If you're in ride-sharing, you had a good week. Uber raised $3.5 Billion in private funds from Saudi Arabia and Gett, based in Tel-Aviv and popular in cities like Moscow and London, received a $300 million investment from Volkswagen Group. All this money is proving that's it not where you're going that matters but how you get there.
Oooh there's a slogan for you, Gett.
Uber is now valued at $67 billion. Lyft, Gett and other competitors also have market share. But Gett, only in NYC, plans to expand further in Europe rather than the United States. And Lyft, Uber's largest U.S. competitor, is only in 32 states.
Still, if you were looking to create a ride-sharing app two months ago in the U.S., people might think you were crazy. How would you compete against Uber and Lyft? "The drivers, that's the answer", said James Matthews, Founder of SteadyFare--the business he created earlier this year.
While it's no secret that Uber and others intend to use driverless cars in the future, the present business model requires drivers. Uber, Lyft and most other ride-sharing apps don't own any of the infrastructure. And while that's revolutionary and appealing to investors, it also does allow for fluid competition.
"An ber driver can also be a SteadyFare driver. As the name suggests, our prices never surge. So at peak times, drivers and riders can simply switch to Steadyfare", said Matthews. "But with price transparency, allowing our drivers to keep 100% of their tips and donating part of our revenue to charity we hope people will use Steadyfare all of the time."
Steadyfare has already raised $700,000 in angel investments. Matthews is looking to launch in 20 markets over the next year.
"We also plan to set user/driver preferences in profiles so that the algorithm, if people choose, will pair female riders with female drivers and male riders with male drivers", said Matthews. "It's similar idea to a new platform that is women only without all the employment law problems and lack of drivers."
At first glance, the competition in ride-sharing looks daunting. Most people wouldn't give a second thought to competing against a $67 Billion company. But then again, Uber was once in that position. They had to compete against Ford, GM, Volkswagen, other large automakers and the taxi companies. They did it and did it quickly.
It took companies like Toyota, Honda and Kia decades to gain market share in the auto industry because they had to establish trust, build infrastructure and slowly change consumer perceptions about the quality of their product.
But in an industry where there is no product and drivers aren't employees, what is stopping Steadyfare or anyone else from stealing Uber's market share?
So the next time you or someone you know comes up with a crazy idea, don't laugh and ask "Where is this going?" Stop and ask "How do we get there?"