When airport car-sharing service FlightCar launched in 2013, the premise was simple: You get free parking, someone else gets to rent your car while you’re abroad, and you make money off the rental. The idea was good enough for the company to net $5.5 million in seed money.
But apparently, it wasn’t good enough to stay afloat.
FlightCar closed July 14, 2016, and sold its technology platform to Mercedes-Benz Research & Development North America, after a surprise announcement to staff. For tech workers, the sudden demise of a company many thought was about to expand after earlier problems underscores the risks of working for startups.+
“I [am] completely stunned and at a risk of losing what’s still owed to me,” one former employee told Digital Trends via email. The employee asked to remain anonymous, as details of settlements are still being worked out. “Many great and talented people lost their jobs with no notice, while the 22-year-old CEO without basic life skills gets to move on despite a lack of actual business skills or even the most basic of an education.”
“I know the stories of many of my former teammates and have shed tears for many of them over the past few days,” he said.
Forbes, among the first sites to report on the company’s shut down, noted that “some” of FlightCar’s more than 90 employees will move on to jobs at Mercedes-Benz.
“While this is technically correct, that ‘some’ is two people, the former employee told Digital Trends.
Here’s what happened, in his own words:
Let me start by saying I am not one to complain or gripe, and that I am not at all angry about my loss. I am however angry about the way my team was treated.
I joined FlightCar back in January, despite have some worries and concerns over the reviews from both employees and guests. I was painted a picture by the former VP of Operations that FlightCar was looking to expand. This was echoed by everyone up the ladder including CEO Rujul [Zaparde]. We have all been told that there was another round of funding coming up and that we were going to re-brand. We updated all of the locations, rolled out new initiatives and paid an ungodly amount of money on these updates… And they were fantastic. About a month and a half ago I spoke directly with Rujul, who assured me that I would continue to move … into higher roles and that we were going to be doubling in size “very soon.”
At 4:51 PM (PST) all managers received an email saying, “Managers YOU MUST BE ON THE ALL HANDS CALL TODAY AT 5PM. DO NOT MISS IT.” Rujul proceeded to tell us that FlightCar had been purchased by M-B. He gave us a moment to celebrate that we, as a team, had really pulled this off and put together something great. Then, after some celebration, Rujul announced that all twelve locations would be closing down immediately. At one point on the call Rujul had said, when responding to another managers comment about having six kids and now what is he supposed to do, “I know this is hard on everyone. I am not making anything on this either.” He then went on to explain that there was another offer, “that would have left all twelve locations open” but it just didn’t work. After that we were told to call all our teammates and let them know that they were no longer employed by FlightCar effective immediately.
I can not stress enough how much this hurts for my people.
In the days, and weeks, leading up to this announcement Rujul continued to hire people to fill roles. One of these people relocated, at their own expense, across the country because when he interviewed with Rujul he was assured that FlightCar was growing. After only four days of work he was let go with everyone else.
Another candidate, who was ensured of the same stability and growth, left his job that paid over six figures, took a pay-cut, and was to start this coming Monday July 18th. He too was left without a job.
I can not stress [enough] how much this hurts for my people. How much looking at a press statement or article, such as the one in Forbes, that says some of the 90 employees are moving over, bothers many of us. For me, this is not about me as much as it is about my team. I … tirelessly worked to make my location one of the best in the company, and I did that. I did exactly what was asked of me and then some. Just to be told that I am out of a job, that my team is out of a job… that’s why I am reaching out and sharing this with you.
Perhaps the message here is that you need to get the people-part right from the get-go, or you might not be around to reap the benefits of a maturing business. Customer service may have been FlightCar’s downfall.
FlightCar’s business model took the sharing model to airports. When you took a flight, FlightCar rented your car to someone flying into the airport you’re departing from. The incoming traveler would get a clean, late model car during his or her stay for less than a traditional rental car. You wouldn’t have to pay airport parking fees, and FlightCar put your car to work earning you money while you were on your trip.
FlightCar started off strong with investment backing from celebrities, individual investors, and institution fund sources. The company started in 2012 and expanded to 17 locations by 2015. It didn’t age well, however, and negative customer service reviews spoiled the chances for positive word of mouth. The company laid off some members of the executive team, along with a large number of its staff, and closed five locations in late 2015. FlightCar brought in new top talent to redesign the business and launched a new application suite to handle back-end and front-end operations.
— FlightCar (@FlightCar) May 19, 2016
The changes came too late.
In a farewell message to customers on the FlightCar website — all that’s left of the site, really — the company announced its closing. It also mentioned the sale of FlightCar’s technology platform to Mercedes-Benz Research & Development North America (MBRDNA). The new addition to M-B will be part of the company’s innovation lab for mobility services.
Perhaps Mercedes will adopt a version of the FlightCar model for ridesharing services for its own fleet or work out a similar model with people who buy or lease Mercedes or Smart cars.
For tech workers, the reminder that working for tech startups is risky just got real again.
Updated on 7-17-16 by Bruce Brown: Added in perspective on the closure from a former FlightCar employee.