After their meteoric rise, ride hailing services like Uber and Lyft have more recently suffered from reduced ridership due to COVID concerns, recent surge-pricing scandals, driver and rider safety issues, and more. So we were intrigued to learn about several new ride-hailing services at the recent Move America mobility conference in Austin, Texas. These startups all aim to improve on those pain points by employing their drivers and owning their ride hailing fleet of five-star safety-rated and/or fully electric vehicles like Teslas.
New startups we learned about included Dallas-based Alto (also entering the Los Angeles market), Las Vegas-based all-electric Kaptyn (expanding into other markets this fall), and Nashville-based Earth Rides (currently in Austin, Texas, and expanding soon to Phoenix, Arizona). Earth Rides handled all our transportation needs in Austin and we managed to sit down with 26-year-old founder and chief executive officer Raven Hernandez to learn more about launching a ride-hailing service during a pandemic.
In between organic bites at North Austin’s True Food Kitchen, Raven explained “Because it’s the healthiest way to get around.” She’s very conscious of health and the environment in her everyday life and she felt like exposing people to the benefits of electric cars—especially the young people most likely to employ ride hailing services for weekend partying and so forth—presented an excellent opportunity to evangelize about electric mobility. (It helps the narrative somewhat that in progressive Austin, 46 percent of the electricity consumed by the city currently comes from renewable sources.) And because most electric cars that are large enough to be practical for ride hailing skew quieter and more luxurious, the service is inherently more akin to “Uber Comfort” or “Lyft Preferred,” so the price charged can be a little higher.
Clearly, this sidesteps the need for pro-business legislation like California Prop 22 (which was declared unconstitutional and created a public-relations nightmare), but it also engenders greater safety for all parties to the ride hailing service. Drivers get extensive training and benefits, while riders know that the drivers have had background checks, extensive training, and professional driving tests.
It also permits the company to monitor driving style via telematics. And it makes it easier to ensure a diverse driver population, which in the case of Earth Rides skews majority female and racial minority. Many Earth Rides drivers might not be able to afford their own EV and they’re not required to pay anything to drive Earth Rides’ cars. The driving experience is enjoyable, which builds job satisfaction, and reduces turnover.
Earth Rides does have a vetting program that allows electric vehicle owners/operators to drive for the company and utilizes these drivers to meet peak demand. By and large, all rides scheduled in advance are handled by employees piloting the Earth Rides fleet, while on-demand requests that can’t be accommodated by idle employees get routed to contractors. Together, the Nashville fleet of 15 owned cars and 30 contractors can typically support 1,000 rides on a busy day.
The Nashville fleet is almost entirely comprised of Tesla vehicles, including several Model X SUVs and some Model Ssedans that were purchased used (there’s an early S that’s accrued over 250,000 miles requiring little other than tires, and it’s extra valuable because of the free supercharging). Most of the Model 3s and Ys in the Earth Rides fleet were purchased new. Ys are purchased with the optional third-row seat to accommodate larger ride parties.
The fleet also includes Audi E-Tron, Ford Mustang Mach-E, and Polestar 2 models, and other higher-end models will join the fleet (but probably no Nissan Leafs or Chevy Bolts). The local charging infrastructure affects purchases—Nashville is well served by Tesla Superchargers; Austin is less so. Hence there are more non-Teslas in the Texas fleet.
Earth Rides never employs surge pricing. Rather, to align supply and demand, Thursday through Saturday pricing is typically 10-15 percent higher. Raven Hernandez said the average trip might cost up to 20 percent more than Uber or Lyft, but my 10-mile, 20-minute midday Wednesday trip from the Move America conference at the Palmer Events Center to the Austin airport cost me $23.50 on Earth Rides before tip.
Just minutes before my tesla model 3arrived, I priced the trip on competitors. Lyft quoted $18.91 for the most affordable standard “wait and save” (pickup within 15 minutes), $22.78 for a “preferred” car, and $40.13 for a Lyft XL. My Uber estimates ranged from $25.18 for an UberX, to $30.83 for Comfort, to $41.25 for Uber XL.
In addition to driver training, new employees are schooled to be conversant in the technology of the cars they’re driving, so they can answer all the frequently asked questions riders might have. As such, in Nashville, the Tennessee Valley Authority (electricity provider) provides a small subsidy to Earth Rides for each fare it collects for EV education outreach. And Earth Rides has worked out some sweetheart lease deals with Polestar to both expose the public to the nascent brand and to accumulate mileage more quickly than retail customers would and thereby provide fast-tracked used-vehicle stock.
“We are a for-profit business with a nonprofit mission,” Raven Hernandez noted during a Move America panel discussion in which she described their Life Program, which is targeted at helping provide mobility to differently abled people. Folks with sight, hearing, or intellectual difficulties often have trouble interacting with various transportation modes, but scheduling an Earth Rides trip in a quiet electric car driven by someone who has been trained to deal with this clientele helps reduce stress in this community.
Ms. Hernandez has been trying to interest EV manufacturers in revenue-sharing vehicle-use models outside the typical purchase or lease arrangement. This could potentially generate greater cashflow, provide partially captive fleet vehicle performance data, and deliver high quality used car inventory for the manufacturer at an accelerated rate, while guaranteeing Earth Rides a high-quality ride-hailing fleet and reducing maintenance costs (even as low as they are with any EV, giving cars back before they need tires would save the company a good deal of money).
Nissan, your confidence is showing! The automaker fielded a last-generation Frontier pickup loaded with NISMO off-road upgrade parts and accessories with Team Wild Grace in the 2020 Rebelle Rally, an all-female off-road race through the desert and took fourth place. This is a competition loaded with prepped off-roaders and skilled pilots, so that was a pretty good showing....