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The CEO of one of Uber and Lyfts hottest rivals reveals why the DNA of his company is fundamentally different from its competitors and how it can replace the private car


Daniel Ramot, the cofounder and CEO of Via, on the floor of the New York
Stock Exchange.

AP Photo/Richard
Drew


  • Via — a ride-hailing company that focuses on shared rides — wants to
    eliminate the need for personal vehicles.
  • On the consumer side, its drivers make more money than
    those at Uber and Lyft, through a more efficient algorithm
    described as a “virtual bus stop.”
  • For cities, the company is licensing its software to
    run on-demand buses and even operates the entire network in
    some towns.
  • We sat down with CEO Daniel Ramot to talk about the
    business, his competitors, public transportation, scooters, and
    more.

Every morning throughout New York City, Chicago, and Washington,
DC, a fleet of black vans emblazoned with bright blue logos take
to the streets. If it weren’t for the Via logo, they’d blend
right in to the fabric of other ride-hail vehicles, personal
cars, and taxis.

But under the surface, Via is hoping it can increase its market
share above the tiny fraction it currently holds by convincing
people that a shared ride is better for everyone.

The company, which draws inspiration from shared taxis in Israel
called sheruts, has raised $387 million in four rounds of
venture-capital funding and is active in three US cities as well
as several others in
Europe through a partnership with Mercedes-Benz
.

CEO Daniel Ramot has plans well beyond passengers ordering cars
to get from one place to another: He wants to invent what he
describes as an “operating system” for public transportation, one
that would radically change our notion of a public bus and —
eventually — eliminate the need for personal vehicles.

Today, Via operates the entire public bus network in Arlington,
Texas — replacing the traditional vehicles with on-demand shared
vans. Its software enables other cities to do much the same with
their public transit agencies.

Business Insider caught up with Ramot to talk about what got the
company to this point, how he views its mammoth competitors like
Uber and Lyft, and what’s next for Via:

This interview has been lightly edited for length and
clarity.

Graham Rapier: Obviously Uber and Lyft are two
of your largest competitors. What differentiates Via from other
companies in the ride-hailing space?

Daniel Ramot: We see ourselves as being in a
different category from Uber and Lyft, and I don’t just say this
as a way to address the question of competition. It’s been the
way that we’ve thought about Via from the very beginning.

We were really focused from the very beginning on creating
technology and a service that is all about better public
transportation. Essentially, we think of Via as a dynamic,
on-demand bus solution, and that’s really the way that we started
to think about the company from day one.

Uber and Lyft, at least in my sense, have come at it from “how do
we make a better taxi?” Now they’re adding other types of
mobility, but the focus for them has not been around creating
better public transportation or bus experience.

I think that that sort of then translates into maybe at least a
couple of different elements:


via daimlerDaimler

One is that the technology we’ve developed is really geared
towards creating a mass-transit solution where we’re trying to
optimize the utilization of every seat. It’s really about
thinking about things in that way, to reduce by using larger
vehicles and driving the efficiency of the system as sort of the
core goal.

The other is the way that we’ve historically approached working
with cities and public transportation agencies; our goal has
always been to be closely aligned with them and much more
collaborative. The DNA of the company is very, very different.

Rapier: A lot of your focus seems to be on
improving public transportation — why that and not just another
ride-hailing service?

Ramot: When we founded the company six years
ago, we were thinking about “How do you make public transit
better?” and looking around it was clear that public
transportation was a space that just had very little technology
in it — we used to call it insulated from technology.

We were inspired by this van-based system in Israel called
sheruts, where taxi vans simply run fixed routes like buses, but
smaller and faster, and you can flag them down anywhere along the
route. We had the idea of taking that system and, through
technology, allowing those vehicles to be routed dynamically in
response to demand.

As we started to think about that solution, Oren, my cofounder,
and I had this sense that this was going to be the future of
public transportation. We really believed that, at some point
down the road, there will certainly still be buses for
high-capacity routes, and maybe only during peak hours, but not
all times. It was clear to us that many of the areas that we
currently serve with buses could be far better served with these
more agile, dynamic, data-driven, on-demand solutions.

Over time, we’ve come to think that it’s actually potentially
much bigger than that. Not only can this help us replace
underperforming bus routes or complement bus systems, but
eventually, if you get the system to be good enough, you hit a
certain combination of convenience and cost that could start to
replace the private car — which is, in that sense, the holy
grail.

How do we get people out of their cars? It’s very hard to do with
a bus — it hasn’t worked for dozens of years. Subways work very
well, but they’re extremely expensive to dig, and most cities
don’t have the density or size to really support them.

Rapier: But isn’t the beauty of a (well-planned)
bus system that you know when and where it will show up, with at
least some regularity, and where it’s going to go?

Ramot: I think the psychology of it is probably
complex. I don’t mean to oversimplify it, but I’m not convinced
that what you just described isn’t just what we’ve gotten used
to. If you actually take a step back, it isn’t that normal to
show up at a bus stop and just wait there, not knowing where the
bus is, when it will come, and whether it will be too full or you
can find a seat. I think it’s just something that, due to lack of
information and technology, we’ve become accustomed to. It makes
a lot more sense if you can open your phone and say “I want to
get from point A to point B” and within seconds the app says “OK,
walk 100 meters to this corner, and your vehicle is three minutes
away” — makes a lot more sense.

Rapier: What about people without phones, like
kids, the elderly, or those who can’t afford it?

Ramot: Usually the cities we work with, whether
it’s directly with the municipality like in Arlington or a public
transit agency, they are definitely concerned about that. When
we’re running a consumer service, our customers are people who
have phones — we would love to get the people who don’t have
phones too, but it’s OK, from our perspective, that we don’t
provide service if you don’t have a phone with an app on it. But
for a city like Arlington that would not be OK.


ViaVia

We have a call center that you can call in, as well as several
other ideas that we haven’t necessarily implemented. For example,
you have at the bus stations or strategic locations a tablet that
you can walk up to and simply order your ride from there. We
could also have a web interface so you can go online and book a
ride there.

Rapier: How did the arrangement with Arlington,
Texas, come about? How did you convince an entire city — the
seventh largest in the state — to let you run the entire public
transit system?

Ramot: We basically spent the first years the
company building the technology. Once we became convinced the
technology was really working, we starting going to transit
conferences, speaking about what we’re doing and getting to know
folks in the business — especially on the municipal and transit
agency side. We ended up getting connected with the folks at
Arlington and talking to them about what a solution could be for
their city and how we would envision it.

Those talks led to an RFP (request for proposal) for an
innovative on-demand public transportation service. There were
actually quite a few companies that responded and we ended up
being selected through that procurement process.

Rapier: What’s the breakdown of your public
transit versus consumer businesses? Are they equal, or is one
much bigger than the other? Which is your biggest focus right
now?

Ramot: Our consumer offerings in New York,
Chicago, Washington, DC, and some European cities through a
partnership with Mercedes-Benz is still the biggest part of our
business today and continued to grow very quickly.

The part of the business where we are partnering with cities —
either like the one in Arlington or simply providing the software
to a transit agency — is rapidly growing. I suspect that within
not too long will become an equally large and important part of
the business.

But if we take a step back, the way that we see what we’re doing
is not as two separate businesses but one solution. We like to
think of this as an operating system for on-demand shuttles. It’s
an extremely efficient format that we’d like to deploy all over
the world. The question then becomes what is the best way for us
to enter all of these cities. Sometimes we decide that it makes
sense to launch our own service as we did in New York and London.
Other times it may be better for us to partner with a city or
agency.

Rapier: Let’s talk about the directly operated
services. Subscription plans are hot right now, with Uber and
Lyft both announcing them in the same week, but you’ve had Via
Pass for years. How’s the response been to that?

Ramot: Our subscription service is quite unique
in that we’re the only one where you simply pay up front and then
get unlimited (up to four) rides per day, much like a MetroCard
in New York. (Editor’s note: A 30-day pass for New York’s subway
and buses is $121; a Via pass is $255 a month.)

The service doesn’t have dramatic price fluctuations that you
might see on other platforms. To us, if you’re going to take one,
two, or four rides today, we know about how much they’re going to
cost.


Via van appVia

Additionally, a lot of our businesses is commuters — they were
the foundation of the service and a big part of what we’ve always
done.

Rapier: What about the algorithm — how is the
routing different than that of say Lyft Line or Uber Pool?

Ramot: The system we’ve developed is all about
getting as many people as possible in the vehicle while
guaranteeing a route that makes sense and not being taken out of
your way. Still, hopefully, we’re able to find a number of other
passengers whose routes overlap and can all ride together with
minimal disruption.

This has always been key, but we realized early on that for this
to even have a remote chance of working we’re going to have to
ask people to walk a little bit. If we try to pick you up exactly
where you are and drop you off exactly where you need to go, that
imposes pretty strong constraints on the route of the vehicle and
can force large detours.

We very quickly realized this and then developed sophisticated
technology around figuring out what we call “virtual bus stops”
and the best way to route vehicles. These really complicate the
computations — it’s no longer just the shortest route between
your origin and destination but a cloud of possible pickup
points.

Shared rides have always been our focus, and we didn’t offer
private rides until about a year ago. Still, about 95% of our
requests are for shared rides. The vast majority of people
obviously think about it as a shared service. I can talk a lot
and tell you why it’s different, but I think that number speaks
for itself.

Rapier: What about for drivers? Is your pay
scale or driver app any different?

Ramot: There are a few key differences around
the driving experiences and pay. Drivers on the Via platform are
very used to following the Via app. They’re provided with a route
at all times, including when they’re empty. A big part of the
efficiency is that we know exactly where they are and where
they’re going to be, so we can balance out where all the empty
seats are throughout the city.

If you imagine having all the vehicle take the fastest route,
which might be Park Avenue for example. It’s very beneficial for
us to have some vehicles go down Lexington, some go down 2nd, and
so forth so that we’re always matching available seats and where
they will be 10 minutes from now.

This driver guidance helps contribute to our significantly higher
utilization rate than other platforms, which then also translates
into higher earnings per hour. If you look at the
most recent TLC report
, the median Via drivers were making
50% more than drivers on Uber and Lyft.

It’s not necessarily that Via drivers when they have a passenger
in the car are making more money than Uber drivers that have a
passenger in the car — I think it really is about utilization.
When you think about your experience on these other platforms,
their focus is on providing you a ride that’s within three to
four minutes away. That’s it. It’s a great experience, no
question, on the consumer side. But it means there have to be a
lot of empty vehicles driving around waiting for you to open the
app and book a ride.

Our wait times are a bit longer, six minutes on average, but that
all comes with trying to not have too many drivers on the road
and having the efficiency as high as possible.

Rapier: Will you be IPO-ing soon like Uber and
Lyft?

Ramot: It’s definitely a direction we’re
thinking about. We’re trying to build a company that has a
product that’s deployed in every city throughout the world. If
we’re able to achieve that, then that’s certainly a company
worthy of an IPO.

Rapier: What about scooters? They seem to be all
the rage now — are you planning to go beyond cars?

Ramot: Over the last 10 years, we’ve seen
technology come into the transportation space — with the
introduction of ride-hailing and shared rides — that has been
super interesting. Now, what we pioneered in New York is being
adopted by other ride-hailing companies around the world like
Uber Pool and even Didi Chuxing and Grab have shared services
now.

Technology can increasingly create new modes of transportation
that didn’t exist, and I think in the case of scooters — their
combination of hardware, software, and batteries — has enabled
this new mode of micro-mobility. Just like ride-sharing, this
will change the urban mobility landscape in a really positive
way. People have different needs, and having a diversity of modes
to choose from is very important. We’re pretty excited about the
space.

We’re definitely looking to add scooters to our repertoire,
specifically with what we’re offering to cities. A lot of our
partner cities have expressed interest.

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