Innovation: Ridesharing auction app
Ridesharing services have become a common form of transportation in Milwaukee, particularly among young professionals.
While the services, such as Uber and Lyft, offer a convenient way to request a ride from one location to another via a mobile app, there are a couple of aspects some users dislike, says Andrea Davis. For one, the existing ridesharing services use a surge pricing model, in which the cost of a ride can increase significantly during peak ridership times and large events, such as Summerfest.
Another concern among riders is safety, as Uber and Lyft drivers are contractors who sometimes do not have commercial insurance.
Davis has co-founded a new ridesharing service, called BidRide, which was launched in late April and is currently piloting in Milwaukee. She recently presented her startup at a meeting of entrepreneurship organization 1 Million Cups at Ward4 in the Historic Pritzlaff Building near downtown Milwaukee, where other innovators asked her questions about the company.
Growing up in her family’s taxi company, American United Taxi Co., Davis felt the industry was slow to innovate and adapt to the new transportation paradigm.
“Traditional taxis are perceived as slow, for good reason,” she said. “Most taxicab rides are not picked up within 10 minutes,” while Uber and Lyft rides often arrive more quickly.
Riders also perceive taxis as more expensive than ridesharing services, but Davis said that’s not usually the case.
“After we looked at the challenges, we looked at, ‘What are the opportunities? What can we do differently?’” she said.
BidRide is powered by an app, and utilizes American United’s existing licensed drivers and well-marked, fully insured taxicabs to provide ridesharing services, Davis said.
When Uber enters a new city, it must recruit both drivers and riders. BidRide has a leg up since it uses existing taxicab drivers with which it already has a relationship, she said.
“We already have the drivers. We just need to get them to sign up for the app,” Davis said. “They already have to have the appropriate amount of insurance for you to get in their cars.”
There are a couple of other key differences from existing ridesharing apps. For one, there is no surge pricing. The rider and driver agree to a price for the ride, plus a $1 bid fee, through an auction process.
“Since the rider and the driver negotiate the price, (the drivers) can make as much money as they want,” Davis said.
And BidRide’s drivers work full time, about 40 hours per week, versus ridesharing drivers, who often work about 10 hours per week in their free time, she said.
The rider downloads the BidRide app and inputs his or her credit card information. When the rider would like to go somewhere, he or she enters the pick-up and drop-off locations. The app suggests a price, and the rider makes the decision on what to offer, then puts the request out to the driver network. There is no minimum bid.
A driver can accept the price, make a counter offer or deny the bid. The driver can see a map within a 15-mile radius and which riders are making bids.
Multiple drivers can bid on the same rides. A ride’s status is indicated by a green, yellow or red dot. A green ride has not been reviewed, a yellow ride is in the bidding process and a red ride is in transit.
BidRide takes the flat fee and a small commission of each ride, but the tip is not included.
“Our main appeal is that we have the rider and the driver negotiate the price between themselves,” Davis said. “We have nothing to do with the price. Whereas apps like Uber and GetTaxi, they decide the price for you.”
The drivers use the service to supplement their usual taxi service. When things are slow, they often log on to the app to look for ride bids.
There is evidence riders like the bidding model, depending on their timeframe, said L. Maxwell McKissick of LMM Communications, who provides marketing services for BidRide.
“We’ve found that in our analytics, the customers are going back and forth quite a bit in the negotiation process,” McKissick said. “They’re liking the process a lot better, so they want to get that best possible price. And the drivers, if they’re also in a down period time as well, they typically go back and forth.”
BidRide currently has about 100 drivers and just more than 100 riders using the service, Davis said.
“We’ve steadily seen our user accounts increase every day,” McKissick said.
Attendees at Davis’ presentation asked about whether drivers would be using the app while driving. She said that would not be safe.
They also asked about BidRide’s biggest challenges.
“Well, like I said, we’re competing with Uber, which is already super popular. Probably getting into other cities. BidRide, we already own the taxicab company here in Milwaukee,” but the same is not true in other cities, Davis said.
Millennials are the target demographic for BidRide – particularly young professionals. The company is working to develop strategic partnerships to get the word out to that group. BidRide is also running a number of promotions to encourage sign-up, she said.
Currently, the BidRide app is available on Android devices and the company is working to launch an Apple app, Davis said.
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