In the early days of the pandemic's stay-at-home orders, many of the Metroplex's arterial roads were left nearly empty. And with lockdown orders in place across the globe, the travel industry was hit hard, including local ridehailing startup Alto.
“Monday the 15th was really like D-Day for us. A lot of offices started closing. It’s kind of funny to remember that happened even before the stay-at-home orders were officially announced,” CEO and co-founder Will Coleman told NTX Inno.
Now, as the state enters its reopening, more and more businesses are opening their doors and more people are filling the backseats of Alto’s fleet. And Coleman feels that despite the struggles it has faced, the startup is better positioned to expand its business.
“Our underlying ethos has always been about safety and cleanliness and quality of the experience and of the vehicle,” Coleman said. “The things we’ve held important and held up forever around safety… those are more important today than they’ve ever been before and they’re only increasing in importance. This is not a problem that’s going away, so they are going to be more important tomorrow than they are today, and we are standing out in front on setting the standard for what passengers and drivers come to expect from operators in this world.”
In the middle of March, when fears about the pandemics spread were reaching their height, Coleman said within only about a week ridership dropped 90%. With only a few rides for health care and essential workers, Alto had to cut hours for its full-time drivers, which are all W-2 employees, causing its part-time drivers to lose many of their hours. Alto has about 150 drivers overall, about 80 of which are full-time. The company also sent much of its corporate team home.
To take care of its drivers who were still on the road, Alto stepped up its cleaning standards (which it is offering to do for its app members for free), as well as increasing sick pay and leave time. The company also made masks and gloves a requirement, while doing temperature checks and installing HEPA air purifiers in its fleet. Drivers were also allowed to use their own devices to clock in and any interaction with an on-site supervisor took place with a video call. Coleman said the stepped up safety measures help riders and drivers feel safer, something they may not have with similar services that have drivers use their own vehicles.
And the measures have started to pay off as things reopen. Coleman said in April, Alto saw a 300% increase in rides from the previous month. And as ridership increases, the company is bringing back more hours for its part- and full-time drivers.
“It was precipitous and fast, and it was very clear that despite all the things that we were doing, movement had ground to a halt,” Coleman said. “We had an asset that we wanted to leverage – our drivers and our brand and our vehicle – and that it was going to take a little while to get there, but we felt pretty strongly… that we could do it.”
During the time when rides slowed, Alto made a few pivots and found some new passengers that it plans to keep permanent as things reopen further. On a smaller level, Alto had been providing B2B service for car dealerships to use its service instead of a loaner car, as well as providing concierge deliver services for members. In the past few months, the company launched The Market, a food delivery service that focuses on helping a single local business with lunch deliveries each day. Brunch service is available on the weekends. In addition, the company has partnered Dallas-based pharmaceutical delivery startup Scripx and garden kit delivery company Gardenuity to help deliver those businesses’ products.
“Those companies are looking to extend their experience beyond their physical boundaries, and we can help them do that. We can help them take their experience out of their store and straight to their customer’s front door,” Coleman said. “What we’ve built around deliveries has actually made our business much more resilient, much stronger and ultimately provides for a better operating profit. For us as a company, if we can basically provide Amazon-like logistics to small and medium businesses all over Dallas, and hopefully eventually all over the U.S., we think that's a really compelling proposition and something were going to continue to invest in.”
Coleman said he thinks the level of cleanliness and the new services it provides will be things that users of all ridehailing services will start to expect in the post-pandemic future. He also said that because Alto’s business model is about having W-2 drivers, it has been better positioned to consistently provide high standards because it can rollout and require measures be followed across its staff and fleet.
And as the company looks to grow, Alto is looking to expand its coverage area. After raising a $6 million funding round led by Road Ventures and Frog Ventures in late January, the company announced plans to expand into California and Houston, with future sights set on 15 other metro markets within the next three to four years. Currently, Alto services more than 900 square-miles in the Metroplex.
“As an entrepreneur, I guess I’m already on the bounds of risk-taking, but this has been a big threat to our company, to our country, to our world and to our existence,” Coleman said. “We’re going to fail fast and we’re going to invest in the things that work, and we’re going to grow them; we launched more product and tried more things… than we had launched in the 10 months prior to that.”
