In some cities, the “sharing economy” is moving beyond cars — to tractors. MuniRent, a Michigan-based startup that wants to shake up the world of municipal procurement, was recently picked by Code for America’s accelerator program as one of the top five startups in the country working to improve government through technology.
Small and mid-sized cities struggle with acquiring, maintaining and paying for heavy equipment like trench diggers, street sweepers, tractors and backhoes. Rather than cities investing in such specialized equipment, MuniRent is developing an online marketplace for cities to rent bulky equipment from each other.
Alan Mond, CEO of MuniRent, said the idea was actually based on a former company of his, 1000tools.com, which he founded with friend and business partner, Julien Vanier, to let people rent tools from each other.
Vanier and Mond were attending an entrepreneur boot camp in Ann Arbor when this latest idea struck him. “In a very serendipitous moment,” Mond says, he saw a City of Ann Arbor truck towing an excavator, and thought, “What about municipalities?”
The same underlying model of 1000tools.com, he says, was adapted to MuniRent.
“I’ve actively participated in the growing sharing economy and wanted to make a larger impact by starting a new sharing economy: collaborative government,” Mond says.
After interviewing over 30 public works directors in Michigan, he realized that MuniRent had a market. Mid-sized cities need to increase utilization of their heavy duty equipment and smaller cities need easy, rental access to the same. The first cluster of cities using MuniRent started in Mond’s backyard, Washtenaw County, home to Ann Arbor. That Mond says will be the “epicenter” from which he’d like to build out the platform.
Beyond Michigan, Mond is engaging with 43 municipalities in Oregon who are keen on trying MuniRent. Given that they already have an intergovernmental agreement in place for sharing resources, the cities would use MuniRent as a means to find what equipment is where in the state and do transactions online, upgrading from excel spreadsheets and invoicing.
John Adams, finance director and treasurer for the city of Thousand Oaks, a mid-sized city 40 minutes north of Los Angeles is intrigued by MuniRent. Thousand Oaks, with a population of over 100,000, already collaborates with smaller neighboring cities, Moorpark and Westlake Village, Adams says. For example, Thousand Oaks helps run and maintain the public bus system in Moorpark, which is considerably smaller with only 30,000 people.
“We’re always looking for ways to collaborate and do things more cost-effectively for the taxpayer. We have that fiduciary responsibility. That’s why the idea of MuniRent is appealing and unique.”
For Thousand Oaks, MuniRent would be a good resource to generate extra funds when the machines are not in use, Adams says, and augment the purchase of new equipment. Traditionally, he says, the city goes to a commercial rental yard, if they need equipment beyond their fleet. “They don’t always have what you’re looking for though.”
With exchanging equipment also comes the task of operating it. Thousand Oaks, for instance, which has specialized equipment could offer not just the machinery, but also the know-how.
The City of Chelsea in Michigan is doing just that: They’ve listed a street cleaner with an operator and fuel for $1,000 a day on MuniRent. “This could be considered more of a service, so MuniRent is not limited to just equipment,” Mond says.
Operators don’t generally come with equipment from a rental yard or a contractor, Adams says. “That could be a unique feature for MuniRent, not just the equipment but also the manual.”
Brett Mandel, a former director of the financial and policy analysis unit in Philadelphia’s city controller’s office, can see a few possible challenges for the startup: firstly, differences in governance from state to state, legal restrictions that could slow down the exchange of equipment across state borders. Secondly, there’s always the question of liability, he notes. Who covers what, if something were to go wrong?
Mond has given both hurdles consideration. For the latter, MuniRent requires all cities to have a Certificate of Insurance that provides coverage (dollar amounts on the insurance vary). For legal restrictions, Mond says, “Most cities within a state have similar policies.” And the bulk of MuniRent’s clients want to work with neighboring towns, not in trans-continental exchanges, given that transportation costs for lugging around heavy equipment would be high.
The final hurdle, for a startup looking to scale, is financial. Code for America gives $25,000 to each of the startups it selects annually along with mentoring, and access to its network. Mond says he’s not looking to go on the fundraising circuit just yet; he’s more focused on getting users and fine-tuning the platform.