Hebron Sher remembers daydreaming in 2019 when Elon Musk promised Tesla’s cars would become robotaxis, capable of going out in the world to make money for owners. Sher was already a user of the car-sharing platform Turo, and the idea of turning a Tesla into an even bigger moneymaker was an attractive proposition.
But as years went by, Musk failed to follow through on that promise. So, in 2021, Sher assembled a small team and brought on co-founder Saimah Chaudhry to start his own company. “Hey, we’re just going to do this ourselves,” he thought at the time.
What they built was a new peer-to-peer car-sharing startup called Zevo, which is broadly similar to Turo, but focused exclusively on electric vehicles.
The Dallas-based startup has been in operation for around 10 months, and on Friday it announced it has raised $6 million in funding as it looks to expand across more major U.S. cities. Sher told TechCrunch that Zevo is already tracking over $8 million in annualized recurring revenue (ARR), and has a wait list of more than 3,500 customers — all with essentially no marketing to date.
On the renter side, an overwhelming portion of that interest is coming from gig workers, Sher said. Some 90% of people using Zevo to rent an EV are doing so to ferry passengers on Uber or Lyft, or make DoorDash deliveries.
Sher said he thinks Zevo has “the secret sauce on how to make car sharing very lucrative for the host and very affordable for the renter.”
So what’s the secret sauce?
“It’s gonna sound crazy, but the secret sauce is not raising hundreds and hundreds of millions of dollars to build something that can be a powerful marketplace,” Sher said. “We very intentionally raised private capital. We rejected VC capital for that reason. I didn’t want to be on a 12-month to 18-month runway of ‘spend, spend, spend, spend,’ which is how corporate America likes to do things in this world.”
Bootstrapping Zevo allowed Sher to gather good engineers, develop a strong go-to-market strategy, and cause “true disruption,” he said.
By keeping things focused, Sher said Zevo is able to send more money to the vehicle owners than they’d get on platforms like Turo.
Sher also talked up Zevo’s “contactless” process, which allows owners and renters to share a car without having to hand over keys or key cards.
That’s not novel — plenty of other car-sharing services have adopted a similar contactless process. But Sher argued that Zevo’s contactless nature is front-and-center because the service only uses EVs, which tend to be more technologically capable and therefore easier to integrate in a smartphone app.
This connectivity also makes it easier to integrate other important pieces of the car-sharing equation, like commercial insurance, Sher said. Removing red tape like that is what has made the platform so attractive to gig workers, he said, especially since many of them don’t have the credit scores required by larger car-sharing or rental services. Sher said one user likened Zevo to the MetroPCS of renting cars.
“There’s [usually] a lot of red tape: insurance cards, incidentals, tolls, supercharging, invoices, reimbursements. We’ve been able to really automate all of that,” he said. Add in that EVs tend to require less maintenance — which means more uptime — and it’s easy to understand why gig workers are interested.
The result of all this is that, in the early going, Zevo is seeing a median rental of around 80 days. Hosts, meanwhile, can make back between 35% and 65% of the cost of their car in just a year, according to Sher. Since 90% of the vehicles on the platform are Teslas, that has Sher feeling pretty confident that he’s been able to find a different way to deliver on Musk’s promise from 2019.
Of course, Tesla is now finally on the precipice of launching a robotaxi service in Austin, Texas, and potentially other U.S. cities later this year. There are many unanswered questions about how that service will operate, whether Tesla’s self-driving software will perform safely, and how easy it will be for owners to put their cars on the network. But it does seem like Tesla is closer than ever to putting Musk’s vision to the test.
That doesn’t worry Sher, though. He said Zevo is laser-focused on disrupting car-sharing, and doesn’t want to mess with the ride-hailing piece that Tesla is after. He thinks Zevo can break $100 million ARR with a staff of just 30 people and minimal future investment.
Even if Tesla were able to eat into the gig economy with a fleet of robotaxis — which remains a very big if — Sher said Musk would need to find a way to make millions more cars than it already does to meet the total demand for rides and deliveries.
“There’s enough for everybody here on the table,” he said.