When UFODrive cofounder Aidan McClean decided he was going to overhaul the car rental sector, people thought it couldn’t be done. When he said he would do it with electric cars only, they were even more sceptical.
That was back in 2017. McClean and cofounder Renaud Marquet had an idea for an all-digital, all-electric car rental service controlled via an app. At the time, electric cars were still finding their feet. Range anxiety and a lack of charging infrastructure in many places were hampering their adoption.
But fast forward to 2023, and UFODrive has just opened its 34th location – in Dublin – and has expanded to the US, covering cities such as New York, Miami, San Francisco, Las Vegas and Boston.
“No one debates now that we’re going electric. They did then,” McClean says. “I spoke to a big name investor in California in 2017. He said to me: ‘Great idea, building an app, skipping the lines, making it transparent for customers, disrupting the current experience. I love it all – but why the hell are you experimenting with electric cars? No one’s going to use them’. We stuck to our guns on that. We were very early to choose electric.”
UFODrive now has some big backers. Car rental behemoth Hertz took a stake in the company in 2022, as part of a $19 million fundraising round, and is also deploying UFODrive’s digital rental and fleet-management technology to enhance its own global EV fleet operations.
It seems that McClean and Marquet’s vision may be about to be realised.
“We never set out to have hundreds of thousands of cars. That was never our plan,” McClean says. “What we decided to do was to build something unique in terms of customer experience, and unique in terms of user interface, and everything about managing an electric car, which is totally different to an ICE car. The plan always was let’s get as many locations as quickly as possible, with a very small fleet just to prove that people will use electric vehicles, and that our experience in terms of a 24/7 electric app versus appearing at a desk will work.”
Those desks, McClean says, exist only to upsell customers on products such as insurance rather than to assist customers.
UFODrive is not a threat to the established players. Hertz has nearly 400,000 cars and trucks across the world for rent; Enterprise has more than one million cars in service. But where it differs is in the approach to customers.
It offers high-end vehicles for rental from brands such as Tesla, Hyundai and Audi. There are no desks to deal with, or long queues – a major source of frustration for customers. Everything goes through the app, including the car inspection, paperwork and unlocking the car. The company offers rentals by the day or on a subscription basis for longer-term loans.
But it has been hard work to get the business to this point. The duo founded the company in Luxembourg, where McClean is still based. In 2019, he visited 22 airports and pitched the idea: it would need only a few spaces, would pay for the chargers to be installed to keep the cars topped up, and if UFODrive failed the airport could keep the chargers for themselves, no questions asked.
Around 18 said they liked the idea, but the terms were expensive and restrictive. Two or three said they were unsure. Only one airport turned the company down flat: Dublin Airport.
“We’re in Frankfurt and Hamburg airports because the management teams found creative ways to allow us to launch the company without controlled restrictive tender processes. We tried that in Dublin Airport because I’m Irish and I’m passionate about bringing this to Dublin,” he says.
The only way to do it was to go through the tender process, which McClean says was unsuitable for the type of business that UFODrive proposes. “Big document, a waste of our time. First question is how many rental desks do you want? None. How many people on the rental desk do you have? None, and so on,” he says. “Waste of time. We’ve got the whole world to do.” He still has the rejection letter from DAA, something he says he may frame and put on the wall.
McClean lays the blame at the door of the DAA. “DAA are a backward, antiquated legacy organisation,” he says. “Anyone working for the DAA for more than 10 years shouldn’t be there.”
It’s a harsh critique and DAA would no doubt argue that it has to follow due process.
Instead, UFODrive set up in St Stephen’s Green, in the RCSI car park, where it installed a number of chargers. At this point, it was already in Luxembourg, Brussels, Hamburg and Cologne. The Dublin location since has grown to be one of the company’s most successful, and last month, UFODrive opened a second in Marlborough Street in Dublin. “Dublin is not actually not our biggest but our best performing location,” says McClean. “We try to pick locations that are really stand-out so the advertising pays for itself.”
It has managed to get into the airport almost by stealth though, buying advertising in the airport at key points of the year, such as St Patrick’s Day.
More surprising than its track record in Dublin, perhaps, is the success of the company in the US, particularly in Texas where oil is deeply embedded in the state’s psyche. Its Austin operation has proven popular with customers, as has New York City, which launched late last year with almost no advertising.
Most travellers would have a frustrating car rental experience: straight off a long flight to your destination, faced with a long queue for a car rental that you have pre-booked and paid for and an agent trying to sell you the all-singing, all-dancing insurance that covers even the most minor of scratches to the paintwork. Or worse, finding there are extra charges that you were unaware of and that must be paid before you get the keys.
“It’s not the number one priority to digitalise the customer experience,” says McClean. “It’s not the number one priority to get a good review or to get people saying: ‘It was amazing. I arrived in the airport and drove away’. It’s not the number one part, they’re still in the buying-selling car world. It’s somewhere down the list, but it’s not number one unfortunately – which is good for us.”
UFODrive has been designed to cut out the worst parts of car rental. The aforementioned queuing, for example, and the lack of transparency in pricing. With UFODrive, what you see on the app is what you pay. And it also tackles the refuelling policy, by including charging in the price, and allowing customers to prepay for access to chargers over a certain level of mileage.
It also offers real-time connectivity to thousands of chargers, so customers can access a charger when and where they need it, taking the final obstacle out of its path.
Because of that different approach, though, when Covid hit, UFODrive didn’t suffer the same pain as other car rental companies. “We didn’t have an enormous fleet. We also have no interest in doing what every other car rental company do, which is buying and selling cars to make margins. We own practically none of our cars – most of them are all on leases, which is expensive, but we can afford the expense because we’re very efficient on the office side.”
Although it was founded in Luxembourg, UFODrive has significant operations in Ireland, where its innovation centre is located. That decision wasn’t made because of the cofounder’s link to Ireland. Around the time of its Series A round last year, the company was looking at setting up in London, Dublin and Luxembourg. It has a few staff in London, but ultimately decided on Dublin for the innovation hub, due to the availability of talented staff. “Most of the development is taking place here,” says McClean.
That is good news for Ireland when you look at the company’s overall roadmap. Ultimately, the aim for UFODrive is to become a software company, selling to businesses as a white label solution. “We sell to 12 customers, including Hertz,” says McClean. “They’re all going to be using our software not just for car rental, but for electric vans, company fleets, pool fleets managing their electric fleet using our technology.”
That means more fundraising, and further expansion for UFODrive.
“Then the plan is to take UFODrive to at least 50 locations – mainly Europe, Canada and the US. But really, we double down on the software because everybody’s finally waking up that electric is the future. They’ve no idea how to manage it, or what’s involved in an electric fleet. It’s not a car. It’s completely different to the old way of managing things. You have to have a software platform to manage electric; we provide that and we’ve got experience doing it for the last five years. That’s a huge potential for us.”
