Employee-Driven Rideshare Powered by Telematics

Paul Myles

TU-Editor

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5th October 2022

Telematics may have taken something of a back seat in terms of passenger car technology lately but it is still the driving power for one mobility provider’s growth plans.

Start-up rideshare company Alto says it is carving a place in the market focused on employee-based premium vehicle private hire transportation, totally at odds with the bargain-basement offerings from provider such as Uber and Lyft. Alto says it has been building out a data infrastructure with telematics to lead a “new age of rideshare”.

The company’s strategy is one where it owns, maintains and fuels its entire fleet. Its vehicles gather data with every ride, similar to Tesla’s data collection, and uses this on rides to better navigate roads and cities. It claims telematics offers distinct advantages including:

• Vehicles are equipped with cloud-based telematics to track the driver’s behavior and ride quality, monitoring speed and G-forces on stops/turns;
• In-car video monitoring and forward looking dashcams are standard in all rides to ensure safety and timely responses from Alto HQ;
• All of this data is currently being relayed from the car to the cloud for monitoring and analytics.

So, TU-Automotive caught up with Alto CEO, Will Coleman, to find out how he sees the service growing from the six US cities in which it is currently operating. He admitted the service is not targeting the budget taxi market, saying: “We are more expensive than other providers but then we believe we are creating value for the customer that makes it worth the higher price. It’s a price we think is fair because it’s a price that is required in order to sustainably able to operate a passenger fleet. That said, we are significantly less expensive than, say, a limousine service by 15% to 17% less than those sort of options so we think it’s a really value orientated accessible luxury vehicle experience.”

While most logistics drivers for heavy haulage companies are well used to the ‘spy-in-the-cab’ telematics technology, cab drivers may not be so keen? Not so, said Coleman: “For the driver we offer the same sort of advantages as for our customers. We offer safety in a new well-maintained quality vehicle. Many drivers can’t afford, individually, to be in that kind of environment, with no headaches around maintenance or insurance so we take away all the variability that might exist if you are an independent contractor. Also, they know how much they are going to make based on the number of hours they are going to work not on how busy the platform is or how many rides they are going to get.

“In particular in environments such as today, when you are facing rising fuel costs and food costs, having that certainty of earnings is really important to our drivers to know they can take car of themselves and their families. Then we wrap all that in with health benefits, dental, vision – the things you just cannot get as an independent contractor. So, our drivers really value the protection of being employed.”

While many may think the own-it-all fleet model may have struggled with the global semi-conductor shortage, Coleman said his company’s experience has been anything but negative. He explained: “We have deals in place with OEMs that mean we are able to get new cars much easier than a normal consumer would. It has also created an upside for us in that our cars are worth more [when sold on] and so we have created a lot of equity in our fleet. We also get to realize that equity by turning over our fleet faster than we had even anticipated. Of course, newer cars make a better experience for our customers also we spend less on them because the residual value is so high that, in many cases, we make money like rental companies would on buying a selling our fleet.”

So, where now for Alto’s growth ambitions? Coleman said: “We have such a huge opportunity here in the US alone, quite frankly, with what we see as a $60Bn market and we have a lot left to do. We are in six city markets and we want to be in 25 within the next three years including Boston, Chicago, Atlanta, New York and Phoenix. However, we also see the regulatory environment in places like London, Germany and Spain being really attractive alone with parts of Latin America.”

— Paul Myles is a seasoned automotive journalist based in Europe. Follow him on Twitter @Paulmyles_