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Shared Moped Startup Raises $27.6 Million And Dodges Gig-Workers

FreightWaves

Shared mopeds are now competing with electric scooters and bikes to save congested city streets. 

Electric moped startup Revel just raised $27.6 million in a Series A round led by Ibex Investors. Other investors included Toyota Al Ventures, Blue Collective, Launch Capital and Maniv Mobility. 

Since its launch in 2018, the New York-based startup has expanded its fleets into Brooklyn, Queens and Washington, D.C. and plans move into other large U.S. cities with temperate weather and large populations. 

A Revel spokesperson told FreightWaves that this particular round of funding would help Revel expand in existing markets in Brooklyn and Queens, but by 2020, the company hopes to reach 10 cities. 

CEO and co-founder Frank Reig was inspired by the ubiquitous moped-use in Buenos Aires, Argentina, and he wanted to be the first to start this trend in the U.S. The mopeds, also known as motor-driven cycles, operate similarly to electric scooters in how they are deployed for public use.

To rent a Revel moped, you pay $1 per person to unlock it and after that, it's 25 cents per minute to ride. If you want to pause your ride, the fee per minute decreases to 10 cents. The maximum speed of the mopeds is 30 miles per hour, and they can be parked in any legal parking space. 

But moped users have a few more legal constraints than e-scooters, which may come as a relief to city officials and residents. Drivers must wear helmets, have a driver's license, be at least 21 years old, pass a safe driving history test and never ride on highways, bike lanes or sidewalks. 

In August, Revel expanded from its original base in New York City into Washington, D.C. with a four-month moped pilot program. The 2019 Urban Mobility Report had just named Washington the third-worst city in the U.S. for traffic congestion, but no decision has been made whether the mopeds will be kept beyond the initial four months. 

The District of Columbia Department of Transportation did not respond to an inquiry about the pilot program. 

"These mopeds are motor vehicles," Reig said. "This means there's no regulatory gray area; each moped has to have a license plate. To get that license plate Revel has to register each vehicle with the Department of Motor Vehicles in each state and show third-party auto liability insurance. And then because it's a motor vehicle, it's clear that it is ridden on the street, so we're completely off sidewalks."

As the largest scaled on-demand moped company in the U.S., a Revel spokesperson told FreightWaves that due to its stricter rider regulations, its main competitors are car rental services like Car2Go, instead of e-scooters. Car2Go, however, just announced the closing of its services in five U.S. cities. 

Another notable difference in Revel and other micro-mobility companies is that it does not hire gig-workers. All its employees are full-time, a deliberate choice by Reig to attract well-trained people who care about the product, which has a three-year lifespan. 

Reig cares about unit economics, and a big aspect of that is keeping the mopeds on the street and having employees switch out batteries and provide routine maintenance on them every four to six months. This practice departs from the Lime and Bird model, in which gig workers pick up the disparate scooters for a nightly recharge.

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