These new companies are like Uber or Lyft for kids
Seven years ago, the notion of stepping into an unmarked car driven by someone who wasn’t a taxi driver would’ve seemed odd to most Bostonians.
Then Uber came to the city — followed quickly by Lyft.
Could the next shift in our transportation habits involve our kids? Two startups, Sheprd and Zemcar, already offer an app-directed car service for unaccompanied minors in Greater Boston, and a third, Los Angeles-based HopSkipDrive, is about to pull into town. They emphasize safety and thorough driver screening — including live dashboard video cameras and breathalyzer tests — but their user base is still tiny. Sheprd says it managed about 2,500 rides in September; that month, Zemcar drivers completed about 400 rides.
By contrast, last year there were nearly 65 million total rideshare trips in Massachusetts according to the state’s Department of Public Utilities, the vast majority served by Uber and Lyft.
Both Zemcar, based in Cambridge, and Sheprd, based in Newton, are small, with six and 10 full-time employees, respectively. Each has raised about $1 million in funding, and Sheprd is in the midst of trying to raise more; earlier this month, it e-mailed its customers with an invitation to invest in a new funding round that seeks to collect another $500,000 to $2 million.
HopSkipDrive has a much more impressive bank account, having raised approximately $20 million from investors. Last month, it posted a job listing for a driver operations associate to help established a beachhead in Boston. Vice president Mae Tuck didn’t want to comment on the specific timing of the company’s launch here, beyond writing via e-mail that “we have aggressive expansion plans.”
Zemcar is focused on helping parents build a roster of specific drivers — you can interview them in advance — and then book either recurring rides to an after-school activity, or one-time-only transportation. The minimum price for a ride is $15, according to CEO Juliette Kayyem, and an average ride is about $25. Drivers serve the Greater Boston area, she says.
Sheprd has been focusing on Newton and the surrounding communities, with a minimum price of $17. But Sheprd CEO Nick Jassett says one difference between the two services is that you don’t get to choose your driver with Sheprd, and the service aims for most of its rides to be carpools. Handling two or more customers an hour is a key to profitability, Jassett says, and that often involves multiple passengers sharing a ride.
For much of the 2017-2018 school year, that wasn’t happening, he admits. “We learned a lot,” Jassett says, but he and the company’s employees were also feeling “pretty bummed out.” Word-of-mouth, and marketing partnerships with a small group of Newton private schools, seems to be helping. In August, Sheprd customers pre-booked 15,000 rides for the coming school year, Jassett said.
If Sheprd successfully raises more funding, Jassett says the company hopes to expand to Brookline, Needham, and Dedham, and eventually also to Fairfield County, Connecticut, and Westchester County, New York. This week, the company ran into a dustup with the state Department of Public Utilities after a Globe inquiry related to this column; Sheprd wasn’t complying with certain regulations that govern ride-sharing companies in Massachusetts and had to shut down part of its service until it does. It can continue operating its own fleet of vehicles — Land Rover SUVs — but can’t have Sheprd drivers using their own vehicles for the service, which forced it to cancel some customers’ scheduled rides.
Beyond that, both Sheprd and Zemcar face the same three big challenges: recruiting drivers, building awareness, and convincing parents to trust them.
“The challenge of driver acquisition is real,” Kayyem at Zemcar says. That’s in part because Uber and Lyft have spent seven years signing up scads of people who want to earn some extra dough in their free time. But also because Sheprd and Zemcar have higher standards for who can get behind the wheel. “We require two years of care service — someone who has been around kids, and been paid to take care of kids,” Kayyem says. At Sheprd, drivers take a drug test before they’re hired, and before every shift they blow into a mobile breathalyzer to prove they’re sober, Jassett says.
Uber and Lyft, both still privately held companies, have together raised about $26 billion in funding. (Yes, that’s a “b.”) That pays for a lot of advertising intended to attract drivers and riders to their networks. Jassett says that Sheprd relies mostly on word of mouth, though the company did spend about $50 on Facebook advertising in September. Kayyem says that Zemcar is counting on moms telling other moms.
But she says she also hears from lots of parents who tell her, “‘That is the best idea ever,’ but then when I follow up and say, ‘Are you using us?’, they haven’t tried it yet,” she says.
Part of the reason is the complexity of managing pickups and drop-offs for young ones. (Jassett says Sheprd’s average rider is just shy of 8 years old.) There are logistical reasons: “Our son isn’t quite old enough to walk outside and wait by himself for the car,” says Nick Ducoff of Newton, who downloaded the Sheprd app but hasn’t yet used it. Price can be a factor: “It seems extremely expensive,” says Kara Peterson of Newton, adding, “Also, my kids really don’t like the idea of riding with strangers.”
It was hard — without relying on the companies to connect me with predictably happy customers — to find someone on my own who had tried either Zemcar or Sheprd. But Yuri Ramos of Arlington said he had used Zemcar to ferry around his 12-year-old daughter. The key problem, Ramos said, is that “they need more drivers. At times, I posted a ride two or three days in advance, but did not get drivers.” Eventually, he decided to hire his own driver — a more expensive option.
While it was tough to identify local parents who have tried Zemcar or Sheprd, given their small collections of users, I easily found a handful of parents who allow their kids – usually teens — to take Ubers and Lyfts on their own. Adam Medros of Arlington told me that his 13-year-old only uses the Uber app “for emergencies,” but his 15-year-old uses it every few weeks. “We like that we can track their ride and encourage the kids to call us while on the ride if they are nervous,” he says.
Technically, that’s against the terms of service that both Uber and Lyft have published. Both companies say that passengers traveling alone, or setting up an account with the apps, must be at least 18. Uber spokeswoman Kelley Gossett says that when the company discovers that happening, it deactivates the user’s account.
But as with many aspects of this new world of transportation, what is actually happening in the real world is racing ahead of the companies’ ability — or government’s ability — to monitor it. At some point, that could create a problem that regulators will need to deal with. But for now, it’s creating an interesting source of competition for Zemcar, Sheprd, and other car services that hope to chauffeur kids.
Note: On Oct. 27, after this column was published, Sheprd sent an e-mail to customers notifying them that it was ceasing operations. The company’s CEO said that investors were reluctant to put more money into the company after the Massachusetts Department of Public Utilities asked Sheprd to temporarily stop operating part of its business.