Zephyr Car, which had been operating in a low-key way since February, today emerged with a new name — Breeze — and a flexible pricing model, charging its members as little as $20 per day plus 25 cents per mile for use of a car.
The three co-founders of the San Francisco-based startup, former employees of Uber, Homejoy and Twitter, said they spent weeks as drivers for transportation network companies, the state’s category for ride services, and saw firsthand the need for a service like Breeze.
“We saw every one of these companies facing a shortage of drivers and we saw an opportunity to provide a new model where drivers share cars,” said co-founder Jeffrey Pang, 25, who worked in finance and business development for Uber. “We see ourselves as solving the supply issue and getting more drivers for Uber and Lyft.”
As Zephyr Car, the company charged a flat $50 rate on weekdays and $75 on weekends for cars financed with personal credit, then family and friends, and finally through Craigslist.
Now with several partnerships, which Breeze co-founders declined to name, the company has improved its environmentally friendly offerings by acquiring new hybrid or fuel-efficient sedans. It has a fleet of 25 vehicles, which the company says is growing 20 percent per week.
“Being able to acquire cars without any initial cash outlay is paramount because we have been bootstrapping thus far,” said co-founder Ned Ryan, 25. The company hopes to raise venture capital and angel funding in the near future.
Breeze aims to pair two people per car whose schedules allow for the vehicle to be used seven days a week. Target members belong to no particular demographic, and range from college students to professionals looking to make up to $35 an hour.
San Francisco resident Luke George, 45, who is interviewing for jobs in the Internet commerce industry, called Breeze a “godsend.”
“I have a car, but it is a 1970s classic and doesn’t qualify for Uber,” he said. “Breeze was a way for me to jump in right away and earn some money without having to buy my own car.”
Although Breeze only generates about $50 per vehicle per day, Ryan said he sees “strong revenue growth” if cars are utilized 24/7 as the fleet grows. Members are required to have been approved as drivers for Uber or Lyft, at a minimum.
On Friday afternoon, Breeze operations guru Chris Yang conducted an orientation for five prospective members at the startup’s co-working space at Sandbox Suites on 10th Street.
The four men and one woman, one in a button-down shirt and others in sweatshirts, listened as Yang said, “What we found is if you do both [Uber and Lyft], you can get 30 percent more money. When you catch one, you turn the other one off.”
After the session, one attendee, Oakland resident Kris Luster, 23, said he was still thinking about whether to become a member, and mulled over the deposit fee of a few hundred dollars collected over four months.
“It gets a little cloudy with all the companies on the same team,” Luster said, referring to working for several transportation network companies simultaneously. “You’ve got to take everything with a grain of salt.”
Though Breeze has no formal partnership with transportation network companies, Pang said, “we are approved by them and they’ve all given us the green light to give them drivers.”
The rebranding to Breeze was done in part because “many drivers had trouble pronouncing ‘Zephyr,’” said Pang, who also started driving for DeSoto Cab Co. two months ago.
“Breeze embodies how simple and easy it is to become a member of our community,” he said. “And so hopefully it’s easier to pronounce and spell for folks as well.”
But DeSoto Cab Company Owner and President Hansu Kim claimed Breeze’s model is “based on a non-controversial, illegal practice.” The red flag, he said, is that leasing vehicles goes against the definition of transportation network companies.
“One thing that is absolutely clear is that TNC’s were for people using personal vehicles, not for people to lease out vehicles to people where it’s not their personal car,” Kim explained. “So the bottom line is this business plan is completely against the law. If they want to start a leasing business, they can do it as a taxi company or a limousine company.”
Kim added his cab company hired Pang without knowing that he is a co-founder of Breeze.
"If he is doing something illegal in transportation that affects my business, I'm not going to allow that," Kim said.
Pang said that initial legality concerns have been quelled and Breeze requires full insurance coverage – liability in excess of the state minimum.