Dallas-based ride-hailing company Alto is exiting the Bay Area, according to SFGate, which reviewed an email sent by the company to local drivers.
The email by Alto CEO Will Coleman said the company was leaving San Francisco and Palo Alto to focus on other markets that it currently operates in and will refund any membership fees to San Francisco riders.
"After careful consideration, Alto has decided to depart from the San Francisco market and reallocate resources to the higher growth markets that Alto currently operates in," the company said in a statement. "Rideshare usage in San Francisco is still 40% below pre-pandemic levels and hasn’t rebounded, so Alto made the decision to discontinue services in San Francisco. The company is seeing strong demand and growth across all other markets - Los Angeles, Miami, Dallas, Houston and Washington DC. Expanding in existing markets and launching in new cities is where Alto will continue to focus its attention and resources."
Alto aimed to offer a markedly different experience for riders and drivers than with Uber and Lyft. The company paid its drivers as employees and offered a suite of benefits like health care, dental, paid time off and sick leave. Riders had to sign up for a membership in order to access Alto's uniform fleet of white Buick Enclaves.
The service entered San Francisco and Palo Alto last year, and had about 100 drivers and 50 leased vehicles in its fleet.
Coleman spoke to the Business Times last year in July, where he opined on the difficulty of entering the California market.
"California is not an easy place to do business, the laws are very tough and it's incredibly litigious, and so for all those reasons, it was a big move for us to come here, especially in our position as a direct employer," he said. "In fact, some of our competitors, may look at the laws in California and say that they're overbearing, and the reason that they have their model is because the level of cost associated with having an employee in California is significant. But we believe that what we're doing is right, and not only is it the right way, but it's the way that we're going to provide the best product to our customers."
To date, Alto has raised almost $109.5 million with its last funding round in September 2022, where it raised $50 million for a Series C.
