Ridesharing Startup Juno Makes Big Moves to Take On Uber and Lyft
【Summary】At the moment, there are a handful of ridesharing startups working on expanding their footprint in order to avoid getting swallowed up by larger players in the field. Such companies include Via, Gett and Juno. Out of the three startups, Juno seems to have a very clear path to success.
The ridesharing sector is currently being dominated by Uber and Lyft. Together, the highly influential companies are catering to millions of busy commuters in over 65 countries worldwide. So how will other startups in the industry cope with the huge gap that the two brands have created in the past five years?
At the moment, there are a handful of ridesharing startups working on expanding their footprint in order to avoid getting swallowed up by larger players in the field. Such companies include Via, Gett and Juno. Out of the three startups, Juno seems to have a very clear path to success. Led by founder Talmon Marco, it already has the experience needed to overcome adversity in transitional markets (Marco sold Viber two years ago for a whopping $900 million).
Funding and Perks for Drivers
Juno's strategy heavily focuses on funding and lucrative driving compensation packages. Starting with the latter component, the startup is making its ridesharing program more appealing to drivers by offering 90 percent of each fare, as well as equity in the business. This plan is a blow to Uber's current rates of roughly 80 percent of the total fare price (before expenses). Juno's compensation strategy seems to be paying off. During its initial beta program, which launched in May, the company was facilitating up to 20,000 rides daily. Today, that figure has surpassed a million.
"We'll find it easier to attract drivers, which is going to reduce our driver acquisition costs, and drivers are going to have much better retention," explained Marco during an interview with Recode. "They will be motivated to attract riders, and then riders will have a better experience, which will motivate them to tell their friends."
When it comes to funding, the startup has taken an aggressive approach to securing capital. Earlier this year, Marco was aiming for a $30 million valuation with hopes to attract investors who are late in capitalizing on the booming ridesharing space. According to Fortune, the startup was able to raise $30 million, thanks to Japan's Rakuten and angel investors. Now the business is preparing for another massive funding round, estimated at $50 million. Although huge, this amount is a very small piece of the $28 billion pie that investors have been pumping into the ridesharing industry in the past 10 years.
Like Uber and Lyft, the startup's expansion plan includes self-driving technology. Macro mentioned that the company will make moves into the driverless car sector within five years. Considering that Uber is already facilitating closed pilot programs in Pittsburgh, Pennsylvania, and Lyft is leveraging cutting-edge smart car technology from General Motors (the company injected over $500 million into the business, boosting the startup's valuation to $5.5 billion), Juno will have a lot of catching up to do by the time it shifts its focus on autonomous vehicles.
"I think everybody in this industry is going toward self-driving," said Marco. "The only difference between Juno and everyone else is, because of our equity structure, drivers will become shareholders of the future enterprise. We will not drop the drivers."
Michael Cheng is a legal editor and technical writer with publications for Blackberry ISHN Magazine Houzz and Payment Week. He specializes in technology business and digesting hard data. Outside of work Michael likes to train for marathons spend time with his daughter and explore new places.
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