Former Lehman's banker drives startup Zimride
CHICAGO (Reuters) - When John Zimmer, 26, left his job at Lehman Brothers to pursue an entrepreneurial dream in the summer of 2008, he had no idea how fortunate his timing was.
"How can you leave a sure thing…to do this risky startup?'" Zimmer recalled a family friend warning him. Just months later, Lehman collapsed into bankruptcy, part of a chain reaction that sparked the financial meltdown on Wall Street.
"Anything can happen," said Zimmer, who doesn't recall any warning bells at his former job creating commercial loans. He added it was mere restlessness that led him to enter into business with fellow entrepreneur Logan Green with an idea to change the way people think about carpooling.
Their concept, Zimride (www.zimride.com), now touts more than 300,000 users, and is gaining momentum amid broader consumer awareness for green living. The startup, which uses the Internet to match ride-seekers with those offering wheels, fueled up with a $1.2-million capital infusion last month from a VC consortium that includes Floodgate Fund and K9 Ventures. The money follows on the heels of a partnership they inked last April with Zipcar, the world's largest car-sharing company.
"Facebook and social networks have created an amazing online virtual infrastructure," said Zimmer, co-founder and COO of the three-year-old venture. "We're taking advantage of that in the physical world."
With social media underpinning the idea, it's only fitting Zimmer originally paired up with Green by way of Facebook. They met through a connection to a mutual friend, with whom Green was having a conversation about a rideshare concept.
Zimride, in fact, is not a derivation of Zimmer's name but a riff on Zimbabwe, where Green, now CEO, had observed the local propensity for ridesharing in minivan taxis.
"Seventy percent of car seats are unused. Seventy percent of our highway infrastructure is inefficient," said Zimmer, whose interest in transportation solutions was seeded at Cornell in an undergraduate class called "Green Cities." "We want to create a new transportation infrastructure."
To date, some 60 colleges and corporations, including Stanford, the University of Michigan, Walmart and Cigna, have purchased licenses allowing them to offer Zimride services to their proprietary communities. Zimmer declined to share financials but said the San Francisco-based company reached break-even last year. With a current staff of 10, it's using the new seed money to gain more traction with additional colleges and corporate users, as well as with municipalities.
Ann Miura-Ko, a partner with Floodgate who now sits on Zimride's board, said the strategy makes sense. "As chief sustainability officers become more pervasive within corporations, this will be a natural," she said.
MAKING CARPOOLING ‘SEXY'
Ridesharing ignites memories of the 60s and 70s, when hitchhiking was popular among 20-somethings who didn't think twice about thumbing a lift. Not so today, as security concerns and a general distrust of the unknown serve as deterrents.
"We don't expect people to ride with total random strangers," said Zimmer. "We're trying to connect people that work at the same company or people that go to the same school."
A Zimride profile, which requires no fee, allows a user to detail likes for music and radio, as well as general interests and preferences. The platform runs under the proprietary URLs set up for university and corporate customers and over Facebook, which gave Zimride its first big break in the form of a $250,000 grant in 2007. Public users not affiliated with those customers can also create accounts.
The security of a dedicated network seems to resonate with university administrators, who vet potential services such as Zimride against the overall safety of their student and faculty population.
"It's a lot different than reading a blank ad," said Jeff Shields, associate director of transportation services with the University of Southern California in Los Angeles. "It's been received well on campus."
USC, which signed a contract with Zimride in 2008, has about 3,000 users, he said, a trend helping to reduce excess demand for the school's 13,000 parking spots. The university's Zimride page (zimride.usc.edu/) displays a map dotted with commuting origins, including L.A., Long Beach and Pasadena, as well as travel destinations such as Palm Springs and Anaheim. Some 5.4 million miles had been logged to date, accounting for potential CO2 reduction in excess of 4.3 million pounds.
Sima Dahl, a Chicago-based social media strategist and marketing consultant, said those are the kind of results that speak to consumers with a growing sense of social responsibility.
"The Zimride brand promise is to reduce CO2 emissions, lower the annual strain on our transportation infrastructure and help everyone involved save money," Dahl said. "They just may have a shot at making carpooling sexy."
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