Shared Economy Start-up Uses AI-based Compatibility Testing for Online Rental Marketplace
Seeking the next big idea in the “shared economy” pioneered by Uber and Airbnb – while also incorporating compatibility matching capabilities of dating and social media sites – an AI newbie has put forth an online business model based on renting items many of us own – party supplies, power tools, wheelchairs, lawn equipment, video gear – to those who’d rather rent than buy.
It’s been observed that a power drill, to take a common example, is only used by its owner for 12 minutes per year. So it makes eminent sense to rent a drill for a few dollars rather than buying one, right? Actually, maybe not. While a rental marketplace seems like an obvious business model, getting it to work in the real world has been another matter. For one thing, if renting a drill involves traveling any significant distance then many people would just as soon buy one and be done with it. For another, if the owner and renter don’t get along it lessens the chances that either one will become return customers.
Rntus.com is attempting to overcome these challenges by developing a data-driven infrastructure that combines AWS’s auto-scaling compute and storage infrastructure with a home-grown, inference-based AI capability that makes using the site seem like signing up for Match.com or eHarmony. The idea, according to founder and CEO Elias Chavando, is to avoid the fraction-of-a-penny-per-query that Rntus.com would otherwise pay AWS for AI functionality, charges that would add up quickly when the start-up processes the hundreds of thousands of queries per hour it expects – and hopes – come its way.
The self-funded Los Angeles-based company came out of its pilot phase this week with the live launch of its web site and mobile marketplace app that joins owners of items and renters (Rntus.com keeps 20 percent of the transaction).
While similar online rental businesses have been tried and generally fizzled in the U.S., Chavando told EnterpriseTech that Rntus.com goes a step further by taking pains to find owner/renter compatibility, with the intent of shepherding successful rental transactions that keep participants coming back.
Compatibility scores are based on a number of individual characteristics, personal tastes and interests, gleaned from Facebook, Instagram and other social media sites. Residential location, of course, is a primary consideration so that renters can find owners in close proximity. Similarity of personal tastes and interests also help assure that rental interactions are conducted on similar wavelengths.
“If someone’s social media profile shows that they ride a Harley-Davidson, is a fan of pro wrestling and follows the pages of local marijuana dispensaries,” said a tongue-in-cheek Chavando, that person wouldn’t necessarily be matched up with a local parish priest, rabbi or member of the Church of Latter Day Saints. So unless the Harley rider and the priest live on the same street and the next nearest owner person renting the desired item is several miles away, the biker and the priest won’t be matched.
Prior to Rentus.com, Chavando served as a director at Autotrader, an automotive marketplace, and consulted for several multi-national classified marketplaces and companies, sports teams and associations in Europe and South Africa. While rental marketplaces, such as eRental and Zilok, have succeeded in Europe, Chavando said he and his colleagues in the three-person start-up have thought hard about why attempts in the U.S. have stumbled. For one thing, there is the matter of accountability.
“What we found is that if the transaction goes well, say for a sale of an item on Craigslist, then Craigslist is thought of as a great platform,” he said. “But if it goes badly nobody blames the person selling, renting or buying the item. It’s blamed on the platform. So we believe a people-matching mechanism is key… This will help make the transaction more pleasant and raise the likelihood of a successful transaction. This is the part (of our strategy) that excites us.”
In pulling together a composite profile of owners and renters, the first thing Rntus.com wants to know is if you exist. Early on in the pilot phase of the company a Russian hacker tried to set up fake owner and renter accounts. Chavando said the scammer never penetrated the company’s servers, but the incident spurred thinking about security. As a result, the initial task of Rntus.com AI is to examine the social media footprint of platform registrants looking for indications of fraud. One earmark of illegitimacy: people with fewer than 30 Facebook friends may not be real; they aren’t allowed to register.
Of those attempting to sign up for the platform Rntus.com asks for residential location, religion, preferred movie type and place of birth. This information, combined with whom and what you follow on Facebook or Twitter, is used to fill out customer profiles and to find character commonalities. All the data in its various formats is joined together in a database and is used by the company’s home-grown AI algorithms.
Rntus.com has 10 categories of items to rent on its Los Angles marketplace site with a total inventory of 75,000 objects “and growing every day,” according to Chavando. The most popular category is Do It Yourself (power tools, carpet cleaners, etc.) but, it being L.A., video equipment also is very popular. This category includes a movie camera from Red Digital Cinema Camera Co. that retails for $150,000. Rental price: $1500 a day.
Chavando said most items are covered by a simple damage waiver, with the renter placing a security deposit for the replacement value of the item (owners and renters are encouraged to take pre- and post-rental photos). But expensive items may be covered by separate insurance policies.
In the incubation phase for the last two years, Rntus.com ran a pilot project in March of last year in L.A., and with the live launch this week the company will refine the site in Los Angeles for the next six to eight months before moving into Cleveland and then Cincinnati. Eventually, Chavando said, Rntus.com has its sights on 35 markets in the U.S. and Europe over the next five years.