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The Texas ride-hailing startup Alto hopes to give tech giants like Uber and Lyft some stiff competition in Southern California with an employee model and a slew of safety measures — from masks to HEPA cabin air filters.
The company launched its app in Los Angeles on Tuesday at a time when the pandemic has hurt ride-hailing services' bottom lines and employee relations remain frayed by a spat over working conditions.
The move into L.A. marks Alto's first expansion outside of Texas, where it launched in 2016. The venture-backed company, which has so far raised $20.5 million, announced plans to begin operations in California last fall but the team rescheduled when coronavirus cases began to rise again.
After seeing its fleet expand from Dallas across the Lone Star state, Alto is hitting the road to launch its services on the West Coast.
The local ride-hailing startup announced making its first move outside of Texas, launching its transportation and delivery services in Los Angeles as it continues plans for nationwide expansion.
"Alto is thrilled to expand to Los Angeles as the first market outside our home state of Texas,” Will Coleman, co-founder and CEO at Alto, told NTX Inno via email. “Safe and consistent rideshare is more important than ever in these times, and we are proud to kick off 2021 with our continued growth into new cities.”
Dallas-based Alto is taking a chance on LA. The four-year-old rideshare and delivery company that prides itself on safety has launched service in Los Angeles, which is in the throes of a COVID-19 crisis.
According to a release, the company wants to provide "the safest, most consistent, and highest quality experience" to those needing rides around the city — including curbside pickup at LAX Airport. Dallas travelers flying to LAX can now schedule their pickup in advance.
...Dallas-based rideshare startup Alto is gearing up to enter California by late October, beginning with Los Angeles. The startup, which launched in January 2019, classifies its drivers as employees, which Uber and Lyft have long fought against because they would need to offer them certain benefits.
Alto has focused on offering an upscale ride service focused on hospitality and safety. As employees, its drivers are fingerprinted and drive the company-owned vehicles, which are monitored and cleaned regularly. As another differentiating factor, Alto offers healthcare benefits and pays hourly wages to drivers.
Alto is betting that if a safer, more expensive ride-hailing service can turn a profit in Dallas, it can do it just about anywhere.
When Will Coleman was deciding where he would stage his bid to compete with Uber and Lyft, he never seriously considered Silicon Valley. Instead, he started searching for office space in Dallas. For starters, it’s Coleman’s hometown. But there was another reason why he picked a city that, despite its burgeoning tech scene, has never produced the sort of sexy start-up “unicorn” he aspired to create. “People from Dallas don’t love to hear this,” Coleman says, “but Dallas is very average.”
Unlike Uber and Lyft, the company owns a fleet of SUVs and hires its drivers.
Alto CEO Will Coleman is used to getting lots of questions when he tells people he leads a ride-hailing company. When he founded the startup a year ago, Uber and Lyft were already household names. Now they’re publicly traded giants.
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.”
If you want to get excited about what’s ahead for Dallas-Fort Worth, all you have to do is read about the companies and leaders featured here. They are disrupting their industries and solidifying the region’s reputation as a hub for innovation. It’s especially felt in the tech arena, where North Texas continues to shine, ranking among the nation’s best markets for tech talent. But innovation permeates companies of all sizes in every industry, from healthcare and education to energy and commercial real estate.
It’s been a year since a couple of Dallasites left their respective jobs and in two rounds of funding raised $14.5 million in an attempt to disrupt the ridesharing industry.
Friends Will Coleman and Alex Halbardier launched Alto in pockets of Dallas in October 2018 with 10 cars and the hope to appeal to a market share that was concerned with basic standards like safety and consistency. Priced slightly higher than competitors Uber and Lyft, and now with 60 cars on the road and 6,000 subscribed members, the company reports that for the first time, they broke even.
Talent is the No. 1 thing on the minds of North Texas leaders. Our special edition magazine dives into how companies, culture, and community are making Dallas-Fort Worth a force for the future.
Check out the companies and leaders making Dallas-Fort Worth a hub for innovation.
Dallas Innovates and D CEO are proud to announce the finalists for The Innovation Awards 2020. The inaugural program honors companies and leaders—CEOs, CIOs, CTOs, entrepreneurs, and more—driving innovation in North Texas.