Here's a tale of how you don't run a mobility startup, unless you don't care about the safety of your customers and your public image.
Berlin car sharing startup Miles is demanding thousands of Euros from customers whose car was stolen, claiming that damages caused by thieves while driving the vehicles should be covered by their users.
Turns out, Miles has always been leasing their entire car fleet, while renting it through a white-label platform they had no control over at least until recently. As a result, they failed to implement basic industry-standard safety mechanism, such as an immobilizer, that all of their competitors have been using for years. This, despite their telematics providers all offer the immobilizer as a feature.
In one case they're threatening to sue a customer for 13,000€, during a pandemic. The customer is a bar owner, and faces bankruptcy as a result. In that specific case, Miles Mobility admitted that the car could be opened and turned on hours after the user had ended the rent.
Edit, to add some elements:
- don't miss the part about how customer support suggested not to call the police. Twice.
- it's totally unclear how they are not covered by their insurance, and how can their investors be fine with all this (lead investor is Lukasz Gadowski of Delivery Hero fame, and TeamEurope Ventures founder).
The good news is that unlike in many other financial service disasters (e.g. with financial services), he isn't actually out the money, nor blocked from something particularly critical (I'm sure there are other carsharing services he can use).
So he can at least ignore them until they actually sue.
Given that it's a German company I'm going to guess it was supposed to be an unlucky mixture of German and English given that drive by, in German "vorbeifahren" just has the literal meaning of "passing by".
I had an accident with a vehicle from one of these car sharing companies in Berlin. The company demanded 11,000€. I think that was 2017 or 2018.
Supposedly I broke my contract by not following protocol after the accident and therefore my insurance was nil.
Suffice to say I did. I had four witnesses, date & time & incident number of the police report, yadayadayada.
I got a lawyer. The whole thing went nowhere. I.e. I didn't pay, except for the lawyer who wrote exactly one letter to them.
But I was blocked to use their vehicles until that company and another joined into a new enterprise.
Upon which my record was magically wiped clean – I could use the part of the new fleet belonging to the vendor whose car I had had the accident with again.
Ah, the merits of database mergers ...
The issue all these car sharing companies have is their insurance.
When these businesses started they needed insurance. What happened was that all the car insurance companies declined. Because how do you calculate the insurance if the driver changes all the time?
So what these companies did was open their own insurance companies. While these are separate business entities it boils down to any damages coming out of their pockets. They have a vested interest in finding you in breach of their TOS so you are not covered by (their) insurance any more.
How do I know? The lawyer I got was an expert in those cases. I was not the first of his clients with this issue.
I can suggest him to anyone in Berlin who runs into such an issue.
P.S.: A Canadian friend of mine had exactly the same happen to them there. Accident with car2go. Car2go purports breach of contract and demands full damages. He gets a lawyer. The thing goes nowhere. But he is since blocked from using car2go. Go figure.
I had a similar problem with a car rental agency 2 years back in Netherlands. A small scratch and they were coming after me with 2k euros in damages. I had their CDW, but they refused to acknowledge it stating some TOS nonsense. Took me several months of constantly calling their office (they never reply to emails) to settle for a tenth of the cost. Took me another month to get a the receipt and written confirmation that the case is now closed & settled.
The lesson I learned here is to use my Credit Cards CDW and deny the rentals insurance always.
Tbh, I feel that most car rental agencies make their profits through these crazy insurance schemes.
German companies have a reputation for not giving a shit about customers and customer support is virtually non-existent. For example you are quite often required to cancel your online subscriptions by letters sent by post 1-3 months in advance.
Why don't people just stop payment? I remember when an insurance company tried to not let me cancel. I copied some boilerplate termination letter from the internet, and blocked payments from my card. They cancelled very quickly. Then again this is in the USA, so Germany may work differently.
In Germany if you have a contract which binds you for a certain amount of time, blocking the payment will just result in letters, extra fees and eventually collection agencies and a state bailiff. This will not just put a stain on your credit score but might also get you into legal trouble.
There are multiple reasons. You often don’t subscribe by credit card but by bank account (you authorize them to pull money from your account). This means you cannot cancel, only the company can cancel. If you want to cancel you must hire a 150€/h lawyer to take them to court and fight a lengthy lawsuit that you will lose. If you did subscribe by credit card and block it, they will hunt you down to the last cent. They have the lawyers and debt collectors while you don’t.
Sure, debt doesn't just go away. But there's no loan, so why are you talking about debt? The grandparent comment is talking about online subscriptions. If you stop paying your your subscription, then they'll terminate service. Likewise if you stop paying your insurance premium you won't be able to file any claims. But unpaid subscriptions don't magically become debt.
If you don't pay your electricity or water bill then that's a different story because utilities are not allowed to just stop service for things people's lives depend on. But utilities are more heavily regulated than normal subscriptions. For the most part, if a company tries to keep you from terminating a subscription and you say, "well, I'm not paying anymore. Do you still want to keep providing the service for free?" it's an effective way to get them to terminate service.
So if you block your Netflix payments you really think there going to send debt collectors? No, they'd lose more money on hiring a collector than they'd gain back from recovering one month's subscription.
They probably could and I'm assuming they would just sell it to a collections agency for pennies on the dollar and the collections agency would just send an automated notice hoping the person would pay it. For example, I had wave internet in seattle and when I moved I obviously canceled. They screwed up setting the cancellation date though and ended up charging me the next month. Just got a collections notice for that 1 month of charges. I messaged them and apparently there is nothing they can do from their end at this point so now I'm disputing it with the collections agency.
Pretty dumb on their part if you ask me considering now I'm telling everyone not to use them because of their screwup and the fact that they would sell it to a collections agency over 1 months worth of payments.
It took me ages to cancel O2 DSL when I left Germany. I cancelled my gym membership in person at the gym many years ago - but this year 2021 I am still receiving letters, now from Inkasso where they claim I should still pay membership. I don’t even live in the country anymore, and I did cancel it in person! (That was John Reed Fitness, stay away Berliners). Call me whatever “-phobe” slur you wish, but after these experiences and more, I am never signing a contract with a German business again. No idea if AT and CH are similar.
Subscribe to our paid service? Enter your bank account in the small form here - and you're in!
Step 1: Ok, click here.
Step 2: Ok, just to make sure, you want to cancel your service?
* NO, TAKE ME BACK
Step 3 + 4 +5: Ok, we don't want anyone except you (even though you're logged in) accidentally cancelling your service for you by accident. We will send you a confirmation email, click on the link there, and then confirm on the confirmation page.
You can't tar and feather the entirety of Europe like that. I'll provide a contra-example anecdote:
Me and two other chaps formed a start up in 2000 - bog standard IT services/consultancy. Still trundling along, we won't set the world on fire but doing OK.
One of our employees is Polish, in Poland. We pay him the same as everyone else. OK he's actually now self-employed for tax purposes and Brexit but his rate is the same as our other techies. He was working remote six months before anyone had heard of SARS-CoV-2.
When we started out our first two employees were enticed away with twice their previous pay. lol. Travel shops don't pay much here in the UK. They stayed for 10 and 15 years.
One month in 20 years we had a cash flow problem. We like to keep a decent float in the bank rather than drive fast cars. I do like to sleep at night. The Directors didn't get paid that month but all staff were paid. The next few months we caught up OK. Anyone who's run a small business will know that's not bad going for cash flow. I should point out that we have never, ever had an overdraft. We do have a mortgage but that costs less than the rent we used to pay for less than half the size of building.
I could go on (sorry). Not all startups strive for the stars. A famous French bloke once memorably described Britain as a nation of shopkeepers (ie boring as fuck): I take that as a compliment.
Perhaps the underlying problem is Startup financing. Capital is hard to get, so the people who start startups aren’t technical, but rather connected business folks. So the technology is wonky, and the approaches aren’t product-first.
Afaik, flixbus was founded by former BCG consultants, sounds unusual for a Startup.
Same in Germany during the quarantine when some big chain gyms kept collecting membership fees even though the government said it's not legal to, they did it anyway.
Your only way to get justice was to take them to court, which would cost you more than the fees and since Germany doesn't have a class action lawsuits framework, each member would have to sue the gym separately.
That is extremely obnoxious. The more I learn about the German legal system, the less I like.
On the weird and semi-related flip side, our gym voluntarily cancelled ours (I planned to keep it going because it's a family business and I wasn't suffering financially) because it was cheaper for them to cancel their SaaS that they had used to track & bill members.
Working for a small European startup sucks. The company will ALWAYS find a way to shift the blame when something like this happens, not to mention every EU startup I've worked for gets away with late payments and shady financial moves (the worst offender was a German company I worked for early in my career).
The EU makes a big effort to harmonize law across countries, so there might be some sense to talk about European startup scene. Though, of course German-speaking countries scene would have its own different as Germany itself.
Late payment is not limited to European startups. Even large European companies do it. My personal undersampled data indicates a negative correlation between latitude and days until payment. South of 45 degrees, expect 180 days regardless of terms.
The app is not even cool. Is a React Native contraption developed externally.
They switched to it last summer, exactly around the time when most of the vehicles got stolen, by the way.
Before that they were using a different app connected to a white label solution provided by WunderMobility.
The standards for "startups" in Germany are reeeally low. Most of them seem to get founded with the motivation "I want to be the boss of a startup and / or get rich quick", not "I want to do something well".
best comment so far.
Fun thing is, before rebranding into this ungooglable name, they were called "Driveby", which was way more memorable and easily googlable. They had to add "mobility" to everything to be found. Even on twitter they're "Miles Mobility".
A few seconds ago while looking up the various definitions I found out that a German mile is apparently about 7500 meters (with three different definitions existing, all around that length). There are about 60 other definitions in Europe.
I would have expected it to be most closely associated with the roman mile, which is around 1.5 km.
Given that this is the very first time I've heard about the German mile, I would assume that <1% of the population knows about it, and they'd probably consider a "mile" either the US thing if they are familiar with it due to travel, or most likely with "some archaic unit that's somewhere around 1.5 or 2 kilometers long, no idea, why would you use that".
The first association that I (as a native German speaker) when I read "Miles" in the German context wasn't distance units - I interpreted it as a given name of English origin.
> Given that this is the very first time I've heard about the German mile, I would assume that <1% of the population knows about it, and they'd probably consider a "mile" either the US thing if they are familiar with it due to travel, or most likely with "some archaic unit that's somewhere around 1.5 or 2 kilometers long, no idea, why would you use that".
At least in my circle of fellow native speakers, we know US culture somewhat and I think most would therefore think of the US mile. This is actually the first time I'm hearing about the German mile, as well ;)
Anybody here work for vulog? They are another European white-label car share platform provider.
I'm nearing the end of reverse engineering one of their clients android apps.
Lots of weak obfuscation, like calling certain endpoints multiple times (2-5x), which is totally useless against a MITM that can decrypt the traffic. Didn't even slow me down.
Oh, and if you miss a certain header, it will respond with invalid JSON prefixed with "".
Now I'm curious if they have immobilizers. The keys are kept in the car, so they must.
Not that I want to do anything shady, I just want to use the service without being spied on. Decompiling the app found a bunch of baidu libs, Facebook and retargeting shite. The state of commercial software, yikes.
Share Now (car2go + drive now) cars have an immobilizer regardless of the fact that they're keyless or not.
Immobilizers are a trivial tech from the 90s, the fact that these company even struggle to cover this basic safety measure is astounding
There are absolutely no words to describe the stupidity exhibited here.
What drove the founders in this market? Too stupid, lazy or incompetent to implement basic safety measures, but want to play in the ride sharing market, that is already saturated by bigger and better providers? What did they bring to the table in the first place?
I have yet to encounter a German startup that really amazes me. This isn't it.
Hate to be the devil’s advocate here, but aside from shitty PR I don’t see a lot of things that went wrong:
- As a Customer you need to make sure that your “Park” request goes through to the car and wait for the doors to lock. This might take a couple of seconds, but you can’t just press the button and run inside of a building where you might not have cell coverage at all. It’s not a RF key fob. I thing legally this would constitute negligence (Fahrlässigkeit).
- Immobilizing the car once the phone is not close to the car seems like a bad idea. It’s a privacy nightmare, b/c you’re constantly being tracked. What about tunnels or parking garages? What if the battery dies? Seems like a whole lot of problems if they were to implement this. Do any of their competitors really do this (Share Now, Sixt Share, etc.)?
- If you're closing a rental car with a key fob you check the doors twice? The app said closed, it's closed.
Even if this was the case, how could you possibly ask for the entire damages caused by a third party? The ToS only talk about the user letting someone else drive the car for negligence, but how can that encompass thieves? They're not asking for a negligence fee or a deductible, they want customers to pay for damages caused by thieves.
- Nope, an immobilizer is an industry-standard for keyfobs and digital keys alike. All competitors have it. They don't track anything. They only check the idle state of the car. I you are driving, turn off the engine on a Share Now and We Share, then open a door, the immobilizer kicks in. That means that you need to open the app and "unlock the engine" to keep driving. Simple, extremely effective.
In two cases reported, Miles said the cars were stolen up to 4hrs after the users left them. Even if they forgot to close them (which users deny, with witnesses) they're admitting that the car was open and available to anyone for hours.
How is that not a public safety issue and a farlässigkeit of the company?
Sounds very probable. Last investment was a 5m round led by Lukas Gadowski back in late 2019.
Talk of the town is that they've already been kept alive multiple times by cash injections as private loans.
Still, they're alive enough to mess their customers life and impose lawyers fees on them.
If you're an insurer, and you find out your client has never implemented basic safety measures that have been industry standard for 30 years (i.e. an immobilizer), I guess denying the claim takes probably minutes.