The Uber-led ridesharing market is now competitive and vicious. But a 20-year-old Australian entrepreneur reckons he’s found a golden formula to make a go of it.
Hop, which soft-launched operations this month in Sydney, is offering drivers 100% of the fare and no requirement to even own a vehicle. For passengers, the startup is claiming its fares are 40% lower than taxis and customers don’t even need to download the app to use the service.
Founder Zeryab Cheema told Business Insider that he hopes the model will quickly scale up to 500 active drivers and 20,000 customers by the end of January.
Hop will prove to be attractive for passengers, Cheema said, because there is no surge pricing and it offers three tiers of cars – Plus, Pro and Lux.
“Plus competes against the cheaper services like UberX,” he said. “Hop Pro competes with taxis and Hop Lux competes with hire cars.”
An intriguing feature is that any potential passenger can book a car without even needing to download the Hop app. The startup has deployed its own employees to the most popular pickup locations around Sydney, all armed with portable Square card payment readers and ready to book a car on behalf of anyone who wants one.
“We call it Street Booking and it is a permanent feature,” Cheema said, adding that the expense of sending out his own staff to hit the streets will no longer be a factor once car hailing restrictions are reformed by the state government.
The “100% of fare to driver” promise can be achieved because of the company’s partnership with Hertz, according to Cheema. All drivers must rent a car from Hertz, and Hop earns its revenue from getting a cut from the rental fee.
The Hertz cars can be rented at hourly, daily or monthly rates and include insurance and maintenance. Some deals also include petrol.
This compares to Uber, which charges 20% commission out of the fare, and local rival GoCatch, which charges 15% — with drivers required to provide their own car and stump up running costs for both of those apps.
Business Insider Emails & Alerts
Site highlights each day to your inbox.