Aarjav Trivedi, CEO, and founder, Ridecell, recently joined Grayson Brulte on The Road To Autonomy Podcast to discuss how digitalization and automation of fleets lead to increased revenue and profitability for logistics and mobility companies.
In the first of this three-part series, Aarjav takes us through the journey of Ridecell–from the founding days to becoming a leading fleet IoT company.
GB: When you founded Summon (Ridecell 1.0) in Atlanta, what were some of your biggest accomplishments and learnings during those years?
AT: I grew up in Bombay, and I love driving there. However, I failed my driving test in America for three years. So, I had to wake up in the morning and wait for a bus for an average of an hour to get to work. I’d be at work from 11 am to 11 pm, and then I’d have to wait again for the bus because, at best, it ran once an hour. I did this for two and a half years. It was that experience that caused me to consider that there had to be a better way.
When we started the business, the iPhone had just become a development platform. At the time, I couldn’t afford it, but I knew it existed. So, I was waiting every day for the bus, and hundreds of cars were passing by me. Then I connected the dots. Fundamentally, two things could lead them to give me a ride. The first thing is trust. We had just built the first internet reputation system, so I knew how to solve the trust problem. The second was payment! And I knew I could solve that on an iPhone.
This was 2008; Uber didn’t even exist yet. And in most parts of America, it wasn’t even possible to get real-time information on your bus using a smartphone. It seemed like a problem could be solved in a well-defined way. And it would make such a significant impact on everybody’s lives, including my own.
GB: Why did you move to San Francisco to launch Summon (Ridecell 1.0)?
AT: Atlanta was already a great community for technology, but most investors at that time thought transportation or mobility was a no-growth industry. We had become profitable. We worked with Coca-Cola as one of the early pilot customers, then we worked with organizations ranging from CDC to Marta. And we convinced them to use our technology. We wanted them to adopt real-time transportation. Even though it was hard, the lessons we learned along the way allowed us to create many firsts later in the industry.
I then went to a transportation conference in San Francisco, where people saw the possibilities in technology. So, I decided to move.
People don’t usually know that Summon was the first on-demand taxi company in California to receive a permit and operate legally. It was the first service to combine taxi, TNC, company drivers, and limo operators into one app. It was also the first ridesharing service to partner with a carsharing service, BMW Drive Now.
GB: What drove that incredible innovation so early in your career?
AT: We acknowledged from day one that the regulator had a legitimate job to do which was in the interest of the public. That respect, the interactions, and the productive aspect of the conversations seemed to help us. At that time, the other folks on the table were not coming to the table from a regulator’s perspective in a constructive way. So even though the city, at the time, did not want to give us a license, the state did. And that’s how we became the first legal ridesharing company in the world – in terms of combining taxis, community drivers, or ridesharing.
We’ve always believed there was this artificial demarcation of the time, of what is legal and what is not. We felt that if everybody who had passed background checks as a good driver and wanted to give other people rides could not, then we would never have liquidity. We would never have the convenience that we do now. And that’s where that came from.
Also, we did not see how the unit economics of ridesharing could work without improving vehicle utilization. This remains a problem to this day; you can’t pay your drivers less than a living wage. So, from day one, we wanted to build a community of drivers who made a decent wage, and we did not want to lower pricing by paying them less than a living wage.
So how do you reduce their costs? To us, it was obvious! There are fleets of vehicles. At that time, BMW had 100 electric vehicles in San Francisco; the range was 90 miles. But we figured out a way to have these vehicles utilized by our drivers when they were otherwise underutilized. And that created an alignment of where the vehicles got high utilization, and BMW got more revenue. And the drivers, including those who could not afford to own a car in San Francisco, park it, or insure it, could now drive and get a job.
The moment we did that, we saw that this was the future, a future where you did not use one vehicle for just one thing. The vehicle was available for different use cases like deliveries in the early morning, people driving themselves to work with carsharing in the morning, being driven home right after the end of the day, or being driven to a bar or back from the bar. We saw that this was an around-the-clock utilization of vehicles. This is how transportation needed to function for it to be sustainable in every way.
GB: So, you’re creating jobs, you’re offering customer choice, and solving the fleet optimization problem. Is this the birth of Ridecell 2.0?
AT: Absolutely, this is where Ridecell got its birth in November 2014. We saw this big gap where carsharing companies and the logistics companies like Uber and Waymo would need software that helped them drive higher utilization on those vehicles. As it turned out, we had already built the first version of that for ourselves and our partners like BMW.
You know, some of the early folks at BMW, like Pete Dempster, who’s now at Amazon, and Richard Steinberg, who leads Electrify America and the unit there, convinced us that it was worthwhile for us to pursue this larger problem. To build technology that the largest fleets would use, and they even became our first customers.
So, we had two choices: to continue as we were, as the fourth largest ridesharing company–which was very lucrative for us but not as satisfying. Or to go down the long road to align with our mission of helping the world move better. We decided to shut down the consumer ridesharing company and build a new platform, using all the lessons we had learned. This platform would then go on to be used by folks like BMW, Google, and Penske.
GB: You built a great relationship with BMW. They led your Series A round with $11.7 Mn. How did that relationship evolve?
AT: They believed in the ridesharing model. BMW, Khosla Ventures, and Initialized capital invested in us early on. BMW was also one of the partners whose vehicles we were using for the ridesharing business. So, the relationship started with their seed investment.
We then discovered the problems they had in managing their carsharing fleet and getting more utilization. They had a desire to use their vehicles for more reasons, and they saw that we could help them with the technology and initial tools. Our platform was what they needed. It was the next-generation platform, and they wanted to be our first customer. They took a chance on us, and we provided them with an excellent platform; they became our anchor customer. They saw the potential for a platform like this — that it helps increase the utilization of vehicles with data with automation. It was capable of transforming not only the BMW fleet but everything from ridesharing fleets to the autonomous fleets of the future. They saw the potential in us, and that’s how that investment happened.”
GB: You’re the CEO of a global company operating in Europe, India, and the US. You’ve got talent all over the world. As a founder and CEO, how are you managing this team and your clients, investors, and employees’ expectations?
AT: Frankly, I’ve had to learn it! I’ve certainly made a lot of mistakes along the way. One of the first lessons I learned was that all people, particularly leaders, have a mental model of themselves as fair people. But there is this natural bias, particularly in leaders, of implicitly over-valuing your ideas.
One of the things that I learned early on is that when you have to manage 2,700 drivers and a fleet of electric vehicles, and when you’re competing with Uber, your team of 13 people are superheroes. If not, you would not be doing any of the things you’re doing. It becomes apparent that none of your company is ascribable in any meaningful way to you. It is the team.
That lesson is the primary thing that helps me because I think we live in a world that is increasingly united digitally. This is particularly true for transportation; each region has its own needs. There’s no way that, as a leader, you can make the optimal decisions for your business globally; you have to empower your team. You have to be willing to constantly remind yourself that you hired them because they are better at their job than you.
GB: As a CEO, is one of the keys to success in understanding culture? So if you’re meeting with an elected government official or client, understanding that culture’s unique customs is important, right?
AT: I think that’s one of the advantages I have as an immigrant. Going from one culture to a completely different culture makes you more attuned to the differences, particularly the strengths. I think there’s a different culture on the East Coast versus the West Coast. Also, growing up in India, we’d say India is more like 26 different countries. And there are hundreds of languages. So, the fact that India is so diverse and cosmopolitan helped me.
These are the cultural norms, which may be well understood. Then, there’s this entire emerging culture and a set of norms around everything, such as social media. I’m somebody who has cameras all over my house, and I buy every gadget I can. Yet, in several countries in Europe, traveling with a dash cam is illegal for a fleet to use. You have to understand the history and why they work in the way they do.
Being attuned to and enabling your product to serve those different cultures and creating decentralized teams in each region–even if they are a small team–can influence the platform and the product in a way that meets their needs. I think that is crucial in our world today.
In the second part of this three-part series, Aarjav talks about the impact of COVID-19 on the transportation industry and how the Ridecell platform helps fleet industries adapt to survive in these uncertain times.
To learn more about how Ridecell can help automate your fleet management, contact us today.
Author: Diptii Tiiku, Senior Director of Marketing, Ridecell