InDrive (formerly inDriver) is bringing a new kind of ride-hailing app to South Florida. The startup operates an “offer-based” platform where riders can determine the cost of a ride themselves, and nearby drivers can accept, decline or dispute the offer.
The business model could be attractive when ride-hailing customers feel squeezed by higher fares and drivers are classified as independent contractors but unable to dictate how much their rides cost.
InDrive officially launched Thursday in Miami, its first U.S. market. The company says it has been downloaded more than 175 million times, covering 655 cities in 48 countries.
If you’ve never heard of InDrive, it’s probably because the company has more presence outside of the traditional Western world. Originally from Siberia, InDrive spun off its Russian entity in July 2022 after Russia’s war with Ukraine began in March of that year. The company said it has no plans to make other investments in Russia.
InDrive’s main markets are in Latin America (Mexico, Colombia, Peru, Brazil, Chile, Ecuador) and Asia (Kazakhstan, Indonesia, Pakistan, India).
InDrive raised $150 million in debt financing from General Catalyst in February and has been aggressively expanding into new territories since then.The company recently announced plans to expand to 15 new cities in Nigeria, And has been doing business in Africa for many years.
So why America, and why now? US country manager Adam Warner told TechCrunch that InDrive’s strong foothold in Latin America was one of the drivers behind its launch in South Florida, specifically Miami.
“We really built our entire business model guided by freedom of choice,” Warner said. “Our pricing is not determined by some kind of computer program. Drivers and riders are indeed free to negotiate the price of each ride, and drivers are not penalized for declining orders. So, unlike my peers, we put drivers and consumers first by bringing transparency and fairness to ride-sharing.”
sounds good! What could go wrong?
Obviously a couple of things.
take a quick look app review Showcasing the plethora of issues customers have with apps and services—issues that may not be popular with US audiences.
While Uber and Lyft have questionable ethics, they ensure reliable rides and services through a combination of incentives and penalties for drivers who accept or decline rides. InDrive is more conscientious, but this can lead to longer wait times for passengers, or repeated cancellations for passengers.
InDrive is working hard on a marketing campaign to get as many drivers as possible to sign up, Warner said, so that if one driver cancels, another will be waiting. One way the company is luring drivers is by taking no commission between July 2023 and January 2024, meaning drivers will get up to 100% of the fare (subject to airport fees and highway tolls). InDrive typically costs around 10% of each ride. Uber and Lyft account for 25%.
The company also pledged to maintain a minimum ride price of $10 in Miami. Today, InDrive is rolling out with 3,500 registered drivers in South Florida.
Customers have also complained that InDrive’s customer service does not do a good job of handling issues such as frequent cancellations by drivers or drivers changing the fare agreed upon when picking up the car. Warner says InDrive has customer service teams in Mexico and Malaysia (but most importantly not in the US) to handle any issues that arise.
In total, InDrive has raised about $387 million, according to Crunchbase. That’s not a small number, but it does mean InDrive has to stay lean compared to the competition, which may affect the quality of the product. Customers who reviewed the app also complained that it was buggy, with ETAs off and drivers not always knowing how to get from point A to point B. Part of the reason for that last problem is that InDrive doesn’t have its own proprietary mapping and GPS system like its peers, which Warner says is a huge cost.
“We’re giving drivers the freedom of choice to turn on their own map service,” Warner said. “We don’t invest heavily in specific parts of it. We rely heavily on partnerships with Google Maps, Waze, Apple Maps, etc.”
If InDrive wants to compete with the likes of Uber and Lyft, it has to get its customer service and app sorted.But it’s not impossible, and InDrive is in no rush to capture the US market
Warner said the company is focused on solving South Florida’s transportation needs first and doing so in a sustainable manner.
“InDrive is definitely willing to expand its presence in the U.S. and really focus on markets where mobility and public transportation options are insufficient,” Warner said. “Also markets where travel costs are high and tourism is emerging.”