Last Updated on: June 21st, 2016
Boston-based start up Fasten alleges their fees are lower, so the driver gets more money. However, their plan is to undercut the fares of Uber and Lyft to gain market share.
This makes sense, because a passenger has no real incentive to use Fasten unless they save money. Nonetheless, lower fares, even with Fasten’s low $1.00 cut per ride, will mean lower income for drivers.
Fasten has no incentives we can find for drivers at this time. The only statement made is they will waive the $1.00 fee for one month. Big deal. A better offer that apparently expired in May was a guarantee a driver would earn $1500 in the first week. The fasten website is not updated regarding this guarantee, which does not bode well for their ability to support their software.
The guarantee may be a reasonable promotion, but not a soul would want to sign up if it was not in place. The only reason I can fathom is that it allows cars going back to 2001, so can tap drivers with older vehicles.
Still, when in place, the guarantee required a driver get 75 rides in a single week. That would require over 10 rides a day for seven days. And they cannot turn any ride down no matter how out of the way it is and how likely it is to be canceled. If the 75 rides gross less than $1500, then the company pays the difference to the driver. So, say the driver averaged $10 a ride, and got 75 rides, the company would shell out $750.
This sounds reasonable to a degree, but it is rather weak because Fasten is not proven, and there is no requirement for Fasten to provide sufficient rides to the driver. If Fasten cannot provide enough rides, tough luck, it is the driver that gets the shaft. That is not the normal meaning regarding a guarantee. The guarantee would require that the driver be available and accept rides as stated, but if the company cannot provide 75 rides or continually takes the driver well out of range of Boston, that is not the driver’s fault and out of the driver’s control. All Fasten would have to do is rig the system to ensure almost no one gets the guarantee.
Without legitimate incentives for drivers, the only drivers Fasten will get will be drivers Lyft and Uber do not want. Without Fasten guaranteeing the number of rides to a driver in any guarantee promotion, the promotion loses its appeal. Drivers would have to sit and wait on Fasten while ride after ride on Uber or Lyft pass them by just to likely never reach the required 75 rides.
Referral bonuses are basically worthless. A driver gets nearly nothing for referring another driver. It is difficult to recruit another driver that goes through the entire process of signing up to drive and then also meeting the criteria to qualify for a referral bonus. Fasten offers nothing significant for it. Drivers get coupons to sign up, but they get the same or bigger coupons from Lyft and Uber.
So, the only advantage that seems to exist at first is that Fasten will only take a fee of one buck a ride. But they also impose some pretty bad circumstances for any driver. First, they have no minimum fare. Great. Now a driver can drive for miles all the way across Boston at their own expense to pick up a passenger going 4 blocks and get a $3.33 payment (Base Fare+1.10+0.38 on a 2 minute ride), of which a buck goes to Fasten? So $2.33 goes to the driver. It will likely attract the bane of any ride share driver, the distant pickup that takes a short ride.
Finally, the only way for Fasten to compete would be to make the fares appealing to customers. If a customer is not saving a significant amount over Lyft or Uber, why bother to use Fasten? So, say that Fasten undercuts Uber and Lyft by 25 to 30% to get more rides. Who will ultimately pay for that discount? The driver. They will get 25 to 30 percent less a ride and still pay the buck to Fasten. So, ultimately, it is not any different and the company is not as well established or accepted. A bit of math:
Using a ride that grosses $30 on Lyft, but only $21 on Fasten. Same exact ride.
Lyft $30 – 25%($30) = 22.50.
Fasten $21 – $1 = $20.00
Not only does the driver earn more with Lyft, Lyft makes more money to support their system and can provide more customers across the board.
Fasten has only one prayer of taking any significant market share. They must offer meaningful incentives to provide drivers a reason to drive for them. And they have to hire some people that have at least some inkling of business sense to compete with Uber and Lyft long term.
Currently, Fasten operates in two cities only: Boston and Austin.