Florida firm floats new business model for boat rentals

Wed Apr 10 2013, 14:19 PM

Cruzin uses 'peer-to-peer' model to match boat owners and renters

A Florida startup plans to use a 'peer-to-peer' business model to match boat owners and renters. Ft Lauderdale-based Cruzin has designed a pilot rental program, in conjunction with a Florida marina, that will eventually be part of an international boat rental platform.

“We looked at parallel markets — peer-to-peer car sharing and vacation homes — and realised that there would be a market for boat rentals,” says Jaclyn Baumgarten, Cruzin CEO. “But we’re not just a listing service or aggregator of charter companies. We took a very different approach in this fledgling market, with a new level of professionalism and security.”

The peer-to-peer or 'sharing' economy refers to individuals using third-party websites to rent out a possession — often a residence or car — to people who have been pre-qualified as 'peers'. According to an article last month in The Economist, the sharing economy has become mainstream in the last five years.

Baumgarten and business partner Mark Harrison founded Cruzin last year to pioneer a peer-to-peer boat rental market. They saw opportunities to help offset operating costs for boat owners.

But Baumgarten and Harrison also knew there would be challenges. They realised that boaters, unlike many car owners, could be reticent about renting their prized boats to complete strangers. Renters might also be concerned about the seaworthiness of the boats they are taking out to sea for the first time.

To build up levels of confidence, Cruzin screens the boats as well as renters. The boats must be in excellent condition, says Baumgarten. Boat owners create a profile page on www.cruzin.com with photos of the boat, specs, and rental prices.

Potential renters are also required to fill out detailed descriptions of their boating experience as well as have financial background checks. “This is such a fundamental change of thinking for boat owners — getting them to rent their boats to someone they don’t know — that we are going above and beyond what is required in other industries,” she says. “The trust of our owners is vital.”

To increase that trust, the company also partnered with a national US insurance firm to provide owners and renters with US$1m in hull and liability coverage. Cruzin is also providing coverage from BoatUS for towing in emergencies as well as boater safety education.

The Cruzin founders believe that lowering a boat's operating costs will entice owners to list their boats with the service. “We've read that 40 per cent of people who drop out of boating do so because of the costs," says Baumgarten. "We think Cruzin could help keep some of the owners in the sport, and possibly help the boating industry across the board by enticing new buyers who are worried about the costs of ownership."

Cruzin has launched its Beta program in Ft Lauderdale, with a pilot at Harbour Towne Marina. The company is partnering with Westrec, which owns Harbour Towne. “Westrec has always been focused on providing quality boating experiences for our marina customers,” said Bill Anderson, Westrec president, in a statement. “We see tremendous value in the approach that Cruzin is utilising in leveraging the growing peer-to-peer economy in attracting a new audience to boating in an affordable manner.”

The partnership could help Cruzin find likely owners in Westrec's large network of marinas, says Baumgarten, as well as spread the word about financial benefits. "The marinas will certainly help educate their boat owners about the program," she says.

Cruzin will gain feedback from the pilot and make tweaks to its program before launching the national campaign later this summer. Eventually, Baumgarten says, the company will go international.