The bag-storage industry is taking off

By A.W. | WASHINGTON, DC

TIME and time again, entrepreneurs have given business travellers services that they did not realise that they needed. Most were happy with hotels, until Airbnb came along. They were content to take taxis and rental cars, until Uber and Lyft, two ride-hailing apps, appeared. And now a new crop of startups have entered the fray to give travellers a place to store their bags.

The latter solution addresses a problem that the first two helped create. Travellers staying in Airbnbs generally have relatively strict checkout times and no place to stash their luggage upon checkout if they are not heading straight to the airport. The boots of hire cars are a sensible place to put bags for the day before leaving town, but Uber and Lyft rides do not offer that option. Worries about terrorism have also meant that many airports and train station have torn out their left luggage facilities.

And so enter startups such as LuggageHero, Vertoe, CityStasher, Knock Knock, and Nannybag. As in the early days of any new internet-driven marketplace, there are a slew of companies competing to gain supremacy in this market. The basic idea is consistent. Shops, cafes, and other businesses sign up to participate with one of the bag-storage sites, and then when travellers need a place to drop their bags, they pull up the site, find a nearby shop, and pay a fee to leave their luggage there.

The fee structures differ. LuggageHero, which launched in 2016 in Denmark, now offers service in New York and London and costs one euro, dollar, or pound per hour, plus a fee of another two per bag. Knock Knock charges $2 per bag per hour in New York, San Francisco, and Boston. Vertoe, another startup, opts for a flat daily rate of $5.95 per item at its locations in six American cities.

Neha Kesarwani, Vertoe’s co-founder, says that company has focused on leisure travellers. But business travellers already comprise 10-15% of its customers. The company’s other co-founder, Sid Khattri, says a quarter of Vertoe users are staying in hotels. He says a traveller staying in a hotel in Midtown Manhattan, for example, would rather not have to travel back there to pick up his bags between a meeting in Brooklyn and a trip to nearby John F. Kennedy Airport. Instead, it is easier to drop the baggage at a store near the meeting and avoid the trip back to Manhattan. The company’s goal, he says, is for users “to be able to access and book space within five minutes, wherever you are.”

For now, no single company has yet cornered the market for bag storage. Different models, some based on leaving bags with third-parties and others using their own storage facilities in empty shopfronts and the like, are viciously competing against each other. But the need is real. Vertoe’s research suggests that about 30% of travellers face conundrums about where to store their bags. In time, when one or two of these businesses gain substantial market share, they may become household names—just as Airbnb has become for lodging and Uber and Lyft for getting around a city.