Latest / Reframe First / Rei Vardi, Founder & CEO at Eon Rides | Automated Rentals. Human-Free Access

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Rei Vardi, Founder & CEO at Eon Rides | Automated Rentals. Human-Free Access · Reframe First

• Oleksij Rak: Hey guys, welcome to another episode of Reframe First. I'm Alexey at the Crosstoply podcast. Let me welcome our today's guest, Ray Verdi, founder and CEO at Unrights. Hey Ray, great having you here. Rei Vardi: Hey, how's it going Alexey? Oleksij Rak: Awesome, thanks a lot for joining. All I know about the company is ⁓ self-explaining motto is shockingly easy if you rentals. And some stuff that I read. But maybe could you tell us more about Ian Wrights, what you're building and what the purpose is and what the vision is. Rei Vardi: Of course. Yeah, yeah, absolutely. So what we do at E.ON is we connect cars that are not being used all the time with people that need to use them. So basically imagine a peer-to-peer model where you have a car and I need to rent a car. And what we do at E.ON is we make that whole rental happen between your vehicle and me as the renter. The catch is that we do everything completely automatic ⁓ with no human interaction whatsoever. So I can go see your car on the street. I say that's the car I want to book. I walk up to it. My phone becomes a digital Bluetooth key. I walk up to it. It unlocks. I get in. I go. And then you, Alexei, will never have to talk to me. I never have to handle back and forth questions with you. At Eon, we manage everything from start to finish for the entire rental process. So what you end up having is that if you're a vehicle owner, you can actually monetize your car and earn money on your car. Oleksij Rak: . So. Rei Vardi: with very little effort. And if you're a renter, you end up having the best rental experience out of any platform out there. Literally the convenience of getting and going in the vehicle you want within 40 seconds. Oleksij Rak: Okay. Yeah, that's awesome. And yeah, that sounds like a marketplace, which I'm familiar with. Yeah, so. Rei Vardi: you Exactly. Yeah. We're a marketplace, a managed marketplace model. Oleksij Rak: Okay, and what do you mean by the word managed? Rei Vardi: So most marketplaces are built in where you have a supplier and a customer. So you're going to typically have in a marketplace, you're going to say, hey, here's Alexei, here's his platform, here's his profile. He has maybe 4.6 stars. These are his past rentals. This is the feedback. And basically, the marketplace model, ⁓ really just a connector. It's you and Alexei figure it out. And we as the marketplace, we're just the place where it hosts this interaction. Oleksij Rak: Yes. Rei Vardi: What we do is we take it the next step forward. We're the next evolution of a marketplace where we say, why make Alexei and the guest have to do all this work together? Let's just do it for them. And so when somebody rents your car, Alexei, they don't see you as Alexei, here's my profile, here's my reviews, here's my everything, because you're not actually the product, we're the product. We just use your vehicle as part of it. Oleksij Rak: I understand. So there is no interaction between two parties. Rei Vardi: Exactly. And there's a very good, there's a very specific reason for that. Most marketplaces are services that, you know, they're very constrained, right? so let's say, let's say we were going to do an Airbnb, right? If you rent your Airbnb to me, you rent your house to me. there's only so much I can really do with your house, ⁓ right? the whole process is quite constrained. I, ⁓ you unfortunately it does happen. I could come into your house and I could trash your house. That's true. Right? Which is definitely, that sucks. But, that's really kind of the extent of the damage that can be done. I can't, for example, steal your house. I can't take your house to another country and disappear into the sunset. I can't use your house to run somebody else over and kill them. You know, I can't use your house to rob a bank. You know, there's all these different things that you just can't do. And with cars, specifically, ⁓ really can. It's an unconstrained service, right? So the second you hand off your keys to someone, You're just praying that they're gonna treat it the way that they're supposed to. And what typically happens in this space, the reason it's such a risky and dangerous space, is because people really get to do whatever they want, right? As soon as you give someone a car, you have given them the freedom to really use that thing in whatever way that they decide to. And if they don't bring it back, my God, now that's your problem to have to deal with. So what we do at Eon is we try to minimize as many different things that can go wrong. We realized that if you take a very expensive asset like a car, which in some circumstances is really a weapon, you know, when you give someone a car, it's like handing someone a gun and then you ask that person, ⁓ don't shoot anyone, bring it back on time, you know, don't damage the gun. That's too much to ask, right? So if I take, if I'm an amateur renting the car and you're an amateur who has the car and neither of us know what we're doing, the likelihood of us messing up and making something really, really damaging and expensive happen. Oleksij Rak: Yeah. Rei Vardi: is very high. So our philosophy at Eon is let's try and take people out of the equation as much as possible. Let's manage the experience digitally from start to finish and reduce the number of things that can go wrong. And what you end up having is just a much safer, much more convenient system for everybody. At the end of the day, you want to make money on your asset and the customer, the guest wants to just have an experience, just get into the car, go have 24 seven support and really not have to deal with you as a person. Oleksij Rak: So our philosophy is let's try to think about it as much as possible. Let's make it very interesting from a certain point of view. . Rei Vardi: So that's what we do at Eon. We remove the people from the equation and what you end up with is the safest, most convenient rental platform for everybody. Oleksij Rak: And how do you manage that risk? Not that risk, all those risks that you mentioned. lots of them. ⁓ Rei Vardi: Of course. so I'll, I'll take you back to the comp, when I founded the company back in 2018. ⁓ the time I was just a student in college and I was living in my dorm room and dad had this 2015 model S Tesla. So was like one of the ⁓ first And I trying to find a way how to make money off this thing. And Oleksij Rak: Yep. Hmm. Rei Vardi: Basically, realized, okay, I could rent it out to other people. family had been doing Airbnb before, so we're like, why not just do this with the car as well? And that's when all these issues that I was ⁓ to started to happen almost immediately. Within two weeks, I realized this is the stupidest thing I've ever done. ⁓ were scratching the car, denting the car, smoking in the car, not bringing it back. Someone a bank with the car at one point. ⁓ It's like everything that you think could happen, happened. Oleksij Rak: You Rei Vardi: then I realized, know, and that's beside the fact that, you know, I was just spending all my time on this. I'm trying to complete my studies and yet I'm skipping classes to go hand off the keys to people. And I'm getting woken up in the middle of the night with questions like, you know, how do I charge the car? I got locked out. You know, can you help me? And so that's when I realized that the operational labor involved ⁓ is really for anybody who wants to be in this space. that we actually live in a time where people expect things to be much more fluid, much smoother. Every ⁓ in your life has an app at this point. Why can't we have the same with these cars and the expectations there? And click came when I looked at the Tesla, ⁓ the electric I had on hand, and was like, wait a second. This is actually just a computer on wheels. What if we could program in technology and services into this? Oleksij Rak: Yeah. Rei Vardi: so that the car itself manages the rental instead of me. that's when the light bulb moment hit and I was like, okay, let's build systems where instead of relying on me and the guest to do all the steps, let's make the car do all the steps. Let's have it so that the car is the one that helps check in the guest. We have all the safety requirements and instructions and education ahead of time. ⁓ car will report to me where it is, ⁓ much it's driving, where it charged, what tolls it went through. If I can build that out and make it so that I'm not doing it, the guest is not doing it, everybody has much less work to do. The whole process becomes more efficient and a better experience. ⁓ and on top of that, you can make sure that that interaction, that handoff becomes much safer the same time. And so that's really the key ⁓ ⁓ built a system that relies on the intelligence systems of the vehicle to, to Oleksij Rak: Mm-hmm. Mm-hmm. ⁓ Rei Vardi: basically guide the rental in the safest way possible. Oleksij Rak: And how does this system prevent like guests from smoking in the car or from robbing a bank? Rei Vardi: ⁓ look, the reality is that somebody really wants to smoke in the car, they'll smoke in the car. But what you can build is ⁓ what we started building much ahead of time is ⁓ we were getting people onboarded onto the car, I'll give you like, ⁓ anybody figure this out if they rented from our platform. One of the things that we just realized is that you need to, ⁓ lot, people exist on a continuum. Oleksij Rak: Yeah, yeah. Rei Vardi: that lies somewhere between dangerous person you would never want to rent to and an angel who will do the right thing in every single situation. ⁓ people lie somewhere on that spectrum. ⁓ ⁓ course. ⁓ what's really interesting is that you're not going to suddenly take someone who's a very, bad person and then turn them into an angel. But with the right kind of guidance and giving the right information at the right time, Oleksij Rak: Yeah, statistically. Rei Vardi: You can make people, you can change people about 20 % to do the right thing as opposed to do the wrong thing. You know, someone who needs support, for example, just give you one example and then I'll tie this back into ⁓ Let's say you get a flat tire, you know, like maybe you're somebody who's really in a rush. You're very, ⁓ know, you're very quick to jump to conclusions and you can get very upset. have a temper, let's Okay. You get a flat tire, you call customer support. Oleksij Rak: Yeah. Rei Vardi: you can't reach customer support. Maybe the owner of the car is asleep, whatever it is. You can't get that tire changed. Okay, we're like, well, one's helping me. I'm late to my meeting. This is not my problem anymore. You leave the car where it is and you continue on. You get an Uber and then, and now you've got a car in the freeway that gets towed by the police and then it's ⁓ a police yard and now the whole thing costs thousands of dollars for a tire change. ⁓ Oleksij Rak: Mm-hmm. Mm-hmm. Yeah. Rei Vardi: Well, that failure of being able to provide the support in the right place at the right time just ballooned into a massive issue. Whereas that same person, if they had that capability to get what they need in that time, within the meaningful timeframe, would probably along the rules, do what's being asked to do, wait for the tow truck to come pick them up and continue on. Similar with smoking, ⁓ it or not. You would imagine that most people think, it's a rental car, I'm not allowed to smoke in it. Believe it or not, a lot of people need to be reminded of that pretty consistently. And there is a certain amount of forcing people to acknowledge, understand, repeat back to you what your terms of service are before they can unlock their vehicle for the first time. ⁓ Being warned. Boldly and explicitly that they will be charged. They will lose their deposit It's gonna be very painful if they smoke in the vehicle that actually makes a massive difference and That's the difference between having a system that forces people to you know again just specifically with smoking acknowledge the policy repeat back the policy to you and be ⁓ be well informed before they can get access to the vehicle as opposed to now you're relying on someone who's never done it before to hand off a key Oleksij Rak: Mm-hmm. Yeah. Rei Vardi: and hope that that message comes across. So, and I mean, that's just one thing, right? So our system, in order for you to like unlock your car for the very first time, you actually have to pass a quiz of what you're not allowed to do in the car. ⁓ And believe it or not, and if you get the quiz wrong, you go all the way to beginning, you have to start the whole tutorial again, you know? And that in and of itself makes a massive difference. So just ⁓ moments of control, little moments of pushing people in the right direction at the right time. Oleksij Rak: Okay. Rei Vardi: means that the whole system can be much safer and a better experience for everybody. Oleksij Rak: Yeah, you kind of try to adjust the statistics the needed direction. yeah, it does make sense. So yeah, awesome, awesome. And how big is the fleet? Rei Vardi: Yes. So right now, like I said, we grew from one car back in 2018. We now have a few thousand vehicles all over the country. And the vehicles come from partners that are as small as a mom and dad that have a family car that they're not using all the time, all the way up to full commercial rental car companies with thousands of cars. So we've got a giant spread all over the country with... a full spectrum of different vehicles. And ⁓ mean, we can get into this a little bit later. This has been our process over the past eight years of kind of slowly building the system, getting it working piece by piece until getting to the product that we have now. Oleksij Rak: Awesome. And how do we deal with... trying to think as an owner of the car, how much I can make from the car if I just put it on the street ⁓ register in the system and what should be my expectation. Rei Vardi: Yeah, of course. You can a, mean, everything depends on your own, on you set things up, your location, everything is very right? So you decide your own price per day. So that makes things a little bit more difficult to calculate, ⁓ but somebody ⁓ a decent with a smart strategy for pricing. Oleksij Rak: location. Yeah, yes. ⁓ okay. Mm-hmm. Rei Vardi: which we give all of our partners tips and tricks on how to price correctly and we have kind of an automated pricing curve so that they can follow. Something like a Model Y could easily make you $2,500 a month, which is much more than enough to pay for the car and then some. And that's why we've got a lot of partners that started with one or two cars and then have scaled up their fleets to several dozen, some cases over 100. and turn it into their full-time business because we make it so easy to manage a hundred cars because everything is so automated that really the only thing that they have to do is focus on preparing the cars between trips looking at their unit economics deciding what car to buy next. Oleksij Rak: Yeah, that's a good business opportunity for everyone. How do you manage the connectivity? Not connectivity, but rather bringing cars back. have a lot of scooter operations in our city and ⁓ when there are peak times, users are picking from one destination and bringing mostly to another destination. And then the scooter company is bringing all of them back. ⁓ how do you manage that? Rei Vardi: Yeah, so we with cars it's a little bit different because we only start per day We don't let you rent by the hour or things like that, you know, it's just it's just for a too risky So we give people the ability to rent it per day by the way We've got customers that rent the cars on a monthly basis month to month with some people having rented with us for more than ⁓ or three years just it's so much more Oleksij Rak: ⁓ it's per day. Okay. Rei Vardi: convenient and flexible. We get people that rent for a month when they're in New York City and then when they travel or they need to go to somewhere for work they rent for two months down in LA then in San Francisco. It's just way more effective than buying a car. generally people will return the car back to the same place. They can select to opt into delivery for an additional fee and then we'll bring it back or drop it off where it is that they want. But almost people will decide we'll just bring the car back to where they picked it up. Oleksij Rak: Yeah, it's different than our early rentals. Yeah, it's midterm rentals I would call it. Yeah, also, how big of a operation does it take to support this fleet and to support all of that? I guess it's not that much. It's like a few thousand cars in terms of IT systems, in terms of people involved. Rei Vardi: Definitely. Wow, that's a fantastic question. Yeah, no, that's a really, really great question. love that question. Traditional rental operators, know, standard car company will need like a few dozen maybe 50 plus employees to sustain an operation like this. For us, we have five people in the office. ⁓ Oleksij Rak: my team found someone, but okay. ⁓ Rei Vardi: Yes, small team. ⁓ that's all you need. If you build the product right, and if you build the service the way it should be done, you don't need that many people to manage it. ⁓ that's really the whole philosophy. Oleksij Rak: Yeah. That's great. And what are these people doing other than like... Rei Vardi: Mostly we're giving each other high fives all day, you know. Well, we've got myself, you as the CEO and then we've got... ⁓ Oleksij Rak: I mean, it's kind of, ⁓ it's kind of like automated operation, right? So it's mostly. ⁓ Rei Vardi: for the most part but obviously you you do need the human touch in a lot of situations so we've got myself, we've got a head of operations, we've got you know an owner you know we do have like a call center that if need like ⁓ phone assistance for they can they can operate there but then other than that it's like a designer, engineer, operations manager one person for marketing and then myself Oleksij Rak: Mm-hmm. Rei Vardi: And that's kind of the, that's the whole team. You're looking at the, whole operation. ⁓ in some senses, you know, we, we take things a little bit more slowly. We make our decisions a little bit more intentionally, but on the other hand, we are also much, everybody is much closer to the action and to the problems than you do on a big team. You know, when a lot of big companies, if a customer has a problem, if a customer has a complaint that typically doesn't reach past certain organizations. On ours, everybody's got their ear to the ground, which we're very proud of. Oleksij Rak: Awesome. Yeah, that's a great niche to ⁓ regards to the market itself, since you were in operation ⁓ seven, eight years, what do you see that has changed recently? Because it's already seven years, it's pre-COVID and then there was COVID lockdown, and there's lot of changes after the COVID, people working from home, and I don't know. What do you see? Rei Vardi: Yes. So the overall demand for cars has never really changed that much. People think that with more Ubers and Lifts, now especially with ⁓ vehicles like Waymo, that very people are not going to need cars. But that just hasn't been true. Those kind of systems, whether they're ride sharing like Uber, Oleksij Rak: Thanks Okay. Thanks Rei Vardi: or their autonomous vehicles like Waymo. It's really, the effect has been that that's great for, I mean, that's killed the taxi industry more than anything. It's just been, that's excellent for short term, short distance rides, but people really no, this is the best solution for people for the medium to longer term rental. You know, whether people need to travel longer distances or, You know, imagine like coming, need to get to the Grand Canyon from Los Angeles. You're not going to take an Uber to get to the Grand Canyon. know, it's like the worst nightmare you can imagine, right? Even assuming that it's not crazy expensive. It's just with your luggage, having to carry it different places, not having the flexibility of knowing, you know, ⁓ that in one place and you can just go from spot to spot. Car rentals has always been there. What's really changed is ⁓ how for electric vehicles. Oleksij Rak: Mm-hmm. if Rei Vardi: has changed and modified. would say that the ⁓ demand, what people actually want to drive for electric has slowly been increasing over time, but slowly. I think headlines ⁓ faster people's demand for it. So a lot of companies will jump on and require fully emissions-free fleets, and they'll only rent zero-emission vehicles. Great for us, obviously. But the average consumer, somebody who's just coming into a city, they get more and more comfortable with electric vehicles, but it's not necessarily the most important thing to them. What's more important than anything is really convenience, which again, that's what we focus on the most. What you saw especially during COVID was kind of a restructuring of the ⁓ rental models. And COVID was really where we got our first big break to get the chance to compete in a much larger scale than we did before. What happened? So one thing to understand, I'm sorry, I'm kind of jumbling this all up. I'll give you kind of a breakdown of the car rental industry and then that'll maybe help fit some things into place. So car rental is kind of like airline travel. Oleksij Rak: OK. Bye bye. Rei Vardi: in the sense that you will typically have a lot more cars on the road the same time, ⁓ they will be sitting in one place. If you want to understand the car rental industry, the first thing you need to know is that 75 % of it, the vast majority happens at the airport. People typically get off the plane, they rent a car there, and then they continue on. ⁓ And the number one constraint that you have at the airport is actually space. ⁓ Oleksij Rak: Mm-hmm. there. Rei Vardi: you're going to have maybe a giant rental car company, you have a hundred, for a hundred cars, right? And so you will typically have a hundred spots, ⁓ but 700 cars in your fleet with the expectation that most of them are going to be on rental most of the time. And then when they come back to the parking lot, you just switch them around, get them ready for the next one, they go out and that's it. Oleksij Rak: Okay. Rei Vardi: What happened during COVID is that all of those rentals stopped at the same time. Now, all of a sudden, you've got 700 cars, 100 spots, and everything's on fire. And that's really what happened. And when I say everything's on fire, literally in some cases, companies had to park their cars out in empty fields, and those fields caught fire, and then there go 500 cars. ⁓ not even joking. That's a real thing. ⁓ Oleksij Rak: Yeah. Yeah. Thanks Rei Vardi: Those are kind of the challenges of that market. It always needs to have a consistent, this is what's expected moving forward. you start looking at, ⁓ do electric cars fit into that model? Well, it's a challenge for electric fleets, for those fleets to electrify specifically because again, that space issue. Electric vehicles need infrastructure to recharge. know, when a car comes back from a rental, It will typically need to be refueled or recharged, cleaned, and then sent out on its way. If it needs to be refueled, okay, that's very easy. We just pour some gas into it and then it's ready to go. To recharge it, that thing might have to sit there and plug in unless you're willing to spend ⁓ million dollars plus per location to get very high speed chargers on site. Not to mention that that car now has to sit there and it's a dedicated spot. It can't just be moved around, it will. Oleksij Rak: Yeah. Mm-hm. Rei Vardi: That makes electrification at airports very, very challenging. the car rental industry as it has been ⁓ ⁓ a great adopter of that. And that means that consumers are not getting access to these vehicles in the same way that they otherwise might. That model completely flips when you look at it within the city. If living in the city, parking is at a premium. It's actually very costly to own a car in the city. because now I have to pay for land, have to pay for insurance, have all these different costs, and have lot of alternatives for transportation in the city, so the comparative advantage drops significantly. Where it does become extremely valuable is if I need to get out of the city, if I need it for multiple days, if I need it for something specific. And at that point, it's actually more convenient for you to come pick up a car to use on a per-use basis from your neighbor's house Oleksij Rak: Yeah. Rei Vardi: than it is to go to the airport and pick up a car there. And so that's where E.ON comes in and fills that niche specifically. An electric car that can actually be picked up in the city that has a lower cost per mile than a gas car on average, the same issues of having to have dedicated infrastructure in a high volume location, where that car can be plugged in overnight and take as much time as it needs to because that car is already owned and managed by someone else. That's where the real advantage comes into play. And that's why when you stack this feature of just the way that these cars operate, plus all of the advancements and the automations that we do in managing that rental for you, that's why you end up seeing that our rentals actually end up being cheaper in many cases than the typical gas ones. It's just so much more efficient. There's so much fewer costs associated with renting a car in the city that's an electric car through Eon than the traditional way. where there's all these added costs of super high premium land at the airport, et cetera. Oleksij Rak: It makes sense. Yeah, yeah, yeah. That's a great niche. with regards to some others like trends from the market, like you mentioned, like what happened in COVID times. What about like change of generation, Gen Z, does it at all affect your business? Quite not. Rei Vardi: I younger generations are becoming more more comfortable with the concept of just per use ⁓ subscribing to services as ⁓ to purchasing, which again is excellent for us. Like I said, we these ⁓ subscriptions week to week, month to month options for customers. we're seeing you know, and I'm speaking as one of them, right? I run this ⁓ company. Oleksij Rak: Yeah. or use. Yep. Rei Vardi: ⁓ Gen Z slash millennial. I don't own my own car, right? I rent from the platform whenever I need to use a car for anything. So, because it's just so much more convenient, so much easier for me to do so. And that's the millennial mindset too. It's moving away from owning a car, having to manage it, dealing with depreciation, and just saying, I only need the car like twice a month. Let's just rent it, let's just use it then. And that's basically what we do. Oleksij Rak: Yeah, you're a user of your own product. That is great. Rei Vardi: ⁓ course. It's funny. Everybody in the company basically has, you know, free unlimited use of cars anywhere they travel to. It's part of the perks. So if anybody's listening that wants to work with us, you ⁓ know, that reason, shoot us email. ⁓ Oleksij Rak: But you are doing well while being a team of five. Awesome. Rei Vardi: Yeah, it not work with 100 people, with five people it's fine. Oleksij Rak: Yeah. What about recent ⁓ with AI, with ⁓ ⁓ automating everything and stuff? So you're already a bit ahead of the curve with automating complete, but doesn't touch you at all. Rei Vardi: Course. Yeah, very excited about the way that the self-driving tech is moving forward. mean, people are going to debate this until it's done, but basically, question is not if, it's when. When cars actually drive themselves ⁓ mass, whether it's in three years, five years, or 10 years, it is coming. And actually see what we're doing as the perfect ⁓ starting for Once again, when cars ⁓ fully automated and can drive themselves, if you need to do a road trip or if you need to go have car for several days, actually the number one thing that you're going to look for in the car that you rent is AI features, is the ability for it to drive itself. ⁓ And actually where our model is even stronger because here's one of the things that I... Oleksij Rak: Mm-hmm. Rei Vardi: was kind of touching on earlier when I was talking the traditional model of airport cars versus our model. One of the things that's kind of implicit but I didn't say explicitly is that the price of the vehicles and the quality of the vehicles is massive difference as well. The airport model, because it's so volume-based and so volume-dependent, it typically only works if you can get the cost of the vehicle down so low. that you're able to just mass produce this product ship it out. And so generally speaking, what car rental companies will do, the big ones, is they'll have deals with the auto manufacturers where they're gonna take ⁓ last batch of cars off their production line before they update the factory. And get these cars at a discount. the next you go and you rent a car from the airport, right? Pay attention to the car itself, it's very interesting. ⁓ recognize that it's the same car as the one you can buy at a dealership, but it's a bit less. Things are not quite what you ⁓ There's no in the car. The car seats are mechanical instead of electrical for adjusting the seats. All these little quirks, these cost saving cuts, because that car is specifically produced for ⁓ a rental car. not like as something that you would buy from a dealer. It's cheaper and they get it at like, you know, more than half the price of the car you get from the dealership. Where that's gonna, that model is gonna really start to fall apart is when the autonomous driving, the self-driving cars come. Because people will have a whole new expectation of what a car should do, but they're not gonna be able to make those unit economics work at the airport anymore. Oleksij Rak: Should be cheaper, yeah. Rei Vardi: That's where we are our model, I think, is what's going to be more readily available to accept those ⁓ cars because all of these automated rental and sharing systems that we've built are what keeps the car at a safe enough level that you can afford to rent out a very expensive car, which is what all these self-driving cars are going to be at first. They're going to be very, very expensive to get you. If you want to go across the country without human interaction, that's ⁓ going be you're going to need a car that costs a decent chunk to start. Oleksij Rak: Yeah, yeah. And with services like yours and with all these self-driving cars, quite likely there are some emerging needs in fleet operations. need to be able to operate the fleet of the cars at a scale, especially probably with self-driving, but also ⁓ your service, you also need to manage and operate that fleet. ⁓ that also comes down to the delivery fleets ⁓ Rei Vardi: you Oleksij Rak: transportation, fleets, whatever. What are your thoughts on that? Because I do not really have much experience in that field. Rei Vardi: ⁓ so could you ask the question again? Oleksij Rak: Or is it like... Yeah, the question is rather like, thinking a lot about like the car fleets ⁓ operation. Is that like some emerging trend or there is no trend? It's just few bigger companies who will be having like bigger fleets and they have some internal systems have to manage these fleets. Rei Vardi: Well, eventually is going to happen is these fleets need to be maintained. That's the thing that everybody likes to is that you think that once a car can drive itself safely in almost all conditions, that you could just turn a switch and then these cars, then they're good to go. But one of the things that happens very, very quickly is that liability ⁓ shifts from driver to the company, because the vehicle itself is now on the company, right? And that vehicle, by the way, it's not clear if it's going to be the company that owns the vehicle or the company that manufactured the vehicle. If buy a new car and that car ⁓ swerves ⁓ hits who's responsible? You who bought the car or the manufacturer? Well, here's where it gets a little trickier, because the maintenance on that car might make all the difference of saying, car get an accident or not? if you didn't change the tires and the tires don't have grip and that's part of the reason that the car slipped and got into an accident that might be on you. the car's sensors weren't cleaned ⁓ they weren't operating correctly because they weren't maintained maybe that's what caused the accident. So question of ⁓ who's liable for if anything could happen that's kind of the biggest barrier to this thing really taking Oleksij Rak: Yeah. Rei Vardi: That question of how do we manage to maintain reliability different operators, that's the thing that people are still trying to figure out. And fleets, no matter what, will have to figure out how to do that. And why it's not just going to be, OK, Ford makes the car that's fully self-driving, bam. You know, nobody owns Fords anymore, it's just Ford doing its own entire vertical, you know, Ford's leasing to Amazon its cars, but it's not selling them the cars because it wants to keep all the money itself, know, stuff like that. That's ⁓ not what's gonna happen. ⁓ Oleksij Rak: Yeah, I hear you. So was thinking about the fleet like, ⁓ don't know, operational engineering, IT, whatever solution, but ⁓ you like liability and maintenance and that's probably ⁓ much issues ⁓ to than like building some IT systems. Rei Vardi: Yeah, and again, the problem is that... These systems, question of maintenance is going to be ⁓ to the issue forever. It's going to be something where you're going to have to ask, how is this system manipulated perhaps? Whether it was ⁓ intentionally unintentionally, through negligence or through recklessness. If I you a car and that car is going crazy and it's running people over on the road, Oleksij Rak: Mm-hmm. Rei Vardi: Well, what happened between when I sold it to you and when that car is the road that might make it ⁓ some money over? Did you do that? Was because of a manufacturing issue? This is the problem. And that really is the ultimate question. Of course, ⁓ Oleksij Rak: Yeah, yeah, great. was trying to dig down there because it's something new for me. ⁓ for explaining. With regards to your business, what stops you from, ⁓ what stops you, but what are the main obstacles for you to grow faster? What the limiting factor? Rei Vardi: you It's fantastic question. The biggest issue that we have is just getting people to know who we are and what we do. At this stage, yes, one of the things I'm kind of proud to say, but a lot of people will bang me in the head and say, you're a bad entrepreneur for this, is we've never run ads for the company. We've never paid for marketing. It's always been organic growth, organic. Oleksij Rak: Custom acquisition. Rei Vardi: rankings with SEO and word of mouth of customers. that's one of the things we're now trying to figure out. I think as soon as we're recognized as one of the options, it's a no-brainer for us to continue to grow. Oleksij Rak: Yeah, but did Google's recent issues over the last two years probably touch you? Because Google is really restructuring the way they give you traffic. The restructure of the whole search results page output. We say answers and all that kind of stuff. A lot of business went down because of that, who did rely on Google. Rei Vardi: Yes. We Yeah, course. We actually saw very little change in ⁓ our and ⁓ our for findability. I think just the way we built our pages was already in line with Google's updated requirements as opposed to what previous version Oleksij Rak: So that's interesting because your platform is a marketplace. Marketplace is always a chicken and egg problem. So if you do not have the buyers, you do not have sellers and vice versa. And still you manage to grow organically with Google and worth of mouse help only. But how do you address these issues when you're going to a new market, when you open it like a new location? How do you grow there? How do you the growth there? Rei Vardi: correct. correct. Well, one of the things that's really important is we're not creating a new market. We're coming to people that are already here. Right. So a lot of marketplace models will need to convince you, for example, Alexei, go buy a house, rent your house out for the first time, things like that. The way we look at it is we're looking at our partners that ⁓ vehicles. They already exist. They are already out there renting out their vehicles. And so it's much easier for us to come and say, hey, here's another customer acquisition channel. Here's another revenue stream. long as you stick by our ⁓ standards, ⁓ you can be a part of our network as well. So we don't have to generate supply. The supply is there. And likewise, ⁓ the is also there. We just have to acquire it. So it becomes a much easier problem because all we have to do ⁓ is just in the customers. If we bring in the guests, Oleksij Rak: So. is our Yep. Rei Vardi: owners of the vehicles are already there. And again, owners are ⁓ just every business. If you're a business of running a fleet of rental cars, you're seeing that your cars are ⁓ constantly booked, you're making a profit, you're growing the business, you get more cars. And that's just how that's worked. Oleksij Rak: so basically you are not convincing them to use the platform, you're just giving them. Rei Vardi: It's much harder for me to tell you to build that marketplace by convincing you, Alexei, to go out and buy a car and put it on the platform than it is to come to a car rental company and say, how would you like 30 % more revenue? And I would recommend to anybody who's trying to build the marketplace model, try to find a place where you have a little bit of back, you know, like a little bit of a... Oleksij Rak: Yeah. Rei Vardi: like a wall that you can lean on, something that already exists in the marketplace a little bit so that you're not constantly running back and forth. You can put your focus on side of it a little bit more than the other. Oleksij Rak: Yeah, that's similar. I've seen this approach in like apartment rentals services, marketplaces, when you want to merge. It's quite sweet growth quite easily because supply and demand are there. So if it provides better service, it has a good chance, good chances to grow. Awesome, awesome. And alternate question is like, what keeps breaking as you grow? Rei Vardi: Yeah. Exactly. Oleksij Rak: it's not what prevents you from growing, but what keeps breaking. Rei Vardi: Yeah, well, things that break first ⁓ we need keep building new systems to kind of handle the customer inquiries, questions, support. We are working on streamlining things where, at the moment, we're ⁓ hundreds and hundreds rentals every week, new rentals every week, okay? ⁓ So there's ton information coming at us. where people are always asking questions, always need assistance, they always need help. For us as a five person team to manage that is already very like, that's more than most companies. But as that continues to grow, we still have to like grow our capabilities to do that. And so that's the first thing that we feel breaks. know, it's the first thing that's like, wait, why did this customer have to wait 24 hours for us to reply? That's not okay. How do we make that faster? How do we build that so that... you know we can get to get them what they need as quickly as possible and especially by the way in in this industry and a lot of services there's kind of an acceptable time to answer with mobility ⁓ very very short the acceptable time to answer is very short because ⁓ are needing to get from one place to another right now and you and that's that's the biggest challenge that we're That's the thing that's always like, okay, we need to build this new ticketing system and this new resolution method. And that's just always like every single new feature we build. And then we go back to, okay, how do we make customer support better and new feature and customer support better. Yeah. Oleksij Rak: But still, you manage to automate every single step because you stay as a team of five people. you're trying to resolve the ⁓ that break, you're resolving them in kind of automated way. Rei Vardi: or we always try to issues before they become issues. So if we can predict what problems the guest is gonna have, we're gonna handle that first. So I'll just give you another example. One thing that our system does that I'm very, proud of is, again, we're speaking to the vehicle. So if it's an hour before the trip is set to start, our system checks on the vehicle an hour before the system starts. So the vehicle is not where it's supposed to be. At pickup, red flag, communicate with the partner. reach out to the guest, provide them an alternative. Car battery is not fully charged? Similarly. This way, we don't deal with a situation where a guest shows up in a car and there's no car. That's unacceptable. And that happens a lot on a lot of other marketplaces. So we get ahead of that problem so that we're not dealing with someone potentially late to a wedding and doesn't time to get to another car or find another car. That's our approach to most of these problems. Oleksij Rak: Yeah, and that helps with word of mouth spread because if customers are satisfied, are spreading the information. Rei Vardi: Yes. Oleksij Rak: And what are you working on nowadays? So what are your bets about the nearest future and where do want to go, where do want to be in 12 or 18 months and what are you building? Rei Vardi: Sure. ⁓ The main thing we're building is just tools and systems to help our partners grow. That's right now what we're focused on. We want to make it easier. There's a couple of steps required to get their cars onto the platform and get those cars set up and ready to go. And so a big part of what we're building right now is just tools to get them on faster and help us, you know, help them grow their businesses more quickly. That's a big chunk of what we're doing right now. thing that we're focused on, where we'd like to eventually build ⁓ company and create a service that's really never been done before, is we our capabilities these vehicles as so advanced that we wanted to build out the world's first ⁓ free-floating car subscription So what I mean by that is, if I like say if you want to get a gym membership, typically if you have a franchise gym, one membership will get you into 50 different gyms in your city. You can travel across the country and you can still use your gym membership there. What we want to build eventually is the ability to have one subscription that you pay monthly and now you have access to all these cars across the country. So if you need two days here, then you're traveling over there. you just have that ability to just pop into a car anytime you need. And that's something that's never been done before. yeah, so that's like the next 12 to 18 months for us. Oleksij Rak: Next 12 months? That's a big goal because that's enormous fleet and you need to really operate at a scale to have huge fleet and huge supply, huge demand and match them somehow together. On a smaller scale it would be problematic. Rei Vardi: Thanks. Yes. Yeah. Yeah, it's not useful on a small scale. That's why the first tool is for us to help build out features and tools for our owners and our partners so that they can, you know, so that we can have even more cars for our customers to use. Oleksij Rak: Awesome. What other challenges do you see that you have? What do you see like upcoming? Just like my curiosity. Because it's really interesting business niche and I'm just talking with you and thinking that, okay, I want to work or build a marketplace platform that can be run by five people. Probably not the car vehicles because I'm not familiar with that, but it's kind of doable from what I hear from you. it's doable to run with a smaller team. Large scale operations, especially when you automate every single step. Rei Vardi: Well, doable absolutely, but one thing to remember, yeah, well. course. thing to remember is that look, we exist in a very unique place in a very unique way. It's really important to keep in mind that we've been doing this for eight years. Eight years is a long time. That's ⁓ like, dinosaur in tech speak, you know, ⁓ and vast majority of companies, especially tech companies, you know, they follow this like three or four year lifecycle. The expectation is with a tech company, you pitch Oleksij Rak: Yeah. Yeah. Rei Vardi: You raise money, you build the company very quickly, and you exit. honestly, the vast majority of marketplaces really kind of need that model because in order to generate, create a marketplace, you need to bring in customers and suppliers at the same time. And that means you need a lot of resources at the same time. You need to be advertising to both sides concurrently and just jumping back and forth and doing all these different approaches. That's extremely challenging. And that Oleksij Rak: Yeah. Rei Vardi: almost always requires capital. In this marketplace specifically, and I would say in a lot of marketplaces, actually gives you a catch-22. Because let's say you go and you raise a bunch of capital and you build out that marketplace. Your investors have an expectation of return on capital that's, again, three to four years. They expect you to grow, grow, grow, grow, grow, and at that point, move on to the next thing. Well, with vehicles and to some extent other marketplaces, but especially with cars, you prioritize only growing the what you always end up doing is you always end up cutting corners when it comes to safety, when it comes to ⁓ security, when it comes to just basic unit economics. so common for you to say, I'll figure out the unit economics later. Oleksij Rak: service. Yeah. Rei Vardi: and then build this big company and then realize this is completely unsustainable and we can't change it anymore because we already built it in this certain way. So that I think is the biggest challenge with marketplaces writ large. We're very lucky and a reason that it took eight years to get here because that's how long it takes to build something without capital. I'm not saying that I recommend it for people. You know, it's longer than most relationships you'll have in your life. But it does mean that we could have our chance to build it correctly, make sure that it actually makes sense for our partners, for our users. But, you know, that's the Catch-22 you deal with in marketplaces. You either scale fast and potentially build it wrong, or you build it right and never get off the ground. Oleksij Rak: You Yeah, I hear you. I absolutely hear you, we are in marketplace space for maybe more than 15 years. We've been building multiple of them. As service providers, we've seen them grow. it's like we believe that the easiest is to build the marketplace. The hardest one is to solve the chicken and egg problem, is to make it succeed. Rei Vardi: you Oleksij Rak: But nowadays with advancement of AI, with AI tools, with new generation like Gen Z, it's also about, know, people used to like their smartphones in their chats and so on, with agentic models, with ⁓ the tools available, with people not willing even to go to a website, they're quite often fine to use the chat. to order stuff. It's getting really easy to build something. It's question to how to find these growth hacks to grow something. that's one of the reasons of this podcast. We are trying to explore the models. We are trying to understand what models are there and what ⁓ are changing in the market. Maybe is a magical match. Yeah, we'll Rei Vardi: Yeah. Oleksij Rak: Right, it was really great story that you shared and I learned a lot personally because I never knew about this kind of marketplace concept, never touched this kind of marketplace concept. Thanks a lot for sharing that. we wrap up, do you have anything else to add on top of what we discussed? Rei Vardi: ⁓ that i i i had a great time trying to feel like says was i think you asked amazing questions and ⁓ i think that if you're starting a small company today to anyone listening i think that the tools that you have at your disposal with all the a i systems and l l ⁓ z and everything you pull out you probably have a much bigger advantage than you think to even the medium-sized companies. Your ability to move fast is your greatest asset. And so I would just say go after it, give it your best shot and just keep That's honestly what been doing for the past eight years. And that was before AI tools, but now with the tools at our disposal, there's so many different So don't get discouraged and just give it a shot. Oleksij Rak: Absolutely, absolutely. We've been working and we are working with big players on market and we see how slow they are from inside in decision making, in engineering, in development, in building things. yeah, yeah, with current tools, that's why I'm seeing this kind of like opportunities, this kind of not niche, but opportunity to like jump in. Thanks a lot, Raid, again, and good luck with what you're doing and I hope to reiterate with you like... Rei Vardi: Correct. Oleksij Rak: couple of months, years time and see if you manage to build that huge fleet. was it. Awesome. Thanks a lot and have a great day. Rei Vardi: Fantastic. Sounds like a plan. Thank you. Thanks Alexei. Oleksij Rak: Yeah, cheers.