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What it takes to take on Uber

Techcrunch has recently reported that another rideshare app is poised to take on Uber and Lyft, called Juno. Juno is currently in the middle of a 30 million dollar funding round. Compared to the 9 billion dollars Uber has raised, that may not seem like much. However it is interesting to see that investors are keen on investing in this new rideshare app, even though the market is dominated by the the existing behemoth.

There are a couple of factors which make Juno seem quite promising. For one, the founding team is very experienced. The four cofounders are the same team which built up the messaging App Viber, which exited to Rakuten for $900mn. These guys have massive experience in launching a company worldwide.

According to Talmon Marco, Juno’s CEO, the single most important difference to Uber will be the relationship between the company and it’s drivers. Juno wishes a harmonial relationship. Instead of the 20% cut Uber is charging its drivers, Juno will only be charging 10%. In return, Juno is able to terminate the contractual relationship between them and their drivers if they see reason to do so.

This approach has gotten them massive positive responses from active Uber drivers. In fact, rumours are coursing that Juno has received so many requests from drivers that they now have a waitlist for drivers that is six months long. It sounds like Juno can be choosy about who they will have as a driver for their company.

Having great Juno drivers will attract customers and benefit the brand. It’s very likely that the company will bet on some sort of virality and word-of-mouth once it launches. The fact that drivers already seem to be doing so is a great sign.

If customers will have to pay a premium for the driver quality remains to be seen. There are other startups similar to Uber which have made a name for themselves in niche markets. Blacklane, a Berlin-based rideshare service, has specialised itself in providing professional driver service in limousines, and has done so quite successfully. However, until Juno launches, it is not yet clear if a niche audience will be targeted, or if the audience will be similar to Uber’s.

If the target audience does not differ, it will be very interesting to see how Juno decides to price its services. Customers in the rideshare business are very price-sensitive. While comfort and quality of the service are still important, price is by far the driving factor. Juno is already lowballing Uber on driver fees. If they manage to lowball Uber on overall costs for the customer too, then things will get interesting.

 

 

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