The CEO of one of Uber and Lyft's hottest rivals reveals why the DNA of his company is fundamentally different from its competitors and how it can replace the private car
AP Photo/Richard Drew
- Via - a ride-hailing company that focuses on shared rides - wants to eliminate the need for personal vehicles.
- On the consumer side, its drivers make more money than competitors like Uber and Lyft, through a more efficient algorithm they think of as a "virtual bus stop."
- For cities, the company is licensing its software to run on-demand buses and even operates the entire network in some towns.
- We sat down with CEO Daniel Ramot to talk about the business, his competitors, public transportation, scooters, and more.
Every morning throughout New York City, Chicago and Washington D.C., a fleet of black vans emblazoned with bright blue logos take to the streets. If it weren't for the Via logo, they'd blend right into the fabric of other ride-hail vehicles, personal cars, and taxis.
But under the surface, Via is hoping it can increase its market share above the tiny fraction that it currently holds by convincing people that a shared ride is better for everyone.
The company, which draws inspiration from shared taxis in Israel called Sheruts, has raised $387 million in four rounds of venture capital funding and is currently active in three US cities as well as several other in Europe through a partnership with Mercedes-Benz.
CEO Daniel Ramot has plans well beyond passengers ordering cars to get from one place to another: he wants to invent an 'operating system' for public transportation, one that will radically change our notion of a public bus, and - eventually - eliminate the need for personal vehicles.
Currently, Via operates the entire public bus network in Arlington, Texas - replacing the traditional vehicles with on-demand shared vans. Its software enables other cities to do much the same with their public transit agencies.
Business Insider caught up with Ramot to talk about what got the company to this point, how he views its mammoth competitors like Uber and Lyft, and what's next for Via:
This interview has been lightly edited for length and clarity.
Graham Rapier: Obviously Uber and Lyft are two of your largest competitors. What differentiates Via from other companies in the ride-hailing space?
Daniel Ramot: We see ourselves as being in a different category from Uber and Lyft, and I don't just say this as a way to address the question of competition. It's been the way that we've thought about Via from the very beginning.
We were really focused from the very beginning on creating technology and a service that is all about better public transportation. Essentially, we think of Via as a dynamic, on-demand bus solution, and that's really the way that we started to think about the company from day one.
Uber and Lyft, at least in my sense, have come at it from "how do we make a better taxi?" Now they're adding other types of mobility, but the focus for them has not been around creating better public transportation or bus experience.
I think that that sort of then translates into maybe at least a couple of different elements:
The other is the way that we've historically approached working with cities and public transportation agencies; Our goal has always been to be closely aligned with them and much more collaborative. The DNA of the company is very very different.
Rapier: A lot of your focus seems to be on improving public transportation - why that and not just another ride-hailing service?
Ramot: When we founded the company six years ago, we were thinking about "how do you make public transit better" and looking around it was clear that public transportation was a space that just had very little technology in it, we used to call it insulated from technology.
We were inspired by this van-based system in Israel called Sheruts, where (shared) taxi vans simply run fixed routes like buses, but smaller and faster, and you can flag them down anywhere along the route. We had the idea of taking that system, and through technology, allowing those vehicles to be routed dynamically in response to demand.
As we started to think about that solution, Oren, my co-founder, and I had this sense that this was going to be the future of public transportation. We really believed that, at some point down the road, there will certainly still be buses for high capacity routes, and maybe only during peak hours, but not all times. It was clear to us that many of the areas that we currently serve with buses could be far better served with these more agile, dynamic, data-driven, on-demand solutions.
Over time, we've come to think that it's actually potentially much bigger than that. Not only can this help us replace underperforming bus routes or complement bus systems, but eventually, if you get the system to be good enough, you hit a certain combination of convenience and cost that could start to replace the private car - which is, in that sense, the holy grail.
How do we get people out of their cars? It's very hard to do with a bus, it hasn't worked for dozens of years. Subways work very well, but they're extremely expensive to dig and most cities don't have the density or size to really support them.
Rapier: But isn't the beauty of a (well-planned) bus system that you know when and where it will show up, with at least some regularity, and where it's going to go?
Ramot: I think the psychology of it is probably complex. I don't mean to over-simplify it, but I'm not convinced that what you just described isn't just what we've gotten used to. If you actually take a step back, it isn't that normal to show up at a bus stop and just wait there, not knowing where the bus is, when it will come, and whether it will be too full or you can find a seat. I think it's just something that, due to lack of information and technology, we've become accustomed to. It makes a lot more sense if you can open your phone and say "I want to get from point A to point B" and within seconds the app says "okay walk 100 meters to this corner, and your vehicle is three minutes away" makes a lot more sense.
Rapier: What about people without phones, like kids, the elderly, or those who can't afford it?
Ramot: Usually the cities we work with, whether it's directly with the municipality like in Arlington or a public transit agency, they are definitely concerned about that. When we're running a consumer service, our customers are people who have phones - we would love to get the people who don't have phones too, but it's okay, from our perspective, that we don't provide service if you don't have a phone with an app on it. But for a city like Arlington that would not be okay.
Rapier: How did the arrangement with Arlington, Texas come about? How did you convince an entire city - the seventh largest in the state - to let you run the entire public transit system?
Ramot: We basically spent the first years the company building the technology. Once we became convinced the technology was really working, we starting going to transit conferences, speaking about what we're doing and getting to know folks in the business - especially on the municipal and transit agency side. We ended up getting connected with the folks at Arlington and talking to them about what a solution could be for their city and how we would envision it.
Those talks led to an RFP (request for proposal) for an innovative on-demand public transportation service. There were actually quite a few companies that responded and we ended up being selected through that procurement process.
Rapier: What's the breakdown of your public transit versus consumer businesses? Are they equal or is one much bigger than the other? Which is your biggest focus right now?
Ramot: Our consumer offerings in New York, Chicago, Washington D.C. and some European cities through a partnership with Mercedes-Benz is still the biggest part of our business today, and continued to grow very quickly.
The part of the business where we are partnering with cities - either like the one in Arlington or simply providing the software to a transit agency - is rapidly growing. I suspect that within not too long will become an equally large and important part of the business.
But if we take a step back, the way that we see what we're doing is not as two separate businesses but one solution. We like to think of this as an operating system for on-demand shuttles. It's an extremely efficient format that we'd like to deploy all over the world. The question then becomes what is the best way for us to enter all of these cities. Sometimes we decide that it makes sense to launch our own service as we did in New York and London. Other times it may be better for us to partner with a city or agency.
Rapier: Let's talk about the directly operated services. Subscription plans are hot right now, with Uber and Lyft both announcing them in the same week, but you've had Via Pass for years. How's the response been to that?
Ramot: Our subscription service is quite unique in that we're the only one where you simply pay up front and then get unlimited (up to four) rides per day, much like a MetroCard in New York. (Editor's note: a 30-day pass for New York's subway and buses is $121; a Via pass is $255 per month.)
The service doesn't have dramatic price fluctuations that you might see on other platforms. To us, if you're going to take one, two, or four rides today we know about how much they're going to cost.
Rapier: What about the algorithm - how is the routing different than that of say Lyft Line or Uber Pool?
Ramot: The system we've developed is all about getting as many people as possible in the vehicle while guaranteeing a route that makes sense, and not being taken out of your way. Still, hopefully, we're able to find a number of other passengers whose routes overlap and can all ride together with minimal disruption.
This has always been key, but we realized early on that for this to even have a remote chance of working we're going to have to ask people to walk a little bit. If we try to pick you up exactly where you are and drop you off exactly where you need to go, that imposes pretty strong constraints on the route of the vehicle and can force large detours.
We very quickly realized this and then developed sophisticated technology around figuring out what we call "virtual bus stops" and the best way to route vehicles. These really complicate the computations - it's no longer just the shortest route between your origin and destination, but a cloud of possible pickup points.
Shared rides have always been our focus, and we didn't offer private rides until about a year ago. Still, about 95% of our requests are for shared rides. The vast majority of people obviously think about it as a shared service. I can talk a lot and tell you why it's different, but I think that number speaks for itself.
Rapier: What about for drivers? Is your pay scale or driver app any different?
Ramot: There are a few key differences around the driving experiences and pay. Drivers on the Via platform are very used to following the Via app. They're provided with a route at all times, including when they're empty. A big part of the efficiency is that we know exactly where they are and where they're going to be, so we can balance out where all the empty seats are throughout the city.
If you imagine having all the vehicle take the fastest route, which might be Park Avenue for example. It's very beneficial for us to have some vehicles go down Lexington, some go down 2nd, and so forth so that we're always matching available seats and where they will be 10 minutes from now.
This driver guidance helps contribute to our significantly higher utilization rate than other platforms, which then also translates into higher earnings per hour. If you look at the most recent TLC report, the median Via drivers were making 50% more than drivers on Uber and Lyft.
It's not necessarily that Via drivers when they have a passenger in the car are making more money than Uber drivers that have a passenger in the car, I think it really is about utilization. When you think about your experience on these other platforms, their focus is on providing you a ride that's within three to four minutes away. That's it. It's a great experience, no question, on the consumer side. But it means there have to be a lot of empty vehicles driving around waiting for you to open the app and book a ride.
Our wait times are a bit longer, six minutes on average, but that all comes with trying to not have too many drivers on the road and having the efficiency as high as possible.
Rapier: Will you be IPO-ing soon like Uber and Lyft?
Ramot: It's definitely a direction we're thinking about. We're trying to build a company that has a product that's deployed in every city throughout the world. If we're able to achieve that, then that's certainly a company worthy of an IPO.
Rapier: What about scooters? They seem to be all the rage now - are you planning to go beyond cars?
Ramot: Over the last 10 years, we've seen technology come into the transportation space - with the introduction of ride-hailing and shared rides - that has been super interesting. Now, what we pioneered in New York is being adopted by other ride-hailing companies around the world like Uber Pool and even Didi Chuxing and Grab have shared services now.
Technology can increasingly create new modes of transportation that didn't exist and I think in the case of scooters - their combination of hardware, software, and batteries - has enabled this new mode of micro-mobility. Just like ride-sharing, this will change the urban mobility landscape in a really positive way. People have different needs, and having a diversity of modes to choose from is very important. We're pretty excited about the space.
We're definitely looking to add scooters to our repertoire, specifically with what we're offering to cities. A lot of our partner cities have expressed interest.
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