A Tesla listed for rent on the HiGear website.
The idea seemed to have enormous potential: give automotive wannabes the opportunity to drive the cars of their dreams. Unfortunately for San Francisco-based start-up HiGear, the company also gave a bunch of car thieves to steal the cars of their dreams.
The company offered a distinctive twist on the growing car-sharing phenomenon. While most of the other players in the emerging field, such as ZipCar, focus on basic transportation, HiGear went to the other extreme, lining up luxury and exotic models from the likes of Aston Martin, BMW, Bentley and even a Tesla.
After going through a seemingly careful sign-up process members of the service would pay anywhere from $125 to $600 – with the average being $410 a day, according to company officials – plus insurance. The vehicles they would rent were actually owned by individuals, including co-founder Murtaza Hussein’s BMW Z4, rather than company-owned.
Unfortunately for HiGear, a sophisticated car theft ring figured out how to game the system, using stolen identities and credit cards to line up rentals and then make off with four cars the company says were worth $400,000.
Despite signing up 5,000 members and listing 300 cars in several cities, including San Francisco and Los Angeles, with Portland and San Diego on tap, HiGear has announced it is closing down.
The situation, said Murtaza and partner Ali Moiz, “is untenable.” In a letter sent to those members, they said they do not think it is possible to prevent further theft problems.
“This incident exposed us to the worst-case risks inherent in our service. Even by improving security and processes, we are not completely sure we can prevent an incident of this sort from happening again given the peer-to-peer nature of our service,” they wrote.
It is one thing when thieves hack into an Amazon.com but with the typical HiGear vehicle worth $70,000, “HiGear needs to be shut down to prevent organized crime from taking advantage of the service again.”
Police have recovered several of the stolen vehicles while insurance is paying off on the others.
It remains to be seen if a similar problem will afflict other car-sharing firms, though HiGear officials say they believe the problem was unique to their service because of the high value of the cars it offered for rent.