
A ride-hailing startup for kids designed to provide on-demand rides to unaccompanied Bay Area children has just ceased operations.
After just two years, a San Francisco-based taxi-app service similar to Uber announced it would shut down all operations Friday due to insufficient funding.
CEO Doug Aley said that the start-up’s money ran dry. He explained that the business needs heavy venture backing to maintain its infrastructure needed for customer acquisition and driver recruitment.
In 2015, the company collected an extra $9.6 million in a bid that the business would expand outside the Bay Area. In the end, all the funds were spent on running current operations, Aley added. According to reports, the business failed to generate profit until this year.
In the meantime, the company tried to raise about $15 million needed to become more profitable. But investors weren’t so keen on investing in a young start-up with a slow start. Aley added that on-demand businesses are no longer investors’ favorites.
The CEO noted that newspapers heralded an on-demand apocalypse just by the time when the 32-person business struggled to gather more funds.
Shuddle, also known as “Uber for Kids,” was designed to provide on-demand paid rides to kids to and from their homes. Most drivers were self-employed women working as teachers or care providers.
According to the company, Shuddle has offered 65,000 rides to Bay Area residents since its creation. The firm reportedly had 2,600 customers who demanded on average 7,000 rides per month. Half of users booked more than four rides every month.
Aley noted that the figures show that the service is needed. He added that parent feedback shows that the startup is crucial since it sometimes even saved marriages. Yet, the rides of the taxi-app-firm for kids were more expensive than Uber’s. The firm explained that the extra money was required for additional driver background checks and infrastructure.
One ride costs about $24, with three-quarters of the sum going to the drivers.
But Shuddle is not an isolated business. Other companies offer on-demand rides to children who are unaccompanied by their care-takers. For instance, LA has HopSkipDrive, which raised $14 million funding and announced that it would expand beyond Southern California. Kongo also caters for clients in San Francisco, and Zum in San Mateo.
But the first firm to offer on-demand rides in San Francisco was Sidecar, which got engulfed by Lyft and Uber. Shuddle founder had a stake in Sidecar and had to sell some of the firm’s intellectual property to General Motors. Reportedly, Shuddle will also follow suit.
Image Source: Shuddle.us