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How this ride-hailing startup is learning from Uber's mistakes

Melody Hahm
Reporter

While locals have adjusted to an Austin, Texas without Uber and Lyft, the nearly 100,000 South by Southwest attendees who descended upon the city last week weren’t so sanguine.

Out-of-towners might not have been familiar with alternatives that have cropped up, but startups like Fasten and Fare have been filling the void that Uber and Lyft left behind. The two behemoths opted to leave after voters decided to keep regulations on ride-hailing services — like fingerprint-based background checks.

Source: Ride Austin

One service, Ride Austin, started by replicating the standard model — charging 20% commission on all rides — and has since pivoted to a radically different approach: it’s operating as a nonprofit. Now, Ride Austin is a 501(c)(3) funded in part by cash donations and volunteer hours from the Austin tech community. Ride Austin has also teamed up with charities across the city, making it easy for users to “round up” their fares, so they can donate a few cents to a cause of their choosing.

The driver gets 100% of the fare that the passenger pays but Ride Austin takes a $2 booking fee, 1% city fee and a small processing fee. This leaves a lot of the fare in the pockets of the drivers.

Source: Ride Austin

CEO Andy Tryba told Yahoo Finance that witnessing Uber CEO Travis Kalanick’s tumultuous few months has been a wake-up call for him.

“Perhaps [Travis’s] company culture and his mentality is a little bit different than the way that we run Ride Austin. Of course, we’re built from the ground up as a community asset. So I think that [community] mentality permeates through all of our drivers and all of the people that we have,” she said.

Ranging from the consumer-led movement to #DeleteUber to allegations of sexism and sexual harassment, the latest troubling press to sully the company came on Sunday, when Uber’s President Jeff Jones — the company’s No. 2 executive — resigned after only six months.


“It is now clear, however, that the beliefs and approach to leadership that have guided my career are inconsistent with what I saw and experienced at Uber, and I can no longer continue as president of the ride sharing business,” Jones said, in a statement to Recode.

Tryba said Kalanick has “got a really tough job,” and that he must give credit to where credit is due.

“At the end of the day, it’s really Uber that’s really pushed this market forward and he’s having to fight a lot of issues with governments around the world as he brings it into a bunch of different markets. I think he gets put in a really tough position so I feel his pain,” he said.

But, Tryba said being a non-profit has helped ensure the company can grow at a measured pace and maintain a balanced work culture. Tryba is also the CEO of Crossover, a job placement startup based in Austin.

Seeing the opportunity to build a ride-sharing business, Tryba said, “Obviously with Uber and Lyft deciding to leave the city, that left a huge hole where we had 10,000 drivers that were instantaneously out of a job. And you had another 125,000 rides that were going around on a weekly basis. Those are people that are part of the community. What we wanted to do was really get the city back up and going and look forward as opposed to complaining and looking backward.”

Ride Austin’s road ahead

Though the company has only been around for nine months, it has experienced a few hiccups along the way, experiencing an outage of several hours the first weekend because of such a huge surge in demand.

Still, Tryba said the company has done over 125,000 rides during the 10 days of SXSW, and has been in communication with local government officials across the country, who are curious about the alternatives to incumbents like Uber and Lyft.

“We’re still super new. We are absolutely learning every single day. In human terms, it’d be a baby just barely crawling right now,” he said.

But Tryba said that above all else, providing transparency is his No. 1 value — for both drivers and customers.

“It’s very natural for new companies to go through these ups and downs. We hate it but as long as we learn from it, and as long as we’re also open about it. We truly believe that [being] open and honest and transparent about everything that goes on within our world is really important to us.”

Melody Hahm is a writer at Yahoo Finance, covering entrepreneurship, technology and real estate. Follow her on Twitter @melodyhahm.

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