Greening the Car-Rental Experience with MPG Car Rental’s Steve Vahidi

December 3, 2014

JOHN SHEGERIAN: Welcome to another edition of Green is Good. We’re so honored to have with us today Steve Vahidi. He’s the President of MPG Car Rental. You can find them at mpgcarrental.com. Welcome to Green is Good, Steve. STEVE VAHIDI: Thank you, John. JOHN SHEGERIAN: Hey, Steve, before we get talking about your green rental car company called MPG Car Rental, can you share a little bit about your journey? How did you even come up with this idea? Share a little bit about your back story leading up to the founding of this car rental company. STEVE VAHIDI: Sure. Twenty years ago, my family started a car rental company called California Rent-A-Car. We’re based out of West LA. When I finished college, I kind of came onboard and helped the family business out. It’s been about 10 years now. A few years ago, I came up with the idea of going green. We turned one of our California Rent-A-Car locations into an all-green location, and we called it MPG Car Rental. We just wanted to make renting green cool and affordable because most places were charging $120 a car for a Prius, so we came up with the idea of how can we make this affordable for clients? What we started doing was using these Priuses and hybrids that we had for California Rent-A-Car, and slowly, after a year, year-and-a-half of using it, we put older model hybrids at $30 a day, $25 a day, to make it affordable for clients to rent green cars. As time went on and our first 24 months, it took a lot to figure out what our niche is. It’s been so responsive. We’re the highest-rated reviewed car rental company in Los Angeles on Yelp, for example. People have just been excited about it. I have people e-mailing me all the time asking me when we’re opening up in San Francisco and Dallas. We’re still growing, and it’s still the beginning parts of expanding the business, but we love the idea, we love the concept, and it’s been good. JOHN SHEGERIAN: Mom and dad must be proud. STEVE VAHIDI: They are. They are proud. JOHN SHEGERIAN: That’s awesome. This is great. You take their original concept and you grow it into one of the hottest spaces in the world right now, sustainability. Good for you. We’re here at the Green Festivals today, taping the show in Los Angeles. Your MPG Car Rental is in West LA also, correct? STEVE VAHIDI: It’s not. It’s actually in Venice, California. We’re linking to Venice, which is a pretty green part of town. We’re technically in the city of Venice. JOHN SHEGERIAN: Gotcha, but it serves the LA region. Whether you’re in Santa Monica or downtown, it’s accessible to your car rental company and people can rent your green cars in the greater LA area. STEVE VAHIDI: We actually deliver cars, so if someone needs a rental car in Hollywood or needs to be picked up from LAX, we actually do provide a service for that. JOHN SHEGERIAN: That’s wonderful. That’s a real service. STEVE VAHIDI: Yeah, people love the free pick-up and drop-off service. JOHN SHEGERIAN: Wow. I’ve never heard of that, actually. What other things make your car rental company different from others out there? STEVE VAHIDI: We only rent hybrids, electric cars and clean diesels. We’re a little limited on the inventory that we have because we’re staying so true to being green, carrying cars that are non-green. If we carry an SUV, it will be a hybrid SUV. If we carry an electric car, we have the Tesla, we have the Chevy Volt, the Nissan LEAF, We’re just trying to figure out what’s cool out there and what’s good for the environment, and do a lot of research on what types of cars are coming out. We just got a BMW i3, and that car, I think, has 25% recyclable goods inside of the car. That’s the way they created the BMW i3. We have the Tesla Model S. We were actually the first car rental company to get the Model S. We were Tesla’s guinea pig on seeing if the Tesla would be a good rental car. It’s been great. Tesla, at one point, was just directly referring clients to us for them to test drive it and see if people like the experience of driving a Tesla for a few days. A lot of people would go and test drive for the weekend and go out and buy one on Monday or Tuesday and put an order in. JOHN SHEGERIAN: You put a big smile on Elon Musk’s face, huh? STEVE VAHIDI: Absolutely. JOHN SHEGERIAN: That’s awesome. How many cars are in your fleet? STEVE VAHIDI: We have about 100 cars in our fleet. We’re continuously growing. We’ve doubled our fleet every year for the last four years. JOHN SHEGERIAN: You know what the typical lease rates are since it’s a family business and this is in your blood. Are the cars staying at the industry average leased enough, or is it above average or slightly below? What’s the average? How are you doing in terms of what industry averages are for your fleet to be leased? STEVE VAHIDI: We sit at 85 to 90% utilization. JOHN SHEGERIAN: That’s high for the industry? STEVE VAHIDI: Yeah, that is very high for the industry. Most companies are at 65 to 70%. Again, we just keep on buying cars and clients keep on supporting us. It’s been great. JOHN SHEGERIAN: What are the hot cars on the lot right now? What are the two or three hot cars on the lot right now that you’re getting lots of calls and e-mails about? STEVE VAHIDI: Electric cars are really growing, especially being in the Santa Monica/Venice area, a lot of people love electric cars, they love going green. We’re in the right target market for what we’re doing. The Tesla Model S has been a great car and people love it. The BMW i3, again, another electric car that’s been great. The Chevy Volt actually, another electric car that also qualifies for the carpool sticker, so a lot of people that are doing long distance traveling like to rent that car and drive to San Diego and back on a one-day trip. It just makes commuting a little bit easier. JOHN SHEGERIAN: Let’s talk about that. I just learned about that this weekend. My 21-year-old son just got a Ford Fusion Energi, the electric version. He taught me about these stickers that I didn’t even know anything about. If the sticker is on the car, tell the story, Steve. STEVE VAHIDI: You can drive in the carpool lane by yourself. JOHN SHEGERIAN: And, also park in Santa Monica and other cities? STEVE VAHIDI: There are some cities that allow free parking. JOHN SHEGERIAN: Unbelievable. STEVE VAHIDI: LAX, at one point, was offering a month of free parking with the Tesla Model S. If you own a Tesla and you do a lot of traveling, literally go and drop the car off at a parking structure that normally costs $30 a day, and you get free parking at LAX. You can charge your car, so when you come back, you can just hop in your car with a full tank of energy and drive home and it won’t cost you a dime. JOHN SHEGERIAN: And, you can do street parking by meters in Santa Monica for free. STEVE VAHIDI: Absolutely. JOHN SHEGERIAN: Unbelievable. That is just so great. For our listeners who just joined us, we’re so excited to have Steve Vahidi with us. He’s an entrepreneur and he’s the President of MPG Car Rental. You can find them at mpgcarrental.com. Let’s talk a little bit about the Green Festivals. Is this your first Green Festival? STEVE VAHIDI: I’ve attended, but this is the first year we’ve actually sponsored and had an exhibit here, but it is our first year as a business to come and exhibit here. JOHN SHEGERIAN: Talk about two sides of that coin at the Green Festivals. For our listeners out there that want to come to other Green Festivals, is it fun to go as a consumer? And, then also talk about it as an entrepreneur. Has it been valuable for you in terms of visibility, as an entrepreneur trying to get more visibility for your services and products? STEVE VAHIDI: I’ve been walking around the last couple days just munching at things and looking around and seeing different exhibits. It’s just so interesting how people are innovating their own twists on how to go green. It’s great. I think it’s good for the environment, it’s good for the economy, it creates jobs. It’s really a win-win situation. As a person that’s displaying here for the first time, we’ve had an amazing response to what we’re doing. People have come up to us and tried to create partnerships. There was actually an organization that I talked to today about planting trees. We’re thinking of partnering up with this company, and they’re actually called Trees for the Future. What we’re planning to do is for every rental that we have, we want to donate some money to put a tree in. We’ve met a lot of partners, and it’s been great. It’s been very responsive. JOHN SHEGERIAN: What a great story, in the city of cars, to have the largest green hybrid rental car agency out there. Let’s just go over this again. Your service is not only cool and green because of the cars that you rent, but for our listeners who just tuned in, you’ll also deliver the cars to them if they’re in a hotel or at the airport or something like that and they want to hire your service, you’ll deliver the car to them. STEVE VAHIDI: We’re 3.5 miles away from LAX, so we pick up clients all the time from LAX. They just land and call us, and we’ll send a driver to go pick them up. It’s a lot easier than hopping on a shuttle and going to a big national chain, and it’s a lot more affordable because when you go green, not only are you saving money on the rental, you’re also saving money on the gas. JOHN SHEGERIAN: Speaking on the rental, let’s go over the price range again. Is it relatively comparable to renting traditional cars, less or more? How are the prices of your 100 or so fleet? STEVE VAHIDI: When I started this concept, I wanted to make it affordable. If it wasn’t affordable, it just wouldn’t work out. We are actually, at time, less expensive than the big national chains are with their compact and mid-sized cars. So, you can rent a Prius C, for example, at $35 a day from us. Most national chains charge about $30 to $40 a day for that same exact category car, but not a hybrid. So, we’ve made it affordable, and that was my ultimate goal, was to be able to lower prices so more people can go green and rent eco-friendly cars. Affordability is very important to us. JOHN SHEGERIAN: Steve, you’re a young guy, and I’m sure when you go to bed at night, you have some big dreams. Where are you going to take MPG Car Rental? STEVE VAHIDI: I would love for this to become a national chain. I would love to be able to offer green cars to every city in the world if I could. Ultimately, I would like to keep on growing the business and give people the opportunity to go green. Again, I’ve had people e-mail me and contact me, asking me when I’m going to open up in San Francisco and when I’m going to open up in their city. It’s been really good. JOHN SHEGERIAN: And, why not you? And why not MPG? STEVE VAHIDI: Why not us? Absolutely. JOHN SHEGERIAN: You should. Steve, thank you for your time today here at today’s Green Festivals in Los Angeles. We wish you continued success. Thank you for starting MPG Car Rental. For our listeners out there who would like to find or rent a car from Steve’s great company, you go to www.mpgcarrental.com. Steve, thank you for making the world a better place. You are truly living proof that green is good. STEVE VAHIDI: Thank you, John.