RideAustin SXSW Key Learnings — and wow — there were a lot…

By Andy Tryba & Marisa Goldenberg

What an experience… To be less than 10 months old and take-on an iconic event like SXSW was an amazing learning opportunity for RideAustin. And despite the hiccup for a few hours — we’d have to say ALL the local rideshares did a kick-ass job. I think a few of us learned the hard way that the spotlight is incredibly bright when you mess up (as did Uber and Lyft on Halloween 2014 or on New Year’s Eve 2016 on their outages) — but we all live and learn… And though several of us compete in Austin for rides — for this event — we were all on the same side to support the mountain of requests. And a mountain it was — we believe the collective upstart rideshare companies in Austin completed over half a million trips during these two weeks — more than the entire month of January.

As part of our open data pledge — here were some of our key learnings from our first SXSW:

181k rides in 2 weeks — far and away more than we’ve ever done…

In a short 280 days since we launched — we’ve now done over 1.3M rides. Our first 100k rides took 94 days, our latest 100k took 8 days.

During the 2 weeks of SXSW — we did nearly 80% more than we did the 2 weeks prior. The weekly ride chart (below) looks like a crazy tall tree in a forest — will be a long time until we see that again. Makes me think about the 160 TOTAL rides we did on our first day of service — we’ve come a long way… And every day from Sunday, March 12th through Saturday, March 18th was a record.

We exceeded our ‘Round-up’ goal and raised $27k for local charities during SXSW!

The SXSW crowd was very generous and a large % elected to Round-up — despite the visitors not being native to Austin (or perhaps even know much about the Austin charities in our app). We had originally set out a target of $25k for the 2 weeks — but did 10% more than that. The total raised to date is now nearly $160k.

We’ve also been asked by various media our take on Lyft’s new ‘Round-up’ feature. Contrary to others in social media saying they ‘stole our idea’ — we’re incredibly happy to see the #2 rideshare company electing to use their platform to also help charities. We believe that they will donate over $25M per year with their current volumes (and assuming our current % of riders who elect to ‘Round-up’). That’s awesome and we’d be ecstatic if every rideshare converted their platforms to help local communities.

RideAustin paid nearly $3M in driver earnings over the 2 weeks.

We had over 2,000 drivers each day of the festival, averaging ~2,300 per day. Our top driver made $5,200 in 2 weeks. 53 drivers made over $3,000 and 1,068 drivers made over $1,000. During a typical week, we usually have between 250–350 concurrent drivers on the road at any given time during the day. We averaged 475 concurrent drivers across the past two weeks, with more drivers in the evenings and on the weekends.

On average, including all time logged online with the app, our drivers made $23/hour during SXSW. Looking at only the driving time, drivers made $65/hour. For the drivers who position themselves in the highest volume areas, and take as many rides as possible — earnings were around $30/hour (with driving-time earnings of $66/hour).

Passing on the SXSW sponsorship was the right thing to do — despite giving up 90k rides

Hugh Forrest and the rest of the SXSW team are good friends of ours and they were part of our RideAustin launch event. We had good discussions on if RideAustin should be the rideshare sponsor. At the end — we decided to pass on it — knowing that it will reduce our overall ride count.

There is a good argument on if passing on the SXSW sponsorship was a smart or dumb move. Every previous Austin event sponsorship we’ve paid for had a negative ROI. But we knew SXSW could be a bit different. Unlike local Austin events we’ve sponsored — this SXSW sponsorship was a great way to reach visitors into Austin before they got to AUS airport. And since SXSW is such a heavy visitor event — reaching them was important to capture the largest % of total rides. And it turns out that this visitor awareness drove about 90k additional rides for the rideshare company that bought the sponsorship.

Purely looking at the financials — the 90k additional rides (assuming they would have gone to RideAustin) — could have created a neutral to positive ROI due the cost of the sponsorship and the margin per ride. However, we would have likely needed to spend much more on rider credits than the sponsorship itself. If pure volume was our end goal (or the marketing value of being #1 volume at SXSW) — then the sponsorship could have made sense.

But our thoughts were that a majority of the incremental rides would be from visitors that wouldn’t likely be RideAustin customers long term. And given our local Austin focus vs. visitor volume — we made the call to focus our energies (and limited non-profit marketing spend) on the Austin riders instead. It turns out they came out in spades. 55% of our SXSW rides were done by pre-existing RideAustin users — much higher than we expected — particularly since the University of Texas and local public schools were all on spring break.

From a marketing spend standpoint, we spent a total of $10K for SXSW. Most of this spend was on Facebook, Brand Ambassadors at AUS & major hotels as well as other small marketing swag. We also participated on various SXSW panels to continually drive awareness on the ‘cheap’. Amazingly — with this small spend and other activities — we were able to capture the 77K additional user rides. We estimate the TNC that did the most rides and paid for the SXSW sponsorship spent nearly 20x our marketing spend. They have a different cash position than our small non-profit and have national awareness aspirations — so I suspect they will say that the ROI was positive (and it probably was for their goals).

But for us — the $10k was a great spend and great ROI — even if we did come in 2nd in volume for SXSW.

Drivers miss Uber 10X surges, but riders don’t — is there an appropriate middle ground?

Surge…. Riders hate it, drivers love it. SXSW was really the first time we really had to use our version of surge called ‘Priority Fare’ in volume to attract more drivers. During the SXSW days — 56% of our total trips were with Priority Fare turned on vs. 11% in a typical week. Weekends always have more trips under Priority Fare than weekdays — but you’ll see the significant increase above normal in the SXSW windows below.

The fundamental reason ‘surge pricing’ exists is to incentivize drivers to come out and fulfill rider demand. By temporarily increasing what the driver makes — the theory is that more drivers will come out. And for the most part — this theory is accurate.

Surge pricing, however, can get out of hand quickly when left unchecked. Will more drivers come out for super-high cost trips? Of course. But surely there is a point that gets substantial driver supply at high, but ‘acceptable’, prices.

Social media has plenty of examples of outrageously high rideshare trips. But at RideAustin — we have always strived to have a balance. I’m sure we are still learning what that is — but we do know that we will stay ‘pure’ to the theory.

We also learned this last week that we have a different ‘surge’ philosophy than other rideshare companies. We believe that you should only increase the rider fares just enough to increase drivers to fill them — and the money should all go to the drivers (thus minimizing the total fare increase on the rider to just enough to get the drivers). But we didn’t realize that some companies actually MULTIPLY THEIR BOOKING FEE by the surge value also. To us — this feels crazy. This then incentivizes the rideshare company to surge their prices higher than necessary to pad their wallets vs. simply responding to rider requests to get more drivers out. But to each their own…

Additional data points that may be interesting:

Ride costs (including voluntary tips + charity round-ups) averaged $19.34 this week vs. $16.12 for the first week of SXSW and $14.86 the last week of February.

Trip fares can vary significantly by day and hour but averaged $19.34 for the week. And our peaks were a bit different last week — Friday was the most expensive day at $21.81, and 1–2 a.m. was the most expensive hour across the week, averaging $31.08.

RideAustin averaged 3 minute 47 second pickup times across the city and across all hours during SXSW.

After our last blog post, we learned that other ridershares use a different definition of ‘pickup times’. We previously calculated ‘pickup times’ as the time between when a driver accepted a ride and a rider got into the vehicle. But this is different than what others use since it adds about 2 mins (on average) that a driver has to wait for the passenger to get into the car and start the ride. So to be consistent with others — we modified our definition of pickup time to be the time between when a driver accepted a ride and arrives at the rider location.

As a result — RideAustin’s pick-up times average 3 minutes and 28 seconds in a typical week, with downtown areas having shorter times, and the outlying suburbs longer times. In addition, our late evening and late night hours are the shortest, because the requests are generally concentrated to downtown Austin and the University of Texas campus. Both areas draw a lot of drivers in these hours, due to the predictable nature of the incoming requests.

You’ll see from our charts that our late night pick-ups during SXSW were 3 minutes and 15 seconds, but during a typical non-SXSW week averaged 2 minutes, 24 seconds.

SXSW interactive attendees were better tippers than SXSW Music/Film

Demographics make a difference — or perhaps expense accounts do! Once the Interactive attendees headed home, Music/Film attendees were comparable tippers to our regular users.

Overall — we’re proud of all of the rideshare companies that stepped up to deliver a solid SXSW. We at RideAustin certainly had a lot of learnings — and we feel fortunate to have had the opportunity to serve both local Austinites and the visitors. It wasn’t ‘perfect’ — but as long as we learn everyday — we’ll continue to get better and better…


RideAustin SXSW Key Learnings — and wow — there were a lot… was originally published in Austin Startups on Medium, where people are continuing the conversation by highlighting and responding to this story.

#URLinkedUp AustinStartup https://austinstartups.com/rideaustin-sxsw-key-learnings-and-wow-there-were-a-lot-c4b6c6f799a?source=rss—-9504c035b990—4

#Austin Check out URLinkedUp > http://www.urlinkedup.com

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s