RideShare Rental Inc (OTCMKT:YAYO), formerly YayYo Inc, a provider of vehicles to the rideshare and delivery gig economy, announced that ACME Auto Leasing LLC has increased its line of credit to the company’s subsidiary Rideshare Car Rentals LLC by $2 million
The extension will be used to fund additional passenger vehicles for the rideshare industry, including the purchase of transit high-top cargo vans for what’s known as last-mile delivery logistics, the company said. Rideshare Rental has entered a leasing arrangement for the vans with PDQ Logistics LLC, a company of which CEO Ramy El-Batrawi is the managing member.
The bulk of the funds will be allocated towards the purchase of electric vehicles (EV) to launch RSR's EV strategy for the rideshare space.
READ: RideShare Rental moving HQ from Hollywood to larger facility in Beverly Hills as operations expand
"The higher line of credit will help us to ramp up our fleet and continue to rapidly deploy new vehicles as we strategically build out our expansion,” El-Batrawi said in a statement. “Demand for vehicles continues to outpace supply and we’re excited to be able to meet the demand of rideshare drivers. A supply of new cars and vans is scheduled to begin delivery this week and continue through the rest of January and February.”
The additional credit is just the beginning of RideShare’s push into the EV space, El-Batrawi said, and more financings like this can be expected in the future. Over the next 18 months, the company plans to transition to nearly exclusively EVs as it ramps up its supply of cars.
Ridesharing giants Uber Technologies Inc (NYSE:UBER) and Lyft Inc (NASDAQ:LYFT) have each announced plans to be entirely electric by the end of the decade. That means demand for EVs is going to rise, El-Batrawi said, and RideShare Rental wants to be there to meet it.
“The expansion of Rideshare Rental into electric vehicles not only further diversifies the company, it takes us into the next generation of rideshare,” El-Batrawi said. “Deploying electric vehicles instead of gasoline-powered models for services like Uber and Lyft provides obvious climate benefits ... At present, there are a limited number of electric vehicles in the ride-hailing fleets to satisfy the rapidly growing demand. We intend to be in the vanguard of meeting this demand while at the same time helping to realize such important environmental benefits.”
One obstacle the ridesharing industry faces is that most cars are driver-owned, and most drivers don’t own EVs. By renting its cars to drivers, RideShare Rental can deliver EVs to the gig economy at a much lower up-front cost to drivers.
In several markets, RideShare is experiencing greater than 95% utilization of its vehicles, the company said, meaning most of the vehicles it receives are rented to divers within a short period of time, who in turn can drive for Uber, Lyft, Grubhub, Postmates, and others
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