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”
Americans don’t carpool. The proportion of U.S. commuters whoho share rides peaked at about 20 percentercent in the 1970s, and it’s less than half that today. In Europe, carpooling app BlaBlaCar 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.