The Uber-ification of the roads is converting countless people from drivers to passengers. One startup sees an opportunity to turn those passengers into consumers, while helping the drivers earn a little extra cash.
The next time you get from A to B via Uber or Lyft, you might encounter a next-generation vending machine between you and the driver. NYC-based startup Cargo partners with rideshare drivers to distribute snacks and other convenience items to hungry and/or needful passengers. CEO Jeffrey Cripe describes it as a "mobile, on-the-go minibar inside the vehicle that allows you to purchase high-utility items like iPhone chargers, energy bars, energy drinks, Advil." And, if that's not enough, added Cripe, you'll also find "the only FDA-approved hangover cure." Some of the items are complimentary while many others can be purchased through a mobile website.
Cargo's service is live in New York City, Boston, and -- as of Monday -- Chicago. "We see this massive passenger economy starting to emerge, where people will have more idle and downtime than ever inside a vehicle," Cripe explained. "And there's an opportunity to monetize those passengers, but do it in a way that helps them and improves their day."
Each Cargo box is emblazoned with the driver's unique code, so the driver can earn a commission on the sales. For rideshare drivers, using Cargo might mean earning $100 to $300 monthly, which makes a difference when you're barely netting more than minimum wage. The per-item commission is $0.50, with a $10 bonus after selling 10 items per week and a $50 bonus after selling 100 per month. Passengers are also given the opportunity to tip through Cargo, and drivers receive $20 for each new driver they refer.
Drivers with Cargo boxes are already supplementing their income at a modest but meaningful level. A company spokesperson said, "The top 30 percent of drivers sell about 500 items a month, and the majority make at least $100 a month on average."
Cargo itself makes money in two ways. The first is straightforward: Cargo buys products at wholesale prices and sells them to passengers at retail prices; it's just a rolling convenience store franchise. But Cargo also partners with brands that are interested in boosting particular products, or testing new ones in order to get customer feedback.
Passengers are given the opportunity to rate and review what they purchase. Bored rideshare passengers -- who tend toward being young and affluent -- are a perfect testing ground. Some of the brands currently on board are Kellogg's, Mars-Wrigley, and RXBAR protein bars. The arrangement draws on CEO Cripe's past as an early employee at cosmetics subscription company Birchbox.
Cargo's service, as it currently exists, seems vulnerable to cloning by Uber and Lyft. Cripe said he doesn't think those companies will want to add the logistics headache to their existing business problems. "We have relationships with these companies," he added. "It's not like we're operating in a vacuum and they don't know who we are and we're sort of hoping they don't notice us. We've built Cargo from day one by soliciting the buy-in of executives and partnership directors at those companies." Expecting a future of autonomous vehicles, Cargo also maintains a line of communication to the OEMs that actually manufacture cars.
Cripe sees more in Cargo's future than the ability to sell snacks and sundries. "What's really valuable about our company is our ability to distribute products directly to thousands and thousands of drivers across the country and eventually across the world," he said. "Essentially [we] have these mobile, connected, automatically replenished storefronts that can not only be retailers in-and-of themselves inside the vehicles that are connecting passengers with products -- they can also be forward-located delivery vehicles," bringing products to customers instead of the other way around. Cripe even mused that Cargo drivers could be the nodes in a mesh Wi-Fi network.
And if that's not enough to win customers' hearts, there's always that hangover cure.