RideCo, a Canadian company that offers cities on-demand transit technology, closed a $15.8 million (CAD$20 million) Series A round. The new capital will be used for the further development of the product, with significant growth of the engineering, customer service, sales and marketing teams, Prem Gururajan, co-founder and CEO of RideCo.
The company, whose main competitor is Via, has a software-as-a-service business model. Like Via – which also offers transportation planning technology after the Remix acquisition – RideCo provides carriers and fleet operators with the underlying software and app, so they can in turn provide on-demand transportation options to cities, RideCo’s largest customer. RideCo also offers the service to companies looking for a dynamic way to transport employees.
The software creates dynamic routes for buses or other types of vehicles and directs them to the next pick-up and drop-off zones depending on demand. Cities like San Antonio, Los Angeles and, most recently, Las Vegas, have used these capabilities to address access to first- and last-mile transportation, a common problem in most cities that are still primarily managed by fixed-line transit systems. routes.
“Take San Antonio, for example,” Gururajan told TechCrunch. “They have certain parts of the city that are well served by public transport because they are high density, while there are many other parts of the city that are low density, and they have problems with the first and last kilometres. Transit with a fixed route just doesn’t work there.”
Dynamic shuttles and buses that actually go to the places where people order rides and where they want to be dropped off can solve those problems and create more mobility in a city.
“So what you have now is a city where our service allows them to use dynamic transit in the medium and low density areas that open onto the high frequency corridors where they have light rail or express bus lanes and where they have the demand to fill the buses.” .”
Passengers can view their vehicle on the app and book rides in advance, real-time or even recurring, such as every day of the work week at 9:00 AM.
RideCo’s Series A, which was led by Eclipse Ventures, represents the first time the company has raised institutional investment in seven years since its founding. Gururajan attributes this to a number of factors, the first of which is that RideCo spent the first few years building out the core technology and testing it with a number of beta customers to solve certain use cases.
When RideCo was ready to bring its product to market, it realized it wasn’t quite a fit for the product market yet.
“When we went to the market, we found that there were some customers who were interested in this, but as a whole the market was not ready for it,” he said. “They were still apprehensive about all things app-enabled transportation, but that all started to change around the end of 2018. We had a few signups for major cities, like San Antonio, that knocked it out of the park in terms of save money for the office and improve the mobility of residents.”
Since then, RideCo has made its way to cities across the US and Canada, from major cities like Calgary and Houston to small towns like Cobourg, Ontario. The pandemic also accelerated RideCo’s growth as carriers began to devise new ways to meet changing passenger demand patterns and the desire for modernized and responsive networks, Gururajan said.
In the past year, RideCo’s customer base has grown 2x, although the company did not say what the basis of that growth was.
RideCo is expanding its on-demand transit offerings at a time when its main competitor, Via, is diversifying its offerings and identifying itself more as a general purpose transit technology provider than an on-demand transit provider. The two companies, which both filed patent infringement lawsuits against each other last year over similarities between their technology, were founded in the same year, but Via has captured much more market share than its Canadian counterpart.
RideCo may still be able to capture some market share in this burgeoning industry. Nearly 16% of transit agencies in the US and Canada already offer on-demand transit, and that number is expected to continue to grow with other forms of shared mobility. The company will need to maintain the current momentum.
Correction: RideCo’s funding round was led by Eclipse Ventures; we incorrectly listed the investor as Enterprise Ventures. An earlier version of this article also stated that Via sometimes makes vehicles available to customers.