Rideshare market heats up

21/03/2018 - 15:41

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Five ridesharing operators have launched in WA during the past year, each bringing something different to the table.

Rideshare market heats up
Maher Elsherbini (left) and Rafik Ismail say Karru’s innovative services will give it an edge over its ridesharing competitors. Photo: Attila Csaszar

Uber may be touted as the driving force behind ridesharing on the global scale, but it is by no means the only player making moves in the space in Western Australia.

Australia-founded Shebah, Go Catch and Hi Oscar, as well as multinational Ola, have all recently entered the WA market.

Malaga-based operator Karru will be the latest to come on the scene when it rolls out the formal launch of its app-based service early next month.

The privately funded platform has already recruited 270 ‘captains’ (drivers), with Karru’s model taking 22 per cent of the fare per trip, just below Uber’s standard 25 per cent.

Co-founder Maher Elsherbini and marketing director Rafik Ismail said Karru’s main point of difference was its core brand, Karru Stuff, which linked users needing to shift bulky goods with utes, vans and trailer owners, via an app.

“It’s a competitive market but we’re not very worried,” Mr Ismail told Business News.

“We have unique products, which will give us an edge over our competitors.”

The platform will also provide standard ridesharing services branded under Karru Me, including specialist trips for women and children.

Mr Ismail said Karru Care was also in the works, with drivers requiring a certification in aged care to adequately assist elderly passengers.

“We’re planning on going nationwide in two to three months and hopefully, we’ll go international too,” he said.

“We’re WA owned and operated; I think that will also put us in a good position in the market.”

Choice

Shofer was among the first WA-based on-demand transport companies to surface when it launched two years ago.

Shofer director David Mills said he welcomed competition to the Australian market.

“We’ve had various operators come and go in our time of operation where we don’t think this trend will end any time soon,” Mr Mills told Business News.

“We see our future as a steady long-play strategy with security and innovation at the core of this ethos.”

 David Mills says Perth-based Shofer will soon roll out nationally.

Unlike the standard ridesharing model that requires drivers to supply a vehicle, the app-based Shofer owns and operates 90 cars. 

The fleet is fitted out with infrared HD cameras, an interlock breathalyser and a panic button, which are linked via sim cards to the business’s 24-7 control room. 

Mr Mills said Shofer’s national expansion plan would begin shortly, and would include product offerings he said were yet to be seen in this space.

Hi Oscar is another WA-founded app-driven ridesharing business.

It was launched in April 2017 and operates in Perth and the South West, including Busselton and Bunbury, with plans to launch in Esperance.

It has since expanded nationally into Geelong, and last month became the first ridesharing platform to formally operate in the Northern Territory.

Co-founder Daniel Broughton said the platform, which takes 15 per cent commission per trip, had 950 registered drivers Australia-wide, with about 700 based in WA.

“Our strategy is to get traction in the regional centres that flank the city, it’s the opposite of what everyone else does,” Mr Broughton told Business News.

Co-founders Jeremy Webb (left) and Daniel Broughton are taking Hi Oscar to other states.

Mr Broughton said Hi Oscar’s three co-founders all had a financial stake in the business.

“We’re just starting to break even,” he said.

“I think we’re one of the only ridesharing companies in Australia that doesn’t have $1 million investment.

“You’ve got to find your pocket where you fit, and whether you can make that sustainable, which is why we’ve got that regional focus.”

While other operators provide female driver options, Australia-based Shebah has tapped into the market niche as the country’s first service specifically dedicated to female drivers and passengers, as well as for unaccompanied minors. 

More than 25,000 trips have been completed since Shebah’s rollout in March 2017, with 850 drivers Australia-wide, while in Perth it has only 30 drivers after launching in December.

Like Hi Oscar, Shebah works off a 15 per cent commission per trip.

Founder Georgina McEncroe said her own experiences as a driver, and passengers’ need to feel safe, had been major factors behind the development of Shebah.

“About 4 per cent of Australia’s taxi drivers are women and around 10 per cent of Uber drivers are women,” Ms McEncroe told Business News.

“Just as many women have licences in this country but aren’t driving cars for a living … that’s weird considering women are forever seeking flexible work.

“They’re voting with their feet – they don’t feel like it’s a safe place to conduct business.

“So I thought we had to make a service where women could pick up other women because it had never been an option.”

Ms McEncroe initially turned to crowdfunding platform GoFundMe to fuel her idea.

She fell short of the $300,000 target but through that process met a private investor who backed her plan, launching the Shebah app the following year with several other Australian investors now on the books. 

Ms McEncroe said Shebah was achieving 35 per cent month-on-month growth, purely through word of mouth.

“The uptake in Perth has been impressive, it’s a good time to be here,” she said.

“The market is going to keep moving; at some stage there will be driverless cars, we’re looking at our tech space, we’ve got tricks up our sleeves.”

George McEncroe’s Shebah provides women-only transport services.

Shebah entered the New Zealand market earlier this month with plans for international expansion and more funding on the horizon.

Investment

GoCatch, an Australian booking and on-demand transport company servicing both the taxi and private car industry, announced plans for an initial public offering to raise up to $5 million on March 13.

Founded in 2011 the company has had about $12.5 million worth of capital investment to date.

While chief executive Andrew Campbell said there had been some viral adoption of GoCatch, it formally launched in Perth in January, providing 100 per cent driver commissions as an introductory offer and partnering with Perth-based news and reviews platform WAfoodies to drive awareness.

The app allows people to book transport from 30 minutes to 12 months in advance and has a strict ‘no price surge’ policy, unlike Uber, which allows for surge pricing depending on demand. 

“We want to stop history from repeating itself,” Mr Campbell told Business News.

“We started the business to bring competition to the market with the objective of ending the monopoly Cabcharge held over the taxi industry.

“Now we’re launching in Perth because the monopoly pattern is strongly familiar.

“It may be worse, with surge pricing gouging customers by 100 per cent or more, replacing the old cab surcharging price gouge of 10 per cent.

Commenting on industry trends, Mr Campbell expressed concern about the ability of global players to house their data overseas and take revenue and tax dollars offshore.

He also observed that Uber and Ola shared three key shareholders – Softbank, Tencent Holdings and Didi Chuxing (a Chinese ridesharing operator).

An Uber spokesperson told Business News they could not speculate on what impact the company’s ownership might have on its strategy while Ola international vice-president Chandra Nath said it made absolute sense for investors to bet on fast-growing global rideshare companies.

Founded in India, Ola is one of the world’s largest ridesharing platforms, with 125 million users.

Ola launched in Perth last month and is offering an introductory 7.5 per cent commission model. 

“Australia is an attractive market in that it values fair competition,” Mr Nath told Business News.

“We think both customers and drivers have had limited options to choose between.”

Mr Nath said the response and adoption of Ola in Perth had exceeded expectations, and the company was working in close collaboration with government to provide innovation for better transport infrastructure.

Uber, which has operated in Perth since 2014, doesn’t appear to be overly concerned about the emergence of new players.

“Competition is good for us, consumers and our driver partners,” an Uber spokesperson told Business News.

“It keeps us focused and helps ensure we innovate and deliver the best possible product.”

The multinational has about 9,000 drivers registered in Perth, despite a number of hurdles including new on-demand transport reforms.

“WA has proposed introducing Australia’s highest tax on travellers at 10 per cent of fares, which will commence later this year,” Uber said.

“The cost for a rideshare driver to obtain the necessary licences is also set to increase, which is already the highest in the country.”

The ban of ridesharing services at Optus Stadium in favour of registered taxis was another hit.

Business News reached out to Swan Taxis, with a spokesperson unable to provide answers to enquiries about the market ‘due to the competitive nature of the industry’.

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