Two-party marketplaces are complicated, and three-party marketplace are so complicated as to be almost unheard of. And yet, that is exactly what Florida-based Boatsetter has built: a platform to connect boat owners, charter firms and renters together to build better boating experiences.
With a fleet of about 10,000 vessels on offer — ranging for 19 feet to 150 feet — the platform is growing fast, according to Jaclyn Baumgarten, CEO of Fort Lauderdale-based Boatsetter, which has seen its revenue increase five-fold over the last year alone.
The service is often referred to as “Airbnb for boats,” as it has a very similar sharing feel about. Those who want to rent a boat can chose from nearby supply. But the service also makes boaters rent a captain — either one attached to the boat itself, or a separate captain of their choice.
Safety is the firm’s calling card: apart from offering maritime professionals along with boat rentals, Boatsetter also offers $1 million in liability coverage, $2 million in boat damage coverage, plus additional umbrella coverage to make renters feel safe.
Moreover, she noted, Boatsetter taps a hole that naturally exists in the marketplace by pairing underused boats with people who want to sail them.
And, when it comes to boat ownership, underuse is the rule rather than the exception. Most boat owners rarely use their extremely expensive toys. According to The Economist, a French yacht slips its moorings on average for just 10 days a year. America’s 12 million recreational boats get slightly more time at sea, about two weeks a year.
But boat expenses are ongoing. If boat owners finance their vessels, there are loan payments. And even if someone owns a yacht outright, mooring fees, storage costs, maintenance and upkeep can pile up quickly. On the low end — think small sailboat — costs can run at around $4,300 a year ($358 a month). At the high-end, a $10 million super-yacht will cost an owner millions of dollars a year to own and operate.
While owning a boat is expensive at any end of the market, not owning a boat is also expensive for those who have active maritime interests — charters are short, and they are expensive.
What Boatsetter offers is savings to both sides. The typical boat owner on the marketplace, according Boatsetter, isn’t looking to profit on boat ownership so much as simply hoping to defer the ongoing parade of costs that go into owning a boat — meaning Boatsetter can often make a more cost-effective offering than a traditional charter offering.
Moreover, the firm takes a cut from all parts of the transaction — 28 percent of the rental fee from the owner, 10 percent of the captain’s fee and a 7.5 percent booking fee to the renter are all paid to the platform — which creates an easy easy way to book and manage payments across the platform, without it having to hold any inventory of its own.
The challenge in sharing boats, is that it is different from sharing something like a home via Airbnb. Put simply, it is not easy to accidentally destroy a home or apartment. A boat, on the other hand, can be crashed or badly damaged merely because someone is insufficiently experienced at the helm.
One incentive that helps overcome that is money, of course. Though owners don’t necessarily enter the Boatsetter marketplace looking to turn a profit, many in fact do, particularly if they own a powerboat, the most popular model on the platform. One of Boatsetter’s top users in Miami netted over $150,000 in about a year with a 27-foot powerboat, according to Baumgarten.
But Boatsetter has also avoided some of the problems others that have tried to enter this market have faced, by taking a very risk-averse approach to boat sharing. The firm insures boats for owners, a cost the renter ultimately pays as part of the standard contract. And to rent a boat, the renter must be pre-approved by the insurance company.
And the boat owner maintains control of the boat — the boat owner or a representative he or she sends will generally meet the renter for an pre-rental orientation. If the boat owners get a bad feeling, they are free to kill the deal at any time.
“The owner gets to decide when the boat goes out, sets the price and has full say on who it goes to,” Baumgarten said.
When Boatsetter first set sail, the company’s focus was Florida, but these days it is setting its sights on a wider market and is in the midst of a national rollout of its service. But though the firm is getting bigger, its goal remains the same: unlocking the 95 percent of boats that are sitting idle in way that works for owners — and for those who just want to sample the sailing life.