Uber‘s growth has taken the company into many categories of transportation, from simple car services for individuals through to courier deliveries. Now, a startup out of New York called Via
has raised $27 million to take Uber on in one specific area:
ridesharing services for people in urban areas. With a flat rate of $5
for prepaid rides (and $7 for those you order on the fly), Via hopes its
iOS and Android
app will also work as a viable alternative to the likes of city buses
to help get people from point A to B. Indeed, CEO and co-founder Daniel
Ramot likes to describe Via as a “dynamic bus.”
The plan will be to use some of the funding to expand
across more of Manhattan, the only place where Via is currently
available, and also to move into more new cities. The first targets are
Chicago and Washington — dense places that are far away from Uber’s home
ground of San Francisco.
The funding, a Series B round, is notable also because of
some of the investors pitching in. Led by Israel’s Pitango Venture
Capital, the round also had participation from Hearst Ventures and
Russian mogul Roman Abramovich’s Ervington Investments. Previous
investor 83North, formerly known as Greylock Israel, also invested, to
bring the total raised by Via to date to $37 million.
Via, which was launched in September 2013, has remained
relatively under the radar, growing mainly by word of mouth (and some
select strategic praise) in a fairly limited range across midtown Manhattan.
Even so, working in what is essentially only a seven
square-mile radius gives Via a huge opportunity — that space alone sees
on average 200,000 taxi trips in a typical day. And Via has already seen
some traction: to date the 500 drivers on its books have racked up
300,000 shared rides from 40,000 registered users (or, as Via likes to
call them, members), and “We always wish we had more cars to handle the
demand,” Ramot told me in an interview.
The idea behind Via germinated originally out of how
people in Ramot’s home country of Israel share rides in shuttle vans
that drop off and pick up users not directly at their doors, but in a
very close vicinity to them, no more than a few minutes’ walk, which he
calls “vanpooling.” In that sense, you can think of Via actually as more
of a bus than a taxi competitor.
“When you look at public transit it has fixed routes and
schedules,” he said. “We see that on-demand transportation in the future
will be the same, just smaller and more agile.” A people-carrier in the
Via network will typically hold between 5 and 8 people, with a ride
rarely only being taken by a single user. “We’re positioned in a unique
space between a bus and an Uber,” he said.
In the current set-up, Via works only with drivers that
are licensed by local taxi associations, which should help it avoid some
of the controversy that Uber has seen in markets where it also brings
in unlicensed drivers to its network.
While Ramot likes to differentiate between Via and Uber,
the latter, of course, coming up fast. Uber has been testing out its own
carpooling offering, Uberpool, which it launched in New York in December 2014 after an initial rollout in San Francisco. But it’s also still in development mode with how this will work: it recently raised the price to $7 from $5 in San Francisco, for example, and it typically only pairs two riders going in the same direction.
The fact that Via falls into a gap between what Uber
offers today and what a user can get from a city transportation
network seems to be also be what is attracting the extra investment,
with VCs aware of the exploding interest both in private car services,
but also a growing evolution in what people expect from them as cities
get denser, and we get busier.
“Today’s cities require a new approach to their transit
challenges, but most solutions don’t address the very real problems of
too many vehicles on the road and not enough affordable and convenient
transportation options,” said Chemi Peres, who is joining the board with
this round. “Via has a solution that will sharply reduce traffic while
getting people to their destinations faster and more comfortably. Via
has built an impressive technology infrastructure to solve the world’s
transit problems, and we are proud to invest in the company and the
team.”