The world before Uber and UberX is almost hard to remember; San Francisco's hard to catch cabs, the long wait for the bus and the BART closing before you can get home. Now residents of cities across the country are spoiled with options for city-based travel, at even lower prices if they're willing to use services like Lyft Line or UberPool. However, those trying to use busses to change the transport system of the city have had incredibly mixed results.
Leap Transit offered what they referred to as an "express service" bus route, using their own busses, for a few dollars a ride, with plush interiors, WiFi, USB ports and trackable busses. Despite $2.5m in funding and plenty of press, Leap filed for bankruptcy last year. It ran into similar problems to many startups; grow fast, ignore the rules, appeal to the tech masses. As Farhad Manjoo of the New York Times put it: "[Leap in 2013] ...even though it had no valid city or state license...decided to use city bus stops to pick up and drop off passengers--a practice that earned it immediate scorn from city officials...[and] struck a sour note with the news media, embracing so many techie stereotypes you could be forgiven for thinking it was cooked up by the writers of HBO's "Silicon Valley."
Conversely, Chariot has received great press and growing users by providing no-frills, law-abiding inner-city bus service to help lower congestion on the MUNI, BART and roads in San Francisco. According to TechCrunch, Chariot makes over 40,000 rides a month, costing riders $4 for a reliable, tech-enabled alternative to other forms of public transport at a price that even beats UberPool. They're backed by major VCs like SoftTech and users love the fact that they can guarantee themselves a space on the bus, unlike any inner-city bus service out there.
Shofur, which launched a new service last week, is taking this to the next level. Their first offering, which started with $800 in cash, grew to a profitable network of thousands of easy-to-charter, comfortable and roomy busses across the country. Their new service, starting in Texas, brings the convenience of exact seating, flat-screen TVs WiFi, plugs and storage from airlines and adds comfortable seating and no security checks to the intercity bus industry. The company quotes that a round trip between Dallas and Houston could cost around $58, while a similar round trip flight would be nearly $400 at the time of publishing. The result is a premium, guaranteed yet affordable travel service, which the company intends to expand rapidly across the country. Users book their rides and seats on an Android or iOS app that allows them to also track their bus in real time.
Even though the opportunity is clear for ticketing services, Shofur's Armir Harris intends to run both services "We certainly still operate the on demand charter side of the business and work with most of the Fortune 500s," said Harris, who said (and Business Insider reported) that he had received an order of 60 busses for the 2012 Democratic National Convention. "We're using the 400+ bus companies that are already on our platform to set up daily inter-city scheduled services. I realized that existing services like MegaBus or Greyhound have technology that's very antiquated and provides an antiquated experience for their clients. Furthermore there are countless of routes nationwide which have high demand that are not being served by other bus companies."
A number of issues dog the travel startups of today, such as Uber and Leap; the law and car inventory. Uber's lawsuit issues have been well-documented, as has their avoidance of cities that won't adapt legislation to their demands. However, their inventory, by using UberX to get people driving their own vehicles, has meant that they've saved the millions that most traditional cab firms have to invest in the cabs themselves. Shofur uses a peer review system to exercise quality control across their network, but doesn't actually own busses. Most bus companies, according to Shofur, are in a lot of debt due to the fact that a bus, unlike a $40,000 sedan, costs $500,000, meaning that a giant network will require huge, multi-million dollar investments to get off the ground. "Bus companies with ratings from passengers that are lower than 4 out of 5 stars are subject to suspension from our platform," said Harris.
There are many traps you can fall into as an entrepreneur, but a continuing theme is not understanding the raw cost of your company, not having a network that can support it, and not abiding by the government's rules in pursuit of disruption. Always make sure to understand every penny of your costs before you write your first line of code; it will pay off.