Hyundai is investing $6.2 million in Australian car-sharing platform Car Next Door.
The funding takes Hyundai's total investment in Car Next Door to more than $8 million over the past 12 months.
The investment is set to boost the development of 'sharing ready' cars in Australia.
Hyundai is investing $6.2 million in Aussie car-sharing platform Car Next Door, to boost the number of "sharing ready" cars in the country.
The funding takes Hyundai's total investment in Car Next Door to more than $8 million over the past 12 months – believed to be the biggest investment from an automotive manufacturer in an Australian service mobility company.
Car Next Door allows users to rent a car by the hour or by the day, with fuel and insurance included. It is available in Sydney, Melbourne, Brisbane, the Gold Coast, Canberra and Perth, with rentals going from $5 an hour to $25 a day (plus 21 to 45 cents per kilometre).
More than 3,000 cars are listed on the platform and it has over 150,000 users.
According to a Car Next Door statement, the average person in Sydney, Melbourne or Brisbane makes $3500-$7000 renting their car out when they aren’t using it. Some high earners - particularly those with utes and vans - rake in upwards of $10,000 - $12,000 a year.
Hyundai Motor Company Australia CEO JW Lee said the investment will help with the development of ‘sharing ready’ cars, as new technology has become available to facilitate it.
"This is the future of connected green cars, where the ability to car-share is built into the hard-wiring of the car making it easy for one car to be used by multiple people," Lee said in a statement.
“This capability has been pre-installed and seamlessly integrated into Hyundai cars, making it easy for Hyundai owners to earn extra money from their car when they are not using it via Car Next Door’s innovative sharing platform.
“Other features include access and ability to unlock and start the car via a mobile phone app - ultimately negating the need for traditional keys.”
Hyundai's investment in Car Next Door is also set to support the company's expansion, allowing car-sharing to move out of urban centres.
Car Next Door CEO and co-founder Will Davies said the average car in Australia is used for only 4% of the time.
"For that 96% of the time they sit idle, they could be used to create an extra income and help to reduce parking congestion and pressure on our roads,” he said in a statement.
Car Next Door is among other Australian car-sharing subscription services such as Carbar and HelloCars. Honda has also launched its own car subscription service Drivible.
Keith Noh, Deputy General Manager of Hyundai Corporate Venture Capital Team said Hyundai is exploring new business models like car-sharing, ride-sharing and subscription which can provide benefits for its customers over time.
When asked why Hyundai is investing in a platform that essentially discourages the purchase of a new car, Noh said it wants to be "part of innovation through collaboration".
"The market is moving to shared mobility regardless of what Hyundai Motor's strategy or will is, so it is clear that our best option is to pursue what customers want rather than what we might like in our ideal world," he said in a statement.
IBISWorld noted that the car-sharing providers industry has grown rapidly over the past five years, as demands for cheaper and more convenient inner-city transport has increased.
Globally, car-sharing and similar trends are set to continue growing. According to Forbes, by 2025, vehicle subscription programs could account for nearly 10% of all new vehicle sales in Europe and the US.
In 2018 Car Next Door secured $5 million in funding from Caltex, Shark Tank’s Steve Baxter as investors, venture capitalist Roger Allen and Trevor Folsom’s early-stage investment group, Investible.