Uber transformed transportation when it spent a fortune turning ride-sharing into a mainstream mode of transportation. But the 2.0 version of ride-sharing is where the real disruption begins. It fixes everything that’s wrong and latches onto a mega-trend the giants shouldn’t have ignored: ethical investing. This is where drivers get a boost, riders get a choice, and CO2 goes neutral.
In an exclusive interview with Oilprice.com, Facedrive CEO Sayan Navaratnam discusses:
• What Uber got wrong
• What Facedrive got right
• What the new ride-sharing model looks like
• How green ride-sharing can please everyone
• And why we should really be paying attention to millennials on this growth runway
OP: The ridesharing space has exploded over recent years. How much more growth is left in the market?
SAYAN NAVARATNAM: There is a ton of mileage left on this growth runway for a very important reason: Millennials, and the younger generations in general, are increasingly opting out of car ownership. That’s the future. It’s a future of mobility without car payments, without parking payments, and without hassle. And it’s all being boosted further by rising vehicle prices and increasing fuel prices.
There are a lot of numbers out there for growth, and they’re all good. Market Research Future forecasts 20% growth for 2018-2023 … and we’re still in the early stages of adoption in many places.
Take Toronto, for example. Compared to other North American cities, Toronto is behind, but it’s seen consistent growth. And trends in rideshare growth suggest the market is not saturated and that growth will continue for the foreseeable future.
This was just ‘Ride-Share 1.0’. ‘Ride-Share 2.0’ will blow that away because it picks up on things that the first round didn’t while it was testing the market for a brand new idea.
OP: You are being called the climate friendly Uber and the ridesharing app for the environmentally conscious – how did the idea come about? And why do you think the industry is primed for disruption?
SAYAN NAVARATNAM: Listen, we’re all about grabbing onto the biggest trends in tech before they’re mega-trends. So that takes us back to 2016, when we first came up with the idea. Whenever a major new trend emerges, it’s the job of the truly innovative to step back and say ‘OK, this is an explosively great idea – so what’s wrong with it?’ When you figure that out, and you’ve got the right network and the right people behind you, you can jump in on one of the biggest trends and disrupt a massive market at exactly the right time.
We saw what was wrong, and what was wrong was that this great idea emerged pretty much at the same time as environmentally friendly investing began to become more than just a passing fad.
No one really saw it at the time, but the past 12 months have solidified it, and Facedrive got out in front of it a couple of years early. We saw the opportunity for Facedrive to be the technology of choice that would bring ride-sharing customers something they’ve never had before: A choice.
We gave them a choice to go electric, or hybrid – or stay conventional. And we let them be responsible consumers regardless of their choice by offsetting CO2. In many ways, our technology is an equalizer in a world that has become extremely polarized. Things like ‘flight-shaming’ don’t help. Choice does because with choice comes responsibility, without shame. Everybody wins.
OP: How, exactly, is Facedrive climate friendly? What’s the process?
SAYAN NAVARATNAM: It’s all about incentivizing both customers and drivers.
Facedrive pays drivers who drive electric or hybrid cars up to 85-90% of the fare to incentivize more eco-friendly vehicles on the road, while our competitors provide drivers with 70% of the fare. Through such incentives, we are actively changing behavior among drivers to reduce the CO2 emitted.
On the riders’ side, they can request EVs, hybrids, or gas-powered vehicles through the Facedrive App.
And it’s all seamless.
Our in-app algorithm calculates estimated CO2 for each journey and allocates a portion of the fare for carbon offset through tree-planting initiatives. We’ve got a partnership with Forests Ontario and other local tree-planting organizations.
In other words, you ride, you plant a tree. It’s simple.
And you can also track the number of trees you’ve planted on the app itself, as well as the impact of your decision to ride green. Last year alone, Facedrive planted over 3,500 trees in Ontario.
OP: Your larger competitors such as Uber and Lyft seem to be burning cash on an industrial level, and profitability seems very far away. How is Facedrive doing things differently than its competitors?
SAYAN NAVARATNAM: Quite simply, Facedrive doesn’t have to make the same capital investments that our competition made in marketing and navigating city bylaws. That’s already been done in ‘Ride-Sharing 1.0’. We’ve already seen the shift to ride-sharing as a popular mode of transportation, so Facedrive is better positioned to target riders and convert users to our platform based on our core values.
To put it another way: Ride-sharing has already been sold to the public. It takes a lot less money to sell the improved version that represents a win for everyone.
OP: Uber and Lyft have prioritized rapid expansion over a healthy balance sheet, taking on extra debt and offering mind-blowing discounts to penetrate new markets. What is Facedrive’s plan to enter new markets?
SAYAN NAVARATNAM: Again, we don’t have to prioritize in the same way, plus we’re offsetting CO2 at the same time—and without any premium to the cost.
We don’t blow out the balance sheet because when we launch in new cities, we test on a niche target audience first, like students and the environmentally conscious individuals. Afterwards, we fine-tune based on feedback and expand to the general public.
We have been operating in the Greater Toronto Area, London, Hamilton, Kitchener-Waterloo, Cambridge and Guelph. We will be launching in Orillia, Ottawa and Vancouver, B.C. soon. After that, later this year, it’s either the U.S. or the European market, so stay tuned for that progress.
OP: Uber and Lyft have spent tens of billions to build market awareness for ridesharing. How do you plan on taking market share away from them?
SAYAN NAVARATNAM: We know this is a two-sided market, and I don’t think the giants have recognized that quite enough, and they will pay for it. The two sides to that market are riders and drivers. If both aren’t happy, this doesn’t work – or it only works for a while, until something better comes along.
One of our key focuses is providing better one-on-one customer service support for riders and drivers, while also developing key partnerships within the regions we operate to build grassroots support.
Facedrive is also committed to staying affordable.
For example, we have successfully been able to get 20% of the market share in one of the cities within 6 months of launch. We have a lean business model that can be replicated as we continue to expand cities across the country and the global market.
OP: What other developments do you expect to see in the ridesharing space over the coming years?
SAYAN NAVARATNAM: We believe super apps will be the future of rideshare, because ride-sharing is as much about tech as it is about anything.
A full ecosystem with delivery, entertainment, gamification, social components with rideshare market being the core. So users can have access to everything from getting to work to eating to shopping – all in a single app. It’s the epitome of convenience with the huge added bonus of being green.
OP: As you’ve noted, ethical investing is getting huge traction. How do you plan on attracting these investment dollars and what sort of responses are you getting from institutions?
SAYAN NAVARATNAM: We are just being true to our core values of being an environmentally conscious and socially responsible company and that has enabled us to gain noteworthy attention from the investment community. These days, with ethical investing turning into a mega-trend, and the market for ethical services hardly being saturated, once the word spreads, institutions come calling.
There is a significant shortage in the marketplace for institutions and funds who are looking to invest in ESG companies. And, again, Facedrive got out in front of this well in advance. We saw the growing trend and we were ready when it went ‘mega’.
OP: In 5 years’ time, or 10 years’ time, where do you see Facedrive? What is the long-term vision?
SAYAN NAVARATNAM: Five years out, I’m sure we’ll be a household name, and not only known as a rideshare company. By then, we will have expanded to a one-stop shop for conscientious access to transportation to work, food delivery, shopping – any errand that can be done for you to make your life more convenient.
But we also plan to turn Facedrive into an extension of public transportation, especially in smaller municipalities that don’t have capital investments for transportation infrastructure.
Facedrive can be a solution to combat transportation issues, and that makes us welcome friends of local administrations. That, in turn, creates mountains of opportunities.
OP: What sort of reception are you getting from people who find out about the company and what you are doing?
SAYAN NAVARATNAM: The response has been overwhelmingly positive – and, importantly, from all interested parties: drivers, riders, officials, investors and the general public. Many support and align with the core values of the company – eco-friendly, responsible, sustainable, affordable. But again, without the shaming and polarizing effect.
OP: The idea is great – but how is the business actually doing? Are members of the public signing up and actually using the service?
SAYAN NAVARATNAM: Currently, we have 74,018 users who have downloaded and created an account on the Facedrive platform. We had over 53,000 ride requests in the month of January 2020 alone. That’s a 226% increase since August 2019.
Of the riders who become active, close to 40% stay active monthly. This number is consistently increasing due to the increase in the number of drivers coming online. Most of the growth is organic, with very few dollars spent on advertising or marketing campaigns. That’s why Facedrive’s ‘Ride-Share 2.0’ is so potentially disruptive.
OP: Sayan thanks for joining us and good luck with all of the exciting developments that are taking place at Facedrive.
For those of you interested in learning more about the Facedrive app, you can find out more at: https://www.facedrive.com/
As Facedrive leads the charge in Canada, other tech giants are spreading their ingluence across the world. From the United States to Europe and Asia, the future of mobility is quickly shifting away from traditional taxis to greener tech-driven alternatives.
Here are 5 global companies reshaping the world of transportation:
1 – Uber Technologies Inc. (NYSE: UBER)
The big story in tech last year was the Uber IPO—the ride-sharing app joined the market with a tepid showing, and it hasn’t done much business since.
It’s the cherry on top of a cake of trouble for the revolutionary tech company, which has suffered from a mountain of bad press. It’s controversial CEO Travis Kalanick was forced out over his behavior and the company’s struggle to generate revenue, but the new management hasn’t been able to do much better.
Uber keeps burning through money: in Q2 of 2019 it posted a $5 billion operating loss, linked in part to the expensive IPO.
Bears have been circling the wagons for a while, warning the Uber’s ration is unsustainable. But bulls have been quick to point out how other revolutionary tech companies like Amazon and Facebook posted losses after their IPOs, before going on to become fabulously profitable.
Plus, Uber’s losses are linked to its IPO and its rapid expansion rate: once the company solidifies its dominance of ride-sharing and makes inroads to self-driving cars, Uber’s profits are likely to prove sturdy.
Moreover, while $5 billion sounds like a lot, it pales in comparison with what other big companies have suffered through—GM posted $48 billion loss in 2009, and it’s held on despite it.
2 – Lyft (NASDAQ:LYFT)
Lyft may be a bit overvalued, but it’s still sustainable.
Lyft went public in March for $87.24 and hit $88.60 on the first day of trading.
It’s shed over half that and has been treading water ever since. Lyft’s next earnings report is due on October 30th.
But $36 makes this a cheap stock for a ride-sharing market that’s killing taxi cabs and cutting in on car sales, too.
Right now, Lyft is valued at 4x its sales, and it’s still losing money—like Uber. But it does have over $3 billion in cash, and it is investing in micro-mobility, too, through bike-sharing startups.
3 – General Motors (NYSE:GM) has created its own brand of electric bikes, called Ariv. The bikes were just launched this year, but have already captured the attention of the European market.
While they err on the side of pricey, coming in at $3,800 per unit, they do boast a high top speed and can travel a modest distance on a single charge.
The kicker for many, however, is that they can fold into an easily carriable pack, making them the perfect choice for a lot of commuters. Especially in big cities like London or Berlin.
4 – Ford (NYSE:F) is taking a different approach. It’s swooped right into the scooter market, buying Spin for a clean $100 million.
Initially deployed in San Francisco back in 2017, Spin is widely considered to be a part of the Big Three of the scooter world, along with Lime and Bird.
While Ford’s buyout of Spin made headlines, it’s certainly not the first urban transportation alternative Ford’s sunk its teeth into.
In recent years, Ford also bought commuter shuttle service Chariot, Autonomic and TransLoc, aiming to ensure that it does not miss the boat as this new movement accelerates.
5 – BAIDU (NYSE:BIDU), for its part, is taking on the automated car market. With more miles under its belt than any of its competitors in Beijing, it’s an easy choice for a number of investors.
Likewise, it has an equally large portfolio of innovative new technology…at a lower entry point than its competitors.
As the ‘Chinese Google,’ Baidu is following a similar path to its American counterpart. It began as a search engine but is quickly expanding into almost all things tech related.
>From artificial intelligence to television and finance, Baidu’s ever-expanding reach is a not to be ignored. Especially for investors looking to stay on top of the new tech trends.
But back in Canada, the domestic tech boom is also helping to reshape the industry.
Here are 5 Canadian tech giants to watch as the new-mobility race heats up:
1 – Power Financial Corp (TSX:PWF) has been in the finance industry since 1984. The company operates in three segments: Lifeco, IGM and Pargesa Holding SA (Pargesa). And, with its holdings in a diversified portfolio spanning the United States and Europe, Power Financial is a leader in its field.
Focusing its investments in emerging industries, Power Financial stands to benefit by riding this wave into the future. The company’s forward-thinking attitude and liberal approach to technology is sure to leave investors satisfied.
2 – Kuuhubb Inc. (TSX: KUU.V) is a company active in the development and acquisition of lifestyle and mobile video game applications. Its strategy is to create sustainable shareholder value through its groundbreaking AI and big data applications suggest that its stock is currently undervalued, but it’s not likely this opportunity will last for much longer.
Though it’s focus is on mobile video games, Kuuhubb’s innovative technology and focus on Big Data makes it a likely target of acquisition and could be a key player in the mobile industry.
3 – The Descartes Systems Group Inc. (TSX:DSG) (commonly referred to as Descartes) is a Canadian multinational technology company specializing in logistics software, supply chain management software, and cloud-based services for logistics businesses. The company is making waves in the tech industry with its futuristic products and visionary leadership.
Recently, Descartes announced that it has successfully deployed its advanced capacity matching solution, Descartes MacroPoint Capacity Matching. The solution provides greater visibility and transparency within their network of carriers and brokers. This move could solidify the company as a key player in transportation logistics which is essential in the world of commerce.
4 – Kinaxis Inc (TSE:KXS) is a provider of cloud-based subscription software for supply chain operations. The Company offers RapidResponse as a collection of cloud-based configurable applications. The Company’s RapidResponse product provides supply chain planning and analytics capabilities that create the foundation for managing multiple, interconnected supply chain management processes, including demand planning, supply planning, inventory management, order fulfillment and capacity planning.
Kinaxis is a growing company, but the company has already carved out a significant piece of the pie. As a leader in its field, Kinaxis is a force which investors are keeping an eye on.
5 – Computer Modelling Group (TSE:CMG) is a software technology company producing reservoir simulation software for critical infrastructure. Computer Modeling Group LTD. Is a tempting trade for investors as it brings together two essential industries – tech and resources- which are going anywhere any time soon. Especially as the need for security grows, a tech company involved in the oil and gas industry has an incredible opportunity to offer other services.
While Computer Modelling Group focuses on the resource industry, its technology is definitely breaking ground. Founded nearly 40 years ago by Khalid Aziz, a renowned simulation developer, the company has proven that it has staying power. As the resource industry meets technology, this will be a stock to pay attention to.
By James Stafford for Oilprice.com