Achi news desk-
Harrison Amit leads a small startup with a big idea.
“The vision for the company is to help over 10 million drivers,” said the 28-year-old CEO of Hovr (pronounced Hover).
The Toronto-based ride-hailing company is launching today, and will serve the city and surrounding suburbs.
Amit’s goal is to make the company a national brand within a year and go far beyond that.
The question is whether this young entrepreneur can compete with the global giant Uber, which has 15 years ahead and has 150 million monthly active users in Q4 2023 (including Uber Eats customers), or Lyft, which was founded 12 years ago and had 22 million active monthly riders in Q4.
Hovr has yet to provide a single ride, but Amit believes his company’s approach could shake up the ride-hailing industry because of how it will pay drivers.
“Our tagline at Hovr is 100 percent, the price is 100 percent fair. And what that means is that the drivers take home 100 percent of the price of every ride they receive. “
It is a play on words, but also a strategic play, which sets Hovr apart from the giants it is up against.
What does 100% of the price mean
Amit says Hovr will appeal to drivers because instead of taking a percentage of the total fare on each trip to turn a profit like Uber and Lyft do, Hovr will charge a monthly membership fee of $20 to work for the service.
That price is an introductory rate that Amit says will rise as the business grows, but a fixed cost means drivers aren’t paying more for working more.
That’s how Hovr lets drivers keep “100 percent of the price.”
Hovr says it will make the costs of each ride transparent, giving riders a bill that shows the price or driver’s charge (the base rate, kilometers and time), and includes what the passenger is charged for insurance, city fees, transaction fee plus a $1 “stage fee” from the company.
Amit says the 100 percent fair slogan helped sign up 5,000 drivers and 25,000 potential customers, through word of mouth, social media and a few billboards in downtown Toronto.
Milton Brady, a former cabbie who has been with Uber for four years, said he couldn’t wait to sign up for Hovr.
“Hovr is a knight in shining armor,” he said.
Brady says the industry needs more competition to make things better for drivers, and that Hovr’s wage model would give drivers “an opportunity to actually build some kind of economic stability in their lives.”
Ripe to ride for disruption?
In Amit’s view, the ride-hailing business is about to be reorganized, the way Uber disrupted the taxi business when it arrived.
“We’re entering a market that’s ripe for disruption,” he said, “It’s full of discontent, on both sides from the riders and the drivers.”
Complaints about surge prices a servicea tax investigation a unionization efforts are issues that the industry has faced.
“As an industry, trekking needs to change,” said Kam Phung, an assistant professor with the Beedie School of Business at Simon Fraser University in Vancouver.
“We know it’s fraught with problems and challenges, specifically in terms of workers’ rights.”
On Valentine’s Day this year, a drivers’ protest and strike has been staged in several cities around the world as some gig workers log off their apps, refusing work to highlight their pay and working conditions.
In Toronto, a a report Ridefair Toronto and the Rideshare Drivers Association of Ontario (RDAO) estimated that many drivers make less than minimum wage after expenses.
More protests were held this week in several cities to coincide with International Workers’ Day on May 1, with Toronto drivers protesting at the city’s Union Station and Pearson Airport.
Some local drivers with companies like Uber, Lyft and DoorDash are on strike Wednesday to demand higher wages. In a statement, Uber said the “overwhelming majority of drivers are satisfied,” but drivers told CBS Toronto that many of them are being paid less than $10 an hour.
What Uber and Lyft say about the business and fair pay
Uber and Lyft see the ride-hailing industry booming and report positive trends in their quarterly reports.
Both have also said they feel competition is good for consumers and drivers.
Uber Canada told CBC News in a statement that “the vast majority of drivers are satisfied,” and in the Toronto area, for example, “make $33.35 during engagement time per hour before tips.”
The company also said it believes “drivers should earn a guaranteed minimum wage,” and will comply with new laws in Ontario and BC that enforce such a standard.
In an interview with CBC News, Lyft CEO David Risher said roughly, for every dollar you as a rider pay, Lyft earns about nine cents.
He said the remaining 91 cents is split between insurance and other fees, but most of it goes to the driver.
“It’s in our best interest that drivers are paid more, because it means more people are on the platform,” he said.
A global brand?
Amit says Hovr is “positioning itself for the global stage,” but driver interest will be the key to the company’s growth.
He hopes drivers who are excited about Hovr and work for Lyft or Uber will convince their passengers to switch over as well.
“I don’t believe there is any level of brand loyalty, it’s more of a forced relationship with these companies, because of a lack of options.”
Phung believes that Hovr could grow quickly because some users demand “gig economy models that actually allow workers to get a fair wage, and contribute to creating a just and fair society.”
But, he added, the reality of competing against large international companies means the company could be in for a bumpy ride.
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