As Uber continues to raise ever more funding to drive its on-demand transportation app into more categories and countries, one of its smaller, regional cab-hailing rivals is quietly expanding into its own adjacent services: Gett, a startup with service in 50 cities globally whose app can be used to hail black cabs in London, is today adding a courier service, starting in the UK capital. For a flat fee of ¬£6 ($8.50), you can have a package of up to 5 kilograms picked up anywhere in central London in 20 minutes, and delivered within an hour by scooter.
For those of you who don‚Äôt live in London, a little context: a ¬£6 flat-fee courier service for central London is pretty damn cheap ‚Äî a discount of some 30% on typical courier services. The courier service will sit alongside Gett‚Äôs other flat-rate promise ‚Äî ¬£10 for black cab rides, also across the middle of town.
Gett Courier is launching at an interesting time for the on-demand transportation market in the UK and Europe. Sources tell us that Chinese transport startup Didi Kuaidi and India‚Äôs Ola have been among those eyeing up transportation services in this part of the world as potential investments, or at least as potential partners in a global alliance announced last December in part to better compete with Uber both in seamless global services as well as technology.
Notably, when that partnership ‚Äî between Didi, Ola, Grab and Lyft ‚Äî was announced, there was no European partner in the mix. Companies that have been mentioned to us as possible targets include Hailo and Gett.
In an interview with TechCrunch, Gett‚Äôs European CEO Remo Gerber would not comment on any future partnerships or investments with this group unless you count a nervous laugh as a comment. But Gett is raising, with funding ‚Äúin a critical phase right now,‚Äù he noted. The company, co-founded by Shahar Weiser and Roi Moore and based in New York, is currently backed by $220 million, with investors coming with a strong Russian accent. They include Len Blavatnik‚Äôs Access Industries, Inventure Partners, Kreos Capital, MCI, and Vostok Investments.
But he did give us some insight into just what Gett is getting up to with this new service.
It turns out that the courier service is more connected than you think: the scooters that will be doing the delivering for Gett are actually trainee black cab drivers, who have to spend a number of months learning London‚Äôs complicated tangle of streets, and how to get from one to the other backwards and forwards ‚Äî a body of study referred to as ‚ÄúThe¬†Knowledge.‚Äù Trainee black cab drivers do this through programs, using scooters to get around the city.¬†While they are not paid to ride around for their Knowledge training, Gett smartly realised they they could start working with them early-doors, by paying them to pick up and drop off parcels.
‚ÄúIts our own network of scooter boys, people who are training to be black cab drivers,‚Äù Gerber said. ‚ÄúThis way they can continue to train for their knowledge and make some money in the meantime.‚Äù
The other reason why this is a smart move has to do with how Gett has been trying to grow its business in London. While Uber has wedged its way into many smartphone-using consumers‚Äô transportation options by offering an easy to use, and often very cheap hired transport option, Gett has been quietly building up a business mainly targeting business users.
Building out a courier service will give Gett one more sticky service to sell to their target market of corporate companies.
Gerber says that today Gett counts 3,000 corporate clients, including 3 out of the top 4 accountancy firms, several investment banks and ‚Äúhalf of the Fortune 500.‚Äù These business users now make up about 40% of the company‚Äôs rides in London, New York and Moscow, he says.
Of course, there are many potential hitches in Gett‚Äôs bigger business.
For starters, Gett is not the only one targeting corporate users. Uber for Business claimed 50,000 enrolled companies as of September 2015. In Gett‚Äôs defense, Gerber says that many top clients rate due diligence is an important factor.
‚ÄúWe don‚Äôt have a single lawsuit against us,‚Äù Gerber says. ‚ÄúThis is important for corporate clients.‚Äù Given the many regulatory spats that have followed Uber across various markets, some clients are searching for a ‚Äúsafe‚Äù option that is 100% reliable. This is essentially what a hailing service working just with the black cab fleet in London is able to provide, he adds.
Another potential issue for Gett is the business model it‚Äôs applying here. Given that the scooters are driving around regardless of whether they are delivering packages, it‚Äôs a clever move by Gett that should mean a quick margin for them on the service ‚Äî although it seems like only a matter of time before the trainee cabbies decide to raise their rates in order to be available for courier jobs.
‚ÄúThere is a bit of margin today,‚Äù Gerber says. ‚ÄúIt depends on the utilization of the driver.‚Äù
There is also the spectre of other competition. In addition to existing standalone courier services, there are those from other transportation companies. Addison Lee ‚Äî a big competitor in targeting the business market in London ‚Äî provides a courier service. Uber‚Äôs UberRush is live in San Francisco, Chicago and New York, but seems more focused on the¬†delivery of goods, linked up with e-commerce services where you initially buy them, rather than messengering a package from your office to a destination.
For addresses outside Zone 1, Gett says a fixed price gets confirmed in the app when you enter the destination at the time of booking. Gett¬†Courier will be available from 9am to 9pm each day.