The new, tech-based, gig-worker economy presents all kinds of opportunities— opportunities that will inevitably be taken advantage of by smart entrepreneurs. One such opportunity is the demand for group transportation. We’re talking about the kind of groups too big for services like Uber XL or Lyft XL and factoring in the massive under-utilization of large-capacity for-hire vehicles like airport shuttles, party buses and 13-seat Sprinter vans. That’s what Los Angeles-based Amir Ghorbani, Ruben Schultz and Pete Evenson saw, anyway. What they created is Swoop.
What is Swoop?
Swoop is a technology marketplace that matches passengers to the best-fit group transportation provider. Passengers can log in to the website, enter the date, time, destination and group size and then select from hundreds of different transportation options. From the swankily-appointed “Ice Cube” 11-passenger limo to the aptly-named 56-passenger “Lisa Leslie.” Like Uber or Lyft, passengers can book and pay online on Swoop’s website, and Swoop also provides dedicated phone support through a concierge service.
Swoop matches customers and rides by partnering with vetted group transportation providers across the country. These operators have to pass numerous background checks to be allowed on the platform.
The independent limo and bus operators get thorough back-end support via the app, which gives them information on what rides are available, rates, how much they’ve made on past rides, passenger reviews, which vehicles were most profitable, etc. “We want to be a one-stop shop,” co-founder Ruben Schultz told host Greg Lindsay on the Co-Motion podcast “for anything logistics or group transportation.” When a ride is booked, the company operator is informed of all the details: passengers, price, addresses, etc., as is the driver.
What Swoop Does, and Why it’s Better
Calling Swoop “Uber for Group Transportation” may sound like elevator-pitch shorthand, but it’s the best way to describe it. I haven’t personally used Swoop, but the Yelp reviews are glowing. Over and over, you read stuff like “we could not have asked for it to have gone better,” or “my absolute favorite way to travel in LA.”
Swoop obviously tries really hard – it’s a small startup that wants to succeed, after all. But Swoop is also taking advantage of a virgin field. Of all the thousands of group-transportation providers in the US, not one company owns more than one percent of the entire market, and few of them offer any kind of online booking; 93 percent of passengers have to book group transport by phone, like cavemen. That’s a giant opportunity for an Uber-like app to come in and really clean up. I’m kind of stunned it took this long considering it’s been a full decade since Uber first offered limo rides on its app.
On the flip side, there’s massive under-utilization of these multi-passenger vehicles. According to Swoop, these vehicles are only utilized 4.9 percent of the time, which is a big surprise, and again, a big opportunity. This under-utilization is not just an opportunity for Swoop, but for the limo companies too; one use study, of Lightning Limos, shows the small company, participating with Swoop, increased its vehicle utilization 33 percent, leading to a 47 percent increase to the bottom line.
“Swoop saved my business,” is the quote from Lightning Limos that Swoop uses in its marketing material. With success stories like this, it’s easy to see how helping small businesses increase business without increasing costs could revolutionize the group-transport industry.
How Swoop’s Approach is Different
Swoop is different because it’s something that hasn’t really existed in this market segment. Sure, there’s Uber, Bird, Lime, Wheels, Lyft and taxis for individuals and small groups, but what if you have a wedding party, or a corporate event, or need to get a high-school marching band to the airport? Swoop promises to make it almost as easy to book rides as Uber or Lyft, although making it that convenient could be challenging: booking a 60-foot-long party bus requires a bit more planning than a 4-passenger Prius.
Head to SwoopApp.com (there was an app, but it’s being rebuilt right now and in beta), plug in the details of your trip – time, date, destination, number of passengers – and the service gives you options for vehicle type and provider, with a promise to find you the lowest price within 24 hours. Yelp tells us that the average response time is just 40 minutes.
Compare Swoop’s approach to how you book a multi-passenger (more than 6) ride now: go online, find phone numbers, call dispatchers, leave messages, wait for responses. I’ve never booked a limo, but if it’s like finding a plumber it could take days. Weeks.
Swoop also differentiates itself by providing passenger “experiences.” Swoop has teamed up with a few different businesses, like Malibu Wine Safaris and Rosenthal winery, to provide customized entertainment packages for large groups of guests. “The ride to the experience destination is part of the experience,” Schultz told Lindsay, revealing a way Swoop can expand the group ride market, which is currently at about 400 million riders a year.
Where Can You Swoop?
Right now, Swoop is based in Los Angeles and is working on expanding into major cities in the US. However, Los Angeles is a huge region, encompassing thousands of square miles and 15-20 million people, and a perfect challenge to test this kind of venture.
Full disclosure: Swoop came to RSG’s attention because Harry Campbell is an advisor to Swoop as it raises capital for expansion into other markets. According to its pitch deck (I feel so hip writing “pitch deck”), Swoop wants to increase in size 26 times, moving into 10 new regions by 2020: first the San Francisco Bay Area and Chicago, then New York, Dallas and Miami, and finally Las Vegas, Austin, Denver and Seattle. With no big competitors (at least not right now) it looks like Swoop is well-positioned to take advantage of what could be a very big market. Swoop tells us that by June 2019 it should be active in 10 cities.
Swoop is a pretty impressive venture, if you ask me. It’s taking advantage of what now looks like a very obvious opportunity in the transportation industry that could also help a lot of independent businesses increase profitability. My only concern is that like Uber or Lyft, Swoop, when faced with competition, may squeeze these same small business people, requiring them to lower their rates to increase market share and ride volume. But the current model is to let the providers set pricing, so that concern may not materialize unless Swoop makes some fundamental changes to its operating model.
We’ll keep an eye on Swoop to see what happens. Watch this space!
Readers, what questions do you have about Swoop? Would you consider driving for Swoop?
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-Gabe @ RSG
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