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Earlier this month we reported on Canadian car sharing service CityFlitz as their website was removed and some customers were upset that they received no response to their customer service emails regarding their security deposits. The CityFlitz service concept offered car rentals for $1/hour (CAD) and the cars were wrapped with advertising.
Today I noticed that the CityFlitz website is back with the following unfortunate message:
Please be advised that due to a number of unfortunate circumstances, including but not limited to the general financial crisis in the economy, CityFlitz Advertising Inc. is no longer solvent and is unable to continue as a viable business.
The company is considering its options, including a potential voluntary assignment filing into formal bankruptcy protection. You will be advised in due course by the bankruptcy trustee, once that decision has been made.
Please be advised that any claims which may be received by the company will not be defended or responded to.
CityFlitz Advertising Inc.
A Facebook group was setup for customers to discuss the situation. Some CityFlitz customers noted that after a call to the Better Business Bureau the company appears to have filed for bankruptcy.
We first covered Canadian-startup CityFlitz last September. We learned about the car sharing service via the FreshBooks blog. CityFlitz is a car-sharing service offered in Canada. The concept of car sharing, popularized by ZipCar, is based around many people sharing a bank of cars. I use ZipCar about once a week and think it’s a great service as they take care of everything and I just pay for the hours I use the car.
CityFlitz tried a more involved business model than ZipCar employs. CityFlitz wrapped each of their cars with advertising and then only charged members $1/day to use the car (gas not included). ZipCar has a maximum mileage per rental period while CityFlitz wants you to drive as much as possible so that the advertisements are seen around town. If you drive less than 30km per day with CityFlitz, you are charged a penalty. CityFlitz cars also come with WiFi inside the car which is pretty neat.
We received a couple of emails today about CityFlitz and that their domain name is no longer functional. When we load CityFlitz.com, we are redirected to what appears to be a web hosting provider. I’ve tried to email the company but so far no response. If I receive a response, I will update this post. In my initial review I wondered if the company would be able to sign enough advertisers to support the cars as a going concern.
In July, Esteban reported that CityFlitz was expanding to Montreal. He also noted that advertisers were paying $7,000 a month on average for advertising on the fleet of cars.
One member left a comment on our initial post noting that CityFlitz charged a security deposit of $350 (unsure if it’s CAD or USD) and the member has been unable to receive a refund. There are two additional comments on the CityFlitz Facebook page also regarding the security deposit. You can read the full terms using the Google Cache. Let’s hope this is just a temporary issue.
I like the concept that CityFlitz used and maybe the way to make it work is to charge a minimum fee for the car rentals that equals the bottom-line cost and use the advertising as the profit. I might be willing to drive around in a advertising wrapped ZipCar if I received enough of a discount to make it worthwhile.
If you have been reading CN for a while, you know that I use a ZipCar pretty regularly. I think the service rocks as I am able to grab a car when I need it and the price includes gas and insurance. While not exactly the same as having my own car, it works here in NYC. The cars range in price from $9-$16/hour.
Tonight I found (via the FreshBooks blog) a new car rental service that hopes to change the game for companies like ZipCar. CityFlitz rents cars for CAD$1/day and yes, I did say one dollar a day. CityFlitz wraps the cars with advertisements and the company calls the cars, "trendy mobile billboards". An example of a car is displayed below.
This is a very interesting model in my opinion for a number of reasons. First, unlike ZipCar which restricts your total miles per rental period, CityFlitz wants you to drive as much as you want. In fact, if you drive less than 30km per day, you are charged a penalty. Naturally the goal is to get the advertiser’s message out to the public as much as possible.
Unlike ZipCar, gas is not included and you must return the car with a full tank. CityFlitz rents Mini Coopers and Smart cars. Oh and get this, there’s free WiFi in the car – damn. Sitting in traffic, load up CN! The service is currently only available in Canada.
The concept behind CityFlitz is great and there’s only one thing that worries me with their ability to be a long-term going concern. Can they continue to sell enough ads to support the cars? No matter what, CityFlitz has people thinking and that’s always a good thing.