January 19, 2020
Uber and Lyft competitors ready to pounce if service is suspended in California
At least two start-ups that spoke with CNBC are accelerating their plans to enter California in light of Uber and Lyft’s potential retreat.
Alto, a Texas-based rideshare service, had planned to expand to California by early 2021. CEO Will Coleman said Alto now hopes to be there no later than early November.
Alto has had an employee-based driver model since its inception, lowering the regulatory hurdles it will have to jump to get set up in California. Coleman said the model allows Alto to better control the rider experience, which is especially important for cleaning procedures related to Covid-19.
“The reality is that having W-2 workers is actually significantly more innovative than [having] contractors in the transportation space,” Coleman said, noting that most taxi drivers have traditionally been independent. “Fundamentally what we can control is actually the most important part of our business, which is supply. The challenge that Uber and Lyft have with independent contractors is that they have zero control over their supply.”