Supper Club Stories: Interview with Andre Haddad, CEO RelayRides
At last week’s SoFi Supper Club in San Francisco, a small group of SoFi borrowers met with featured guest Andre Haddad, CEO of revolutionary car-sharing business RelayRides. We were so fortunate to have Andre share his insights around what’s driving the success of the sharing economy – and what he thinks is next for this groundbreaking industry.
We caught up with him after the Supper Club and asked him to recap some of the most interesting questions from the evening:
SoFi: What was the burning question on everyone’s mind at the Supper Club?
Andre Haddad (AH): There were lots of interesting questions around the sharing economy. We talked about some of the common denominators behind all of the different sharing economy players – everything from Relayrides to Airbnb to Lyft, and broader peer-to peer-models like SoFi. Everyone was mostly curious about what is driving growth of these new models.
SoFi: And what do you think is the answer?
AH: My hypothesis is that fundamental economic forces are driving the sharing economy model. The most basic economic force is a lack of growth in real household disposable income – it’s been pretty much flat over the last 30 years if you adjust for inflation. And I think that, more and more, people are realizing that you can’t just consume more. You’ve got to think about your choices – where to consume, where to purchase things and where you can access an asset rather than purchase it. Or if you purchase an asset and it costs you a lot of money, how do you monetize it so that it costs you less? That’s really one of the key drivers of the sharing economy.
SoFi: How much do the community and environmental factors play a part?
AH: This question came up, too. Is it pure economics, or is it people wanting to do good, or is it something around the environment? I try to paint a picture of Maslow’s hierarchy of needs. It starts with creating economic value, but then there’s also an emotional value because of the amazing connection this creates between people and the impact on the environment, which is a major plus for many people. It certainly is for me.
At the Supper Club, we had a long conversation around what drives people to participate in the sharing economy, because the reality is that it’s a big change from “normal” behavior. No one would rent a car to someone they’ve never met before, or let a stranger stay on their couch just to be nice. People do it for economic reasons at first. But then, as they get into it, they realize that the whole experience is also really fun and rewarding.
SoFi: On that note, how does RelayRides make it appealing for car owners to rent to strangers?
AH: When you own a car, renting to a stranger is sort of an unnatural act. Some people won’t even let their spouses drive their cars, let alone someone they’ve never met before! At the Supper Club, we talked a lot about what needs to happen in order to make it feel easy and safe for the car owner.
I think for businesses with this kind of model, a lot of it comes down to creating a high-quality user base. Just as SoFi has an extensive screening process to try to preclude any borrowers defaulting on their loans, RelayRides is pre-screening all of its drivers to prevent anything bad happening to these cars. For example, our drivers must have spotless driving records – if they have even one major violation they can’t rent a car on RelayRides. As a result, we have a much higher quality user base then the average driver population. And, of course, we have the insurance that covers both the owners and the renters.
So we create that trust and make owners feel comfortable, then over time we have all this great data that the marketplace is generating – ratings and reviews and pricing/conversion information. We use all this data to optimize the experience and make sure the best users get the best connections with the best owners, and the best owners, thanks to their feedback, are rewarded through better pricing and better positioning in search results. It’s really the typical e-commerce marketplace, where data utilization proves the overall experience.
SoFi: What do you think is next for the sharing economy?
AH: I think it will continue to grow pretty rapidly, first because of the powerful economic rationale that I’ve already outlined. Just the way that eBay transformed commerce by making it convenient to buy used things, I think the rise of the sharing economy is going to make the re-utilization of assets just as convenient and accessible.
But also, I think there’s a strong human element at play here. I have two cars on the marketplace with RelayRides, and I’m also a host on Airbnb and I’m a lender for SoFi. I’ve learned that when you participate in these markets, you’re connecting with people on the demand side, and I think for both parties it brings the kind of human touch that you don’t get when you’re staying at a hotel or renting a car from a traditional rental company. It’s less sterile and anonymous, and frankly it makes you feel good.
Yesterday one of my renters returned my car – they had used it to drive to Sonoma for a honeymoon trip. And when they came back they brought me a nice bottle of wine! This is just one of many, many anecdotes about the relationships that are forming through the sharing economy. You know, these aren’t deep relationships, but they put a smile on your face. And at the end of the day, I think that’s a good thing.
SoFi Members – we hope you’ll join our next Supper Club in your city. Keep an eye on upcoming SoFi events here on the Online Community and on our Events page.
Andre Haddad loves cars, the consumer web and the environment… RelayRides is the perfect synthesis of all three! He joined as CEO of RelayRides in September 2011. Before RelayRides, Andre was CEO of Shopping.com, the leading online comparison-shopping network, a company eBay acquired for $600M in 2005. Before Shopping.com, Andre was Senior Vice President, Product at eBay. He was responsible for product management, design and research at eBay’s global marketplace business ($5.1B in revenue, $65B in gross merchandize volume, 100M active users in 2007). Andre played several roles at eBay including GM in Europe, VP International Operations and VP User Experience and Design. Previous to eBay, Andre co-founded iBazar, a leading European auction marketplace, which was acquired by eBay in 2001 for $140m. Andre was the COO at iBazar, overseeing Product, Marketing, Operations and International. Before iBazar, Andre was a brand manager at P&G and a consultant at Booz Allen & Hamilton. He graduated from HEC Paris.