The TNC or ridesharing sector is not only Uber and Lyft, but it is also a growing business sector that is starting to see new competition arise in different cities around the world. In the US some new competitors appear on the local scene. While they might not pose an immediate threat to either Lyft or Uber, once the local companies start to thrive and populate the map they will take a Signiant amount of the pie, reducing Lyft and Uber control over the market. This is seen in Austin, Texas where a new small player has taken over the city, Fasten
Fasten is a start-up that appeared on the scene on September 15th, 2017. It raised $9.2 million, contributed wholly by Fasten chairman Evgeny Lvov and is the brainchild of CEO Kirill Evdakov, CMO Roman Levitskiy, and COO Vlad Christoff. They started the first car in Boston, so what is Fasten?
Fasten
This is a ridesharing app that operates in the same way Uber and Lyft do, but with some differences in their business model. Their motto is "People First. Rides In Seconds." Their site: https://fasten.com/us is comprehensive and comes with all the features of Lyft and Uber, but their difference comes from what they offer both their customers and their drivers.
The biggest way to success in ridesharing is the size and quality of your fleet. The quality of the fleet is maintained through strict requirements, but the size is dependent on how you pay your drivers and how you interact with them. This is the core of their concept and their statement. They put their passengers and drivers first.
The fasten App
The app is very similar to both Lyft and Uber, and while Fasten entered the market quite late, they do have one added advantage over their competition, they don't need to learn what Uber and Lyft learned through years of trial and error. They can copy and start off from experience gained by the two giants and offer an immediate better service to their customers and drivers.
The first step is to download the app either from apple store for iOS devices or Google Play store for Android devices.
The app allows customers to choose from a fours seater or six-seater car. One a request has been made the app will show the customer the ride information details such as the ETA, estimated cost and the estimated time for the ride to complete.
Pricing
This is the reason why Fasten will overtake all their competition. They only charge the driver $0.99 per ride, or they offer the driver, an option to pay a $20 daily fee or an $80 weekly fee and all the rest of the income stays with the driver. This means that drivers earn over 90% of all the income.
Surges and other Features
The big difference for customers regarding surge pricing is the fact that the customer controls this and not Fasten. Passengers can ask to boost their ride which increases their chances of getting a driver accept their request This customer dependent boost serves the customer and the driver.
The app also offers real-time pricing, which means that the estimate is as close to the actual fare as can be which is another major difference between Fasten and its competition. This is viewed during the ride itself; the app will show how the fare increases as the drive continue. In this respect, Fasten offers a hybrid pricing system similar to Taxies.
Driving for Fasten
While Fasten is currently only in Boston and Austin, it treats its drivers as it does its customers, which is the right thing to do since the drivers are the face of the company. Passengers don't see corporate Fasten, they see and feel the driver and car. So if this driver and the car are perfect, then the service is perfect and "Fasten" becomes perfect in the minds of the customer.
Since Fasten only charges $0.99 per ride or the weekly or monthly fee, drivers enjoy 100% of the boosts that they earn during surge pricing periods. These periods are determined by the customer and not the company, so it's a win-win situation, the customer is happy to have received a car at a price they set, and the driver is happy to receive more income for the extra traffic issues, the company just enjoys its standard income and will get more income when more and more drivers move over to work with Fasten.
Another benefit is the anonymous tipping feature; this means that passengers can tip the driver without the driver's knowledge, and this is an incentive for drivers to perform better all the time.
Applying to become a Fastener Driver
Fasten requires that their drivers be courteous at all times, provide a driving service that takes the passengers from the pickup location to the drop off location and meet certain requirements. A background check will finalize the acceptance to drive for Fasten.
Boston drivers must:
- Be at least 21 years of age
- Have a valid U.S. driver's license for at least 1 year
- Be covered by an auto insurance policy issued in the same state as the license plate of the registered vehicle within New England.
- Military personnel can register with out-of-state documents. The Proper military ID must be presented for approval.
Vehicle must:
- Be from the year 2005 or newer, with at least 4 independently operating doors, and 4 exterior door handles that can seat 5-7 people (including the driver)
- Have a valid Massachusetts vehicle registration
- Have up-to-date inspection stickers properly displayed
- Have a functioning EZ-Pass
- Be covered by an active auto insurance policy
- Be clean and well-kept both inside and out
- Have working air conditioning and heating systems
- Have a dashboard mount for the phone used to drive with Fasten
Austin drivers must:
- Be at least 21 years of age
- Have a valid U.S. driver's license
- Be covered by a Texas auto insurance policy
Vehicle must:
- Be from the year 2005 or newer, with at least 4 independently operating doors, and 4 exterior door handles that can seat 5-7 people (including the driver)
- Have a valid Texas vehicle registration
- Be covered by an active auto insurance policy
- Be clean and well-kept both inside and out
- Have working air conditioning and heating systems
- Have a dashboard mount for the phone used to drive with Fasten
- Military personnel is able to register with out-of-state documents. The Proper military ID must be presented for approval.
The background check is more stringent than Uber and Lyft; this means that applicants must have a clean driving slate. This is an acceptable request when considering the income ratio between an Uber/Lyft driver to a Fasten driver.
(Source: Fasten)
Conclusions
Uber and Lyft opened the way for ridesharing in the world. The US has already regulated these companies, and California's designation of TNC is now a federal standard. The multiple videos and blogs relating to "how to drive successfully" "how to use the app" etc. all add to the experience that "Fasten" draws upon. It also learned from Uber and Lyfts mistakes and created a much more driver-friendly remuneration model that will attract driver to work for Fasten. In fact, any driver worth their salt would prefer to work for Fasten, since the income is now above 90% of the ride fare.
Based on what has happened in Austin, it won't is long before Fasten kicks out Lyft and Uber from many more cities around the US. All they need to do is learn from Lyft and expand at a steady pace, matching their expansion with their customer support expenditure, since this will be their main source of cost. Once they expand their customer and driver support on an equal footing with city expansion, they will be able to meet the golden income factor that maintains profitability over size. Something that Lyft and Uber decided was irrelevant, and that is why these giants can be toppled no matter how many billions of dollars they have raised in private equity.
Having stated the above, we also wait to see which other companies will come to compete with Fasten, in some cities, cab companies are also creating hybrids "cabsharing" where they replace the central coordination with an app and add the independent contractor feature to reduce fleet ownership. At the same time, having a fleet allows such "cabsharing" companies to rent out their cars to drivers without a car. We will continue to see interesting methods and models of operation until a full profitable model will evolve, or until drivers will be replaced by the autonomous self-driving car that Lyft and Uber are developing, which will be the only way they can compete with Fasten once Fasten grows.