A new smartphone app with ties to Uber aims to make carpooling easier for millions of daily commuters.
Ride, a service for organizing co-workers at the same company into carpooling groups, opened to U.S. businesses on Tuesday and launched a new app for Apple devices.
The service adds to a growing field of new choices for commuters and their employers, from high-end luxury buses contracted by tech giants such as Google to startups offering shuttle and bus services throughout densely-populated urban areas. Uber and Lyft have also courted commuters in recent months by offering deep discounts on the carpooling option offered within their apps.
Majority owned by TPG Growth, an Uber investor, Ride’s app has a similar look and feel to the leading ridesharing service, showing cars move in real-time along a route. That may be in part because it was designed by Oscar Salazar, Uber’s first technology chief and its third employee along with co-founders Travis Kalanick and Garrett Camp.
Unlike Uber or Lyft, Ride targets its offering to businesses.
The service works like this: A company signs up to be part of Ride and advertises the service to its employees. Each participant declares where they live, what type of car they drive and whether they prefer to be a driver or passenger, or either. Ride uses algorithms to group workers together based on where they live and when they commute to and from work. In each group, the person farthest from the office geographically is designated as the driver and picks up colleagues along the route, using directions from the app.
Unlike Uber or Lyft, the Ride service does not pay the driver a commission. Instead, the app collects a fee from each passenger and remits that to the driver as a reimbursement for their costs. For each passenger, this fee is an estimated 40% discount on the average amount they would pay in gas, parking and tolls if they had driven themselves to work instead.
Ride also keeps a 10% fee from each transaction.
Ride encourages drivers to add more colleagues to their daily route until their vehicle is full. At that point, Ride offers to lend them a new van, all expenses paid.
“Carpools we discovered are 50% technology, 50% social.”
One of Ride’s advantages over Uber and Lyft is that all the passengers in a carpool are traveling to the same place. For that reason, it could become more popular in suburbs, where many workers still lack good options for commuting into the city other than driving themselves.
The company came together after TPG bought van-pooling company Van Pool Services Inc., a former subsidiary of Chrysler, in 2010. TPG hired former automotive executive Ann Fandozzi to relaunch the service. She first created vRide, in 2012, a service which leases vans to individual workers who then had to create their own carpool. VRide now has 70,000 users and generates $100 million a year in gross revenue, the company said.
Seeing the success of Uber, Fandozzi recruited Salazar to reinvent the concept for businesses.
Salazar said the design of the new mobile app also emphasizes the social aspects of commuting with the same people every day, on the same schedule. If someone needs more or less time in the morning, they can tell the others in their group.
“Carpools we discovered are 50% technology, 50% social,” he said. “We made our app very social.”
Salazar, Ride’s chief product and technology officer, leads a technical team of 12 based in New York. The company has a total of 260 employees, many of them based in Ride’s headquarters in Philadelphia.
The company has been testing its new service with students and faculty at Stanford University this year. It is now opening to businesses across the country, and has signed new clients including a major apparel company with its headquarters in Oregon.
Bill McGlashan, head of TPG Growth, said he sees Ride attracting a different group of users than Uber. His firm invested in Uber in 2013, when the ridesharing company was valued at $3.5 billion, a fraction of the $41 billion valuation investors placed on it in December.
Ride is “totally complimentary” to Uber, McGlashan said. “Our mission is very different with Ride. We’re taking people from the suburbs, who are already driving their cars, and taking them to their jobs.”