Google-backed RelayRides, a US-based neighbour-to-neighbour car-sharing service, has acquired rival Wheelz for an undisclosed amount, it has been reported.
Prior to the acquisition, RelayRides has raised about $13m in venture capital funding from car maker General Motors’ corporate venturing unit, GM Ventures, and search engine provider Google’s eponymous venture unit, venture capital firms Shasta Ventures and August Capital and Lisa Gransky.
Prior to the deal, Wheelz had raised nearly $16m from VC firms Felicis Ventures, Social + Capital Partnership and Fontinalis Partners and Zipcar, a car rental service acquired by peer Avis.
However, following the deal RelayRides has had to suspend its service in New York City after the New York state’s Department of Financial Services served it with a cease-and-desist letter over inadequate insurance coverage.
“Effective Thursday, May 16, and until further notice, renters will no longer be able to make reservations for New York vehicles,” the company published on its blog. “Likewise, owner vehicles listed in New York will no longer be available. Trips already in progress in New York will not be affected by this change.”
Regulation and red tape has been the thorn in the side of similar companies in New York City sending in applications, according to a Venture Beat article. The article said that in recent weeks chief executive officers ride-sharing service SideCar and taxi-hailing app Hailo slugged it out onstage about New York’s rigid regulations.