Update: After Revel was initially shut down by New York’s Taxi and Limousine Commission (TLC), Revel prevailed and has now been approved to launch their Tesla Model Y taxi fleet.
Today, electric mobility company Revel announced it would be launching an all-electric, all-employee ridesharing service in New York City. And the best part is that all the vehicles will be brand new Tesla Model Y’s. Revel is best known for their shared fleets of blue electric mopeds currently operating nationwide.
The rideshare fleet will be owned by Revel and one thing of particular interest, especially for Uber and Lyft drivers is that Revel is hiring drivers as employees, not independent contractors. So in addition to driving your own Tesla, courtesy of Revel, drivers will also receive training and benefits like health care and paid time off.
Watch a video of this announcement below: Revel is Launching a New Rideshare Company in NYC (Employee Drivers and Tesla Model Y’s!)
On the passenger side, in addition to the cachet of riding in a Tesla, passengers will also have greater legroom, as Revel is removing the front passenger seat from every vehicle, and passengers will be able to control the temperature and music through an interactive touchscreen. Drivers will have a partition separating them from the passengers, and the Teslas will be cleaned daily by the Revel team.
Wondering if all of these amenities, like employees and Tesla vehicles, will make Revel pricing uncompetitive? Revel COO and co-founder Paul Suhey says “going electric should be an easy decision. The experience will feel like a free upgrade…” and notes even with upgraded features, pricing will be competitive with other rideshare companies.
Uber currently charges passengers in NYC a minimum fare of $7.19, with a per minute cost of $.67 and per mile rate of $1.48 for an UberX ride. For an Uber Black ride, the minimum fare is $14.15 with a per minute cost of $.84 and a per mile rate of $2.74.
Sound too good to be true? It may not be – since we all know that gas is rising quickly these days and EVs already save money in that regard (just one of the reasons why we recommend an app like Get Upside!).
But in addition to the major gas savings, electric vehicles don’t suffer from wear and tear as much as traditional, gas-powered cars, as they have fewer moving parts. While electric vehicles can be more expensive in the beginning, over the life of the vehicle, lower fuel costs and lower maintenance and repair costs often offset the purchase price and lead to long-term savings, according to Consumer Reports.
Read our full review of the best electric vehicles for Uber and Lyft drivers.
Revel’s service will officially launch in late May in Manhattan with a fleet of 50 Revel-blue Teslas available for pickups and dropoffs. The first 50 Teslas are only the beginning for Revel, as Revel plans to expand its fleet size and service area over the next year.
In addition to Revel’s all-electric rideshare service announcement, Revel also announced it would be accelerating the buildout of its fast-charging Superhub network in New York City. Revel first announced in February it would open the largest universal fast charging depot in North America, specifically Brooklyn, with chargers open to the public 24/7 and accessible to owners of any electric vehicle brand. The Superhub will go live in June.
Running a rideshare business is tough. As evidenced by the lack of profitability of Uber, Lyft and pretty much everyone else out there. Running a new rideshare business is even tougher – just listen to why this rideshare company failed.
Revel has a lot going for them here with a built in customer base and superior vehicles. And it doesn’t seem like the company is too interested in competing with Uber and Lyft. Instead, I think their why is more about accelerating the buildout of their fast-charging Superhub in NYC and pushing forward an EV future.
Why else would they hire employee drivers and offer more luxurious vehicles? Other companies like Alto have shown this model can work but their growth has been more slow and steady compared to the likes of Uber and Lyft. Not a bad thing, but definitely a different model.
I’m not sure how Revel will be able to purchase $50,000 Model Y’s (50*$50k = at least $2.5 million + increased insurance, Teslas are expensive to insure, etc) yet charge the same amount as competitors whose drivers are purchasing $20-30,000 used Toyota Camry’s. UberX pays the same whether you drive a Model Y or a Toyota Camry 🙂
So if Revel is going to lose money on the vehicle, this business will get expensive quickly and those costs will only scale linearly as the company expands and grows (EV charging and maintenance is a lot lower than ICE vehicles but I’m not sure it’s enough to offset the cost of a Model Y).
Just like Revel’s electric mopeds, a Revel spokesperson said the Teslas were financed by a third party. According to public sources, Revel’s last funding round was a $27.6 million Series A in October of 2019. A lot has happened since then (ahem, Covid) and I can’t imagine much of that money is left. So I’m guessing they raised another big round but haven’t announced it or they were able to get debt financing for the Model Y’s (sources tell me that some EV fleets are able to negotiate 80-100% debt financing for purchases like this, so that would basically mean no money down).
So while some questions remain about their business model, I think this is definitely a positive development for drivers and the rideshare ecosystem. Obviously, there are some drivers who want to be employees but more than anything, I think having competitors in the rideshare space is a good thing. It will force Uber and Lyft to improve their offerings and I think Revel has a real opportunity to market their driver jobs as the creme de la creme of rideshare driving. I would love to see a company out there value, respect and pay the top-rated and most loyal drivers because we sure as heck know that Uber and Lyft have not made this a priority.
What is Revel?
Revel is a Brooklyn-based transportation company specializing in charging infrastructure and shared electric vehicle fleets. Through the Revel app, users can rent electric mopeds, ebikes, call for an electric car, or find fast-charging stations compatible with any brand of EV.
Making Revel unique in the field of rideshare, Revel prides itself on its collaborative approach with local governments and rejection of the gig economy (i.e. independent contractors vs employees.) Revel was founded in 2018 and currently operates in four New York City boroughs, Washington DC, Miami, Florida and the California Bay Area.
Not in the NYC area but interested in electric vehicles? Check out our guide to the cheapest electric cars.
NYC drivers – what do you think? Would you be interested in driving for a rideshare company where you’re an employee, not an independent contractor?
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-Harry @ RSG with additional reporting from Melissa Berry