Transportation company Uber has popularized the “sharing economy” in which a web-based app can transform personal vehicles into cabs and allows users to become both buyers and sellers in a single marketplace.
KWIPPED, a U.S. startup, intends to revolutionize equipment rentals by allowing companies in any industry — including construction — to both supply and rent equipment online.
Launched in 2014, the company offers a digital business-to-business platform to empower companies to enter the rental marketplace. Suppliers and renters can join for free, while KWIPPED monetizes interactions by charging a fee to the supplier on each successful transaction.
"North America has a well-established rental market across many industries," says Robin Salter, chief marketing officer of KWIPPED.
"However, renting equipment across most industries, construction included, is a fairly agnostic process. KWIPPED extends that functionality to anyone who wants to be part of the rental market."
Many of the early entrants into the KWIPPED marketplace are established equipment rental companies in 17 industries, including the construction, medical, laboratory and audio-visual fields.
The American Rental Association estimates that construction/industrial rental revenue will reach US$25.9 billion by the end of 2015, with Canadian rentals only boosting that total.
Salter notes that the company hopes to take a slice of that revenue by attracting a base of construction customers on either side of the market.
"In many cases a construction company never considers itself a potential supplier of surplus or unused equipment simply because the barrier to entering that market appears to be too great," says Salter.
"The cost of capital equipment is high, but the cost of unused capital equipment is even higher. The KWIPPED platform allows a contractor to make money on the side, when the equipment would normally be idle."
Contractors can also put out a single quote request and receive side-by-side offers from multiple suppliers.
"If you're a construction company looking for equipment, you can browse the inventory at any time," Salter says. "You can determine the dates when you want to rent that equipment, click and reserve it."
A messaging function allows buyers and sellers to haggle over details.
KWIPPED will also attach an electronic certificate of insurance to the transaction on behalf of the renter, if required by the equipment provider.
Salter notes that general contractors can also centralize the rental of equipment on large projects, where preferred sub-contractors may not be able to bring all of the necessary equipment to the table.
"Often, the general contractor is willing to delegate that task to the sub-contractor, and accept any mark-ups from the subs, simply to avoid the hassle of sourcing the equipment," says Salter.
"By using an online sharing economy model, general contractors can move equipment sourcing to the top of the supply chain and ensure they're paying fair market rates for equipment."
Salter says that the site owners have also considered creating exclusive marketplaces within KWIPPED, allowing members of a construction association, for example, to rent exclusively from each other.
"Construction companies in the same association would already have some familiarity and credibility with each other and that would increase their confidence in renting equipment," he says. "We're also looking into the possibility of a revenue sharing model for associations. That could see a portion of rental fees generated on transactions between members directed to the association itself."
To date KWIPPED has signed on six Canadian vendors in various industries, however, it hasn't yet snagged a construction industry representative in Canada.
Uber of course, offers more than just cars — each cab comes equipped with a driver. Salter says that KWIPPED is looking at the option of allowing providers to supply an experienced operator along with equipment.
"During our soft launch we were working with industries that provided trade show equipment, tents and bouncy castles," he says.
"The providers of some of that equipment wanted to provide operators as well. We've had a lot of recent discussions about embracing the service component. In the future that won't only be a possibility, but a probability."