that it had been taken. As a result, Karshare was the one to bear the cost. Consequently, they introduced video identification and random identification examinations as a response.
Mr Hibbert reported that out of 40,000 users and 19,000 rentals, only about 30 similar occurrences happened; however, attending to the difficulty used up resources in terms of both time and money.
Karshare's plight is analogous to those who unlawfully hack e-bikes to exploit them without paying, hold ostentatious gatherings via Airbnb, or take advantage of e-scooters for illegal activities such as muggings.
Mr Hibbert emphasises that any business engaged in the sharing economy must have the foresight to ask how their system could be taken advantage of by criminals, as once such vulnerabilities are discovered, they are often shared quickly in illicit circles.
The Entrepreneurs Network reports that approximately 50% of businesses launched will not survive for more than five years.
A stigma in the UK around conversations about business failure has been present for many years; however, entrepreneurs such as Mr Hibbert are beginning to break that stigma.
Despite having to shut Karshare down this summer when resources ran out, he still has the spirit of a businessman.
He states that he may change his focus from cars to cows. He has explored the field of technological sustainable agriculture, looking into ways of employing algae to fertilise and finding better methods of supplying livestock with food..
If you have feedback on this article, or would like to make a suggestion for a business in the UK that has not been successful recently, then you can contact the business reporter Dougal Shaw.
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