Moped-sharing startup Revel plans to launch a Tesla-only ride-hailing service in NYC – The Verge

Electric moped-sharing startup Revel is adding a new vehicle to its fleet — this time with four wheels instead of two. The Brooklyn-based company is launching its own Uber-esque ride-hailing service in New York City using only electric vehicles from Tesla. And true to its Uber-imitating ways, the company is announcing its intention to launch the service before obtaining its license to legally to operate in the city.

It’s an interesting — and potentially risky — move for the three-year-old startup with thousands of shared electric mopeds in cities across the US. As it grows in size, Revel has also gotten more ambitious, launching an e-bike subscription service and unveiling plans to build the largest EV charging station in New York City. Now, it has its sights set on Uber and Lyft’s customers as it expands into ride-hailing.

But rather than poach customers from Uber and Lyft, Revel may end up hurting New York City’s already struggling yellow taxi drivers. The company says it plans to offer its service only in Manhattan to start out, with pick-ups and drop-offs taking place below 42nd Street. The company says it will expand into additional neighborhoods and boroughs based on where the demand is. That’s prime yellow cab territory, and with ridership still down 80–90 percent since March 2020, the timing couldn’t be worse for many cab drivers.

The city’s Taxi and Limousine Commission (TLC) has been at odds with Uber and Lyft over the years over its efforts to cap the number of for-hire-vehicle licenses it hands out. The TLC exempts wheelchair-accessible and electric vehicles from the cap, giving Revel a loophole to launch its Tesla-only service.

“TLC capped for-hire vehicles because supply already exceeds demand,” TLC Commissioner and Chair Aloysee Heredia Jarmoszuk said in an email to The Verge. “The electric battery exemption exists to encourage already-licensed cars to go green, not to flood an already saturated market or to disenfranchise the Yellow Taxi sector in Manhattan. This ride-share scheme deviates from the spirit of those rules, and TLC will not cut corners in doing its full diligence.”

A TLC spokesperson was more blunt, saying, “Revel is not licensed to operate for-hire transportation vehicles in NYC.” But Revel says that, as of this month, the TLC approved its base application and issued its base license number.

“We are currently finalizing this process,” a Revel spokesperson said. “Revel has always, and will continue to operate legally in any city where we offer our service.” (Uber famously flouted the TLC’s rules when it launched in New York City back in 2012.)

In a statement, Revel CEO and co-founder Frank Reig dismissed the TLC commissioner’s concerns, stating that the company was committed to following the rules as laid out by the city’s regulations. “Our ability to operate doesn’t depend on the Commissioner’s opinion—it depends on us taking the steps laid out by law to complete the administrative licensing process, which we’ve done since the start,” Reig said. “Right now we are exactly where we need to be as we look towards putting Revel rideshare vehicles on the road in May.”

Revel wouldn’t reveal its pricing, but it said it would be competitive with Uber and Lyft. In New York City, vehicle-for-hire firms charge on a per-mile basis, with booking fees and Black Car Fund surcharges tacked on at the end.

If it ultimately receives the green light to launch, Revel clearly wants to make a splash with its all-Tesla fleet. The company has 50 bright blue Tesla Model Y vehicles with Revel’s logo emblazoned on the side for the initial launch. The Model Ys will be slightly modified, with the front passenger seat removed for added legroom. As per COVID-19 guidelines, a plastic partition will separate the driver from the passengers, and the vehicles will be cleaned on a daily basis.

The fleet will be owned by Revel, which is another divergence from Uber and Lyft, which subscribe to an asset-light business model where the drivers or vehicle-for-hire bases own the vehicles. As such, Revel will be responsible for all of the costs associated with ride-hailing, including maintenance, cleanings, and refueling — or in this case, battery charging. To help with that, Revel’s new Superhub charging station will go online with its first 10 chargers starting in June 2020, with more locations planned for across the city in 2021.

Drivers will be hired as employees by Revel and will have access to training, health care, and paid time off. This is similar to how Revel classifies its workers who rebalance the company’s fleet of electric mopeds.

It’s unclear whether the company’s differences from Uber and Lyft will be enough to convince regulators that it would have a negative impact on the yellow taxi industry in New York City. Uber’s emergence over nine years ago has sent taxi medallion prices tumbling, with many indebted drivers calling for a bailout from the city. Nearly a thousand drivers have filed for bankruptcy, with at least six drivers dying from suicide.

Ride-sharing also raises a host of safety concerns. Uber and Lyft have long struggled to keep riders and drivers safe from one another. In its first safety report, Uber disclosed that 3,045 sexual assaults occurred on Uber trips in 2018 alone. Additionally, nine people were murdered during Uber rides, and 58 people died in auto-related crashes. Drivers reported being victims of assaults at roughly the same rate as riders. Uber and Lyft recently agreed to share information on drivers who were deactivated for committing serious offenses.

Revel has already sparred with the City of New York over its sometimes-scofflaw moped customers. Last year, Revel was forced to temporarily shut down its service after two customers were killed and one was critically injured while riding the shared electric mopeds. The company eventually resumed service with new protective measures for riders like a mandatory in-app safety test and a requirement that all riders take a selfie of themselves wearing a helmet before they’ll be allowed to ride.

Revel also isn’t the first micromobility company to consider leveling up to cars. Scooter- and bike-sharing service Lime briefly flirted with electric car-sharing with its LimePod product in Seattle, only to shut it down after a few months.

Update April 28th, 11:05AM ET: Updated with a statement from Revel CEO and co-founder Frank Reig.