A large number of businesses have closed in the past few years due to the global economic crisis. The paradox is when someone decides to close shop even though the cash keeps coming in and the company has already started expanding.
But that’s exactly what happened to San Francisco-based luxury car sharing company HiGear after repeated thefts made its owners realize that they couldn’t prevent criminals with falsified credentials from stealing the cars!
Unlike other peer-to-peer car sharing networks, HiGear, which focused only on high-end models and classics like the 1969 Ford Mustang and Lamborghini Gallardo, did not use immobilizers or an iPhone door unlocking system.
The company instead relied on the old-fashioned way of making reservations for its members who paid a security deposit in addition to the rental fee (US$125-600) and insurance.
Although it did run background checks on members, checking their driving licenses and records, this did not prove enough to prevent a criminal ring from stealing four vehicles with a total value of US$400,000.
Even though all vehicles were insured and some were recovered by the police, the company, which had already expanded to Los Angeles and was planning additional operations in Portland and San Diego, realized that it couldn’t prevent the thefts from happening again.
Therefore a month after the incidents and even though up to this point HiGear was flourishing, the owners decided to shut it down and informed their customers of their decision via e-mail.
Story References: Cnet & Techcrunch
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