Skedaddle Inc., a startup based in Boston and New York, is using technology to shake up the bus industry.
Instead of people buying tickets for rides based on fixed schedules for predetermined routes, the company aggregates demand to and from desired destinations. Skedaddle lets customers say where and when they want to go, and then gets bus companies to supply rides when there's enough demand.
Skedaddle, like many other startups, is using technology to disrupt how a traditional industry does business. Certainly, the young company's innovation is yet another reminder to executives in traditional industries of the need to leverage IT to stay competitive.
However, its ride-sharing service model is not a slam-dunk simply because it's high tech.
Building a successful digital company means more than providing a good product, said Bala Iyer, professor and chair of the technology, operations and information management division at Babson College.
Iyer said digital companies such as Skedaddle, where there are two distinct sides -- in this case, riders and transportation providers -- need to find a way to enter a "virtuous cycle." That is, they need to keep coming up with new and unique offerings that aren't easily replicated by other companies. The new products draw in more users, which, in turn, brings in more providers, which attracts more users and then again more providers.
"Any coder can launch something, but if it was just that easy, life would be simple," said Iyer, whose research focuses on digital businesses.
He said a digital company can't simply offer a solution and be successful long term, because others can easily replicate that product. Indeed, there are other ride-sharing service companies besides Skedaddle that aggregate bus transportation demand.
Instead, successful digital companies become platforms that others build upon to create a whole network. Case in point, he said, is Microsoft, which on its own is just a software product; as a platform company, it is much more, because so many others have built their own products on Windows.
"You could write another version of Windows, but you couldn't get all those people to write to your new platform," he said.
Seeing a problem, solution
Skedaddle started as many new companies do: because the founders experienced a problem.
Brad Werntz was traveling from a ski trip back to Boston about three years ago to meet with Nestler for a Sunday lunch when he found himself stuck in traffic. He noticed most of the cars, like his own, were occupied only by the driver -- and he thought it was crazy that more people weren't traveling together.
Nestler said he and Werntz talked over that observation.
"All we wanted to do was touch a button, get in a vehicle and go on our way," Nestler said, adding that they, like many urban Millennials, did not own cars. "Getting around with Lyft and Uber was getting simple and efficient, but leaving the city to go to a beach or a sporting event or to another city -- that was always a pain. We found we were fumbling through [websites], it was expensive and it was a poor experience."
Adam NestlerCEO, Skedaddle
Their solution was to aggregate demand and put everyone in one vehicle, while making it convenient and affordable.
"That led us to the charter bus industry," Nestler said, noting that they quickly learned that there are about 4,000 bus companies in the United States and their buses and vans sit idle 80% of the time.
Nestler, Werntz, Lou Harwood and Craig Nestler (Adam's brother) -- all of whom were working at other startups -- came together as Skedaddle co-founders in fall 2014 and quickly built a technology platform that would enable their vision. A new ride-sharing service was born, and users followed.
"We had a mediocre platform, but we saw we could get people to use it and [thought] if you can find a market with a mediocre platform, that means you have a pretty willing audience who will use your product," Nestler said. "So, we were convinced it was a massive opportunity."
Key technologies for a ride-sharing app
Harwood, who serves as the company's CTO, said initial work on the ride-sharing service focused on building out the company's pricing code in addition to creating the website.
He said he opted to use Heroku, a cloud platform as a service that supports several programming languages, and the ElasticSearch search engine for the back-end search service to speed up and simplify the deployment process.
The company in 2016 launched its first mobile app.
Now with 19 employees, Skedaddle is planning for long-term growth and considering how to scale its technology to meet demand, Harwood said.
"I asked: 'How do we scale our current product and platform to where we want to be in two years or for a million users on the site at the same time?' If we want to grow, that's where we have to start thinking," Harwood said.
Company executives are also focusing on developing new functions and features, such as a driver app that lets drivers check in riders and lets riders track their rides.
Nestler said they're also thinking about how to leverage both mobile and data better, to understand where riders want to go, what their interests are, and who their neighbors and friends are so they can better target and market ride-sharing services. Skedaddle, for instance, could alert customers when their nearby friends are trying to book a bus to head to the beach.
"Then, we can use that to push information at the right time," Nestler said. "There are apps that will give you recommendations about what to do in your city or around. This will tell you where people are traveling and has the mechanism to deliver you to these places."
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