Rising home prices and conservative borrowing have today's homeowners sitting on a record amount of potential cash. Today's mortgage holders saw their home equity increase by...Real Estateread more
Stocks have been grinding sideways, but technical analysts say once they breakout, the move to the upside could be powerful.Market Insiderread more
The fresh round of cuts is on top of an estimated 4,500 temporary layoffs GM and its suppliers handed out to employees as of Friday.Autosread more
The new wireless earbuds, codenamed "Puget," are expected to come with an accelerometer and be able to monitor things like the distance run, calories burned, and pace of...Technologyread more
SpaceX is deep into development of its Starship rocket, with recent updates from CEO Elon Musk showing the first one under construction.Investing in Spaceread more
Greta Thunberg, a 16-year-old Swedish environmental activist, delivered a powerful message at the United Nations Climate Action Summit on Monday.Environmentread more
The Mac Pro is the only major Apple computer to be assembled in the United States. Most of Apple's products, including the iPhone, are assembled in China and are facing tariff...Technologyread more
SoftBank wants to push Neumann out of the CEO role ahead of the IPO.Technologyread more
Toys R Us' bankruptcy caused a 7% surge in sales for the toy industry during the first half of 2018 as parents stocked up, then sales fell 2% as manufacturers experienced...Retailread more
After an unexpected loss of subscribers and increased competition in the streaming war, shares of Netflix erased all of its 46% gain for the year at its peak and officially...Marketsread more
The UK's Civil Aviation Authority said Thomas Cook had now ceased trading and the regulator would work with the government to bring the more than 150,000 British customers...Europe Marketsread more
For some start-ups taking on Uber and Lyft, the road to growth is paved with happy drivers.
Two companies — San Francisco's DriverCars, and New York's Juno — are trying to lure drivers disenchanted with the two dominant players in the ride-on-demand market onto their platforms.
One of these start-ups, DriverCars, has even attracted an early investor in Uber — Keith Teare.
"DriverCars believes that the weak spot of Uber is the drivers, because as the prices are being constrained and the share taken from the drivers is going up, there's a lot of drivers starting to protest outside Uber's offices," said Teare.
With help from Teare's accelerator Archimedes Labs, DriverCars is raising a $1 million seed round. It then expects to raise its first institutional round of about $10 million. The goal is to launch the app within six months.
Founded by former limo driver Keith Hale, DriverCars' business model is subscription-based. Drivers pay $300 per month after they make their first $1,500, and get to keep all of their fares.
"There's obviously quite a big opening there for a software company that gives drivers the software to behave like Uber, but keep all the money," said Teare. "Now there's a fleet with iPhones on the dashboard and all it would take is for them to run a different piece of software to become your fleet."
That some drivers are unhappy with the dominant players is hard to argue with. Drivers in New York and San Francisco staged protests on Feb. 1 over Uber's fare cuts, which drivers said prevent them from earning a living wage. Uber said those cuts — initiated on Jan. 9 — were necessary to combat the post-holiday slump in demand, and that the reductions lead to more work, and ultimately higher earnings for drivers.
Another issue that drivers have with Uber is the lack of tips. Lyft said that its platform has paid out more than $65 million to divers in tips.
"The issue with Uber and Lyft's model is that it's really dependent on how far the drivers drive, and San Francisco is small," said Hale. The average Uber driver that Hale speaks to makes between $1,500 and $2,500 per month if they are working full time, he said. (Uber said driver earnings differ from market to market.)
Hale compared the business models employed by Uber and Lyft to those employed by strip clubs. "You can never have a repeat client with either model and you can't ever own the client, because the client belongs to Uber or Lyft," he said.
He said his model is a better fit because it was created by someone who actually works as a driver. "These are tech guys, so they have never been in the vehicle and they don't understand from a driver's perspective what we know," said Hale. "The drivers care about building a sustainable business and the ability to provide for a family."
Hale's goals are unarguably ambitious. He believes that within the first year the company will have 35 percent of Lyft drivers and 50 percent of Uber drivers. (Any driver can sign up with multiple companies, of course.) But convincing drivers may be the easy part.
The company's success, of course, hinges on persuading users to download yet another app. To do that, DriverCars is planning a mass marketing campaign and to leverage an army of drivers on the ground to spread the word.
Importantly, DriverCars rides will on average be 25 percent cheaper than Uber and the app will not have surge pricing, said Hale. The company will also offer some additional services, such as the ability to pre-book rides or specify driver gender for late-night pickups. As DriverCars gets ready to launch, Hale is secretly working with about 30 Uber drivers across several major cities on the West Coast to gather market data.
"What we're attacking is the market that Uber and Lyft has already created," said Hale.
On the other side of the country, New York-based Juno, currently operating in stealth mode, is also aiming to create a more driver-friendly service. Its website landing page invites drivers to "come meet us for coffee."
According to CB Insights, the secretive company was founded by Talmon Marco, who sold his last company to Rakuten for $900 million. Like DriverCars, it's leveraging Uber's existing fleet to gather market data, reportedly paying drivers to gather information.
The company recently rented a large office at 1 World Trade Center, said CB Insights founder Anand Sanwal. (CB Insights tracks private companies and their investors.)
"It looks like Juno has some resources and a successful founder at the helm based on what we could piece together," said Sanwal. "Whether Juno is some sort of other sharing economy play or a direct competitor to Uber remains to be seen." Juno did not respond to requests for comment.
Taking on Uber and Lyft is a tall order, of course. Uber — reportedly valued at $62.5 billion — hit its billionth ride in December. The company already has more than a million active drivers and is in 68 countries and 400 cities globally. Its nearest U.S. competitor Lyft, valued at $5.5 billion, has more than 315,000 drivers, operates in 200 U.S. cities and has international partnerships with Didi Kuaidi, Ola and GrabTaxi, and a gross revenue run rate of more than $2 billion.