The Uber-iza­tion of car­pool­ing

Star­tups are push­ing long-range shar­ing with dis­counts “It’s no longer weird to get in the car with a stranger”

Bloomberg Businessweek (Asia) - - CONTENTS - −Ellen Huet

Amer­i­cans don’t car­pool. The pro­por­tion of U.S. com­muters whoho share rides peaked at about 20 per­center in the 1970s, and it’s less than half that to­day. In Europe, car­pool­ing app BlaCar is worth $1.5 bil­lion. In the U.S., where gas is much cheaper, no­body’s cre­ated a break­out app that matches driv­ers with rid­ers for long trips. The last se­ri­ous ef­fort, a ser­vice called Zim­ride aimed att col­lege stu­dents, came about a decade ago. Its founders even­tu­ally put the idea aside to start Lyft, which along with Uber has made peo­ple more com­fort­able with dig­i­tal ride hail­ing.

In the past year, sev­eral star­tups have arisen to give car­pool­ing a fresh

chance. “It’s no longer weird to get in the car with a stranger,” says Jonathan Sadow. “If Zim­ride had started in 2014 in­stead of in 2007, it would have been wildly suc­cess­ful.”

Sadow and his brother, Robert, co-founded Scoop, a year-old San Fran­cisco com­pany that’s struck part­ner­ships with big Bay Area em­ploy­ers that don’t have great pub­lic tran­sit ac­cess, in­clud­ing Kaiser Per­ma­nente and Cisco Sys­tems. Hovee, also in San Fran­cisco, matches car­pool­ers who are con­nected through so­cial me­dia. Ride, co-founded by Uber’s first chief tech­nol­ogy of­fi­cer, runs its na­tional ser­vice out of New York and Philadel­phia. And Google sub­sidiary Waze is test­ing a car­pool­ing ser­vice in Is­rael.

It’s be­come a lot eas­ier for th­ese ser­vices to sign up and track the crit­i­cal masses of users they need, says Julie Ask, an an­a­lyst at re­searcher For­rester. Says Ann Fan­dozzi, chief ex­ec­u­tive of­fi­cer of Ride: “The tech­nol­ogy is fi­nally at a place where peo­ple can con­nect the dots.”

Apps can help re­solve many of the prob­lems with car­pool­ing, says Su­san Sha­heen, co-di­rec­tor of the Trans­porta­tion Sus­tain­abil­ity Re­search Cen­ter at the Univer­sity of Cal­i­for­nia at Berke­ley. Among other things, they can re­move much of the plan­ning and all the cash trans­ac­tions. Scoop users sched­ule rides ahead of time (9 p.m. or ear­lier for the fol­low­ing morn­ing; 3:30 p.m. or ear­lier for the com­ing evening), and pay one an­other via phone based on the app’s dis­tance rates. A 40-mile trip from San Fran­cisco to Pleasan­ton runs $8. Scoop takes a $1 com­mis­sion per ride (typ­i­cally about 17 per­cent). Its ri­val­sri­val gen­er­ally charge 10 per­cent to 15 per­cent. The Sad­ows say their app fa­cil­i­tates about 10,0001 rides a month, with the av­er­agea user set­ting up four to fivefi one-way trips per week. The com­pany’sc to­tal ven­ture fund­ing is in the low seven fig­ures. Ride de­clinedde to share rid­er­ship and fund­ingfu num­bers. Hovee didn’t re­spond to a re­quest for com­ment.

The big chal­lenge for th­ese busi­nesses will be en­sur­ing driv­ers ar­rive as promised, says Paul Stein­berg, co­founder of car­pool­ing ser­vice Carma. “If you pay a driver to show up, then it works, it’s great,” he says. “But car­pool­ing is the only mode of trans­port that’s a two-way ne­go­ti­a­tion, where a driver can change their mind at the last minute and it breaks down the whole sys­tem.”

Like the fresh crop of star­tups, Carma, founded in Cork, Ire­land, in 2009, be­gan by mak­ing deals with big em­ploy­ers such as Mi­crosoft and the Amer­i­can Au­to­mo­bile As­so­ci­a­tion. Even­tu­ally, Stein­berg says, the com­pany joined with govern­ment tran­sit agen­cies—mar­ket­ing to peo­ple who use elec­tronic toll sys­tems—and now sets up 7,500 car­pools in the eight-county Bay Area ev­ery week. App de­sign isn’t the big­gest fac­tor, Stein­berg says: “Peo­ple aren’t id­iots. They do what’s eas­i­est and cheap. And driv­ing alone has al­ways been and con­tin­ues to be a very easy and cheap so­lu­tion.”

Scoop is bet­ting that Kaiser Per­ma­nente and Cisco car­pool­ers will form bonds that stretch be­yond sav­ing on cabs or gas. Ramesh Bo­ta­p­ati, a prod­uct man­ager at Cisco, says he uses the ser­vice four days a week and has be­friended the col­league who drives the half-hour to their North San Jose cam­pus while they chat about in­vest­ing and their daugh­ters. But, he says, he’s only pay­ing $1 a ride and might not use Scoop as of­ten if Cisco stops sub­si­diz­ing it. “Right now,” he says, “it’s a false econ­omy.”

The bot­tom line Star­tups such as Scoop are giv­ing the U.S. a shot at rel­a­tively easy car­pool­ing. It’s un­clear whether Amer­i­cans will take to it.

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