For a startup taking on tech ride-hailing behemoth Uber, Fasten sure has a lot a confidence.
Perhaps that's because the 100-person company, led by Kirill Evdakov, is the official ride-hailing service of this year's South by Southwest. And if it plays its cards right, it could be the breakout app of the tech, film, and music conference, which starts today in Austin.
Ever since Uber's and Lyft's self-exile from Austin last June, following the city's vote to require fingerprint background checks, the Texas capitol's ride-hailing market has been filled by a roster of third-party apps. But Fasten, a Boston-based startup that has raised $15 million since launching in 2015, has quickly emerged as the leader of the pack.
Fasten has done this by taking a very anti-Uber approach to the business of ride-hailing.
While Uber has aggressively expanded its reach to markets across the globe, Fasten has narrowed its focus to Austin and Boston. While Uber raises money so it can grow, grow, and grow, Fasten penny pinches, careful to expand in a slow, money-conscious manner. And while Uber continues to lower its fares, Fasten approaches its business in a manner that will allow drivers to get more money and larger cuts of every ride that they give.
So far, that approach seems to have worked.
Despite the razor-thin margins of ride-hailing, Fasten claims it was able to reach profitability in November by keeping its operations limited and focused to the two markets it serves. And now with tens of thousands of techies, artists, and businesspeople descending on Austin for SXSW, Fasten is preparing to look beyond its two core cities.
"We've been around in Austin supporting big events like Austin City Limits and New Year's, but SXSW is as big as it gets," said Evdakov, the company's CEO. "We're very excited."
The timing for Fasten's big opportunity could not be better. SXSW comes after a string of embarrassing reports for Uber that put on display the company's treatment of women, its treatment of drivers, its alleged theft of trade secrets, its use of software to circumvent government officials, and its peculiar partnership with China's Baidu.
"More and more people are starting to pay attention to the fact that Uber rips drivers off," Evdakov said. "We want riders to care about the driver who's sharing his car. We don't want people to just blindly hop in the car, look at their phone and hop out. Conscious consumption, that's what we aim for." (For its part, Uber claims that drivers in dense cities, such as San Francisco or Boston, can earn north of $600 a week, so more than $31,200 per year.)
Fasten differentiates itself by taking a 99-cent cut of every ride facilitated on its service, unlike Uber and Lyft, which both take percent cuts of every fare. As Evdakov says he sees it, the drivers are the ones who are key to the service and carry the more variable costs.
"This allows drivers to make more money, even on shorter rides," he said. "There's a huge significant difference for those drivers, and that's what allows us to compete with Uber."
Evdakov arrived in Austin on Thursday with dozens of employees from his marketing team. Their goal is to build up Fasten's brand and ensure that more people recognize the app, which features a black, lowercase "e" on top of a neon green background. Evdakov said he and his team will be participating in several SXSW events to do this, but in general, their main goal is to ensure that the Fasten app stays up, stable and manages the tricky balance of ride-hailing supply and demand.
"We want to have our name out there, so when we launch in Seattle, California, and everywhere else, there'll be people who have heard about us," Evdakov said. "SXSW is probably the best possible event for us to reach not only a nationwide but worldwide audience." For the record, the company is tight-lipped about where it might head next. "We don't want to give Uber and Lyft a heads up," Evdakov says with a laugh.
Shortly after the SXSW party, however, things will likely get more challenging for Fasten. In Texas, it's looking as though there is a strong chance that legislation could be approved by the state that would allow Uber and Lyft to return to Austin without having to spend on fingerprint checks for its drivers.
Despite this, Evdakov says he is ready to take on Uber.
"Yes, Uber is definitely a big, strong company. There's a lot of great people working there and they have great technology," Evdakov said. "But at the same time, we're in a business where riders and drivers make choices, and the ride-sharing market is still new. What we've learned is that there's a lot of ways to differentiate yourself."