Friday, April 8, 2016
Evercar: Making EVs The Vehicles Of Choice For On-Demand Drivers
Story by Benjamin F. Kuo
In the world of on-demand driving—such as driving for Uber and Lyft--one of the biggest costs for drivers it the cost of owning, maintaining, fueling, and cleaning their vehicles. What if there was a way to lower those costs, and make it easier and more profitablefor drivers? Los Angeles-based EverCar (www.myevercar.com) says it has done exactly that, by using both the inherent advantages of electric vehicles and experience managing large vehicle fleets. We spoke with Michael Brylawski, the CEO of the company, to talk about the company--plus how it is hiring and expanding here in Los Angeles.
Explain how Evercar works, and what you are doing?
Michael Brylawski: At its simplest, Evercar is a service that provides electric and other clean vehicles to drivers for use in the on-demand economy, such as for Uber, Lyft, Postmates, or Instacart. We launched in Los Angeles last August. Evercar doesn't just provide the vehicle; we also provide the fuel, insurance and worry about the clean up for drivers. We provide everything a driver needs so they can focus their attention on the main priority, which is making money. By doing this, and also by using a fleet of primarily electric vehicles, we can provide this service at a price which is more cost effective than someone using their own car.
Why target the on-demand economy?
Michael Brylawski: If you look at one of the largest fleets out there right now, used for government purposes, there are 1.8 million sedans in those government fleets. When we first started in the industry, the largest demand was from the government, particularly Mayor Greg Ballard in Indianapolis. The challenge with those types of fleets is that they are a city, which means they are bureaucratic, complicated, and have a very slow sales cycle. Although we had developed a really good system to manage those fleets, we were not getting the velocity we wanted to get more of our product on the road. In 2011, the on-demand category didn't exist, but in the last four years, the fleet has gone from what were zero vehicles, to an estimated 2 million people in the U.S. driving for on-demand services. That's growth from almost nothing.
If you look at the challenges that the drivers who are driving for on-demand companies have, you'll see the challenges they face are remarkably similar to anyone with a vehicle fleet. First, there's the challenge of operating costs. For a business that operates a fleet of vehicles, fleet management lowers the cost of owning and operating a vehicle. That's the same thing for a driver for Lyft or Uber. What we realized, is that by applying electric vehicle technology, you are able to get the lowest cost of ownership for a fleet. Why not do that for an Uber driver and why wouldn't electric vehicles work as well? The biggest difficulty, as I'm sure you know if you have used Uber and Lyft, is you don't see many drivers with electric vehicles.
Explain how what you do benefits those drivers?
Michael Brylawski What Vision Fleet is good at is managing those electric vehicles, and taking out the very complicated technology work associated with on-demand.. We use our technology expertise to create integrated back-end solutions that allow us to review data from the car, driver and charging stations, which is compiled to help drivers intelligently manage the electric vehicles. For example, it tells them when and where to charge, and helps them operate the vehicle to match the range and performance of gasoline benefit. That's all before even considering the environmental benefit. Most drivers and others are unaware on the environmental benefits of electric vehicles—and our savings are all about the cost benefit.
Our technology manages the state of charge, keeps track of when vehicles are charging, helps drivers intelligently charge their vehicles, and most importantly, have a view of the whole infrastructure and vehicle operations, to make sure their car is charged and ready when they get there. In order to make the cost saving compelling, you have to go from that traditional model of individual car ownership, to shared asset utilization. On-demand is really not about the sharing economy; on-demand is about the micro entrepreneur economy. Most people who work with on-demand services use their own vehicles, and those vehicles are not shared. But if you look at Evercar, we have shared vehicles, and gain the benefits of that sharing. Drivers come to our platform and system, reserve a vehicle, and they know that vehicle's will have a full battery, and we make it convenient for them when they need it. Drivers return the vehicle to the lot, where the vehicle is charged for them, which is the same as you might see with fleet operated vehicle.
How is it that an electric vehicle is cheaper to operate than a traditional vehicle?
Michael Brylawski: The Nissan LEAF, which we utilize, costs $5 an hour to operate. That does not just include the car, that includes the insurance, the fuel, maintenance, and cleaning. Case in point, even in Los Angeles, a typical car in a stop-and-go drive cycle like you have at Uber can burn upwards of a gallon an hour. Even in this age of low fuel prices, the math adds up. It costs $6 to $8 an hour to operate a traditional vehicle, depending on that car. We've made the electric vehicle work as the lowest cost vehicle to operate. The challenge with electric vehicles, and why you do not see a lot of EVs being used by on-demand drivers, is it requires some pretty sophisticated technology to maintain those vehicles. A great example of this is with the Nissan LEAF, our primary vehicle, has a range of about 80 miles in the real world. With our network, we are able to have those vehicles not just charged, but we also give drivers access to around 100 fast charge stations across LA County. Those fast charge stations, where our drivers can charge for free, gets them 80 percent charged in 30 minutes so they can keep on going. With the rate and distance traveled for ridesharing and delivery, that means you can go anywhere from 3 to 5 hours before having to charge. And, when you do have to charge, you are guided to a fast charge station, where you charge in 30 minutes. In the first month that we launched, we had two drivers take the LEAFs, and drive them for 24 hours a day. They drove around 400 miles on eight total fast charges. We were told this was an unofficial world record on the distance traveled in a day using an electric car.
The second reason we can keep the operating costs so low, is because these are shared vehicles. In the old era of vehicle procurement, you would buy your own car, you would maintain it, you would finance it, and you would fuel that car. But you're not really utilizing that investment efficiently. Even if you are driving for Uber and Lyft for eight to ten hours a day, you aren't using the vehicle for most of the time. With Evercar, and the way we operate, those vehicles are working for 24 hours.. Because of that utilization rate, the expense of those cars is spread across a lot more hours, which further helps to reduce costs. All of those things together create the lowest cost ratio for drivers on Uber and Lyft.
So where are you in terms of launch and availability?
Michael Brylawski: Michael Brylawski: First of all, we operate close to 300 EVs in Atlanta, so this is not our first rodeo in terms of managing large fleets. In LA, we currently have 53 EVs here, and we also have other clean vehicles. To be clear, our core vehicle is an EV, but we also have Hybrid Prius—I guess Prii—which are priced a little higher for drivers who are willing to pay because with those you can forego recharging. So combined, our fleet is now well over 100 vehicles in LA. We actually have vehicle financing for over 1,000 vehicles, though not all of those will necessarily be in LA; it all depends on demand. There's tremendous demand right now. We have over 100 active drivers, people who have driven our vehicles in the past week, and we are now seeing upwards of 400 to 500 applications a week to drive. We're basically capacity constrained. We're adding vehicles and locations as fast as we can, and we see these doubling and tripling over time.
Right now, we have eight lots, from Hollywood, to Downtown, to the Westside, and Inglewood. We're tracking where our leads are coming from and where demand is, and trying to source parking with charging where there is demand. This isn't a car rental service, this is really a technology platform that just happens to use EVs and hybrids to make drivers of on-demand services more effective and more profitable. We're rapidly expanding our technology team, and we want to add at least a dozen developers and others. We have a lot of jobs open on our site. We're actually developing a suite of technology tools, creating a robust back end and front end. We just launched our driver portal, our driver app, and we'll be rolling out a more enhanced app in about three months. The game isn't just about the cheapest service; it's also making drivers make the most money, and helping them with the bottom line. We've recently launched a feature called Evercar Coach, which gives drivers recommendations based on the analytics on how our cars are operating, which drivers are making money when, and which services are making them the most money. The analytics are probably the most interesting part of the business, and where we see the most opportunity.
So what's the strategy for scaling the business?
Michael Brylawski: So it's fun to think about scaling. I think there are a couple of aspects to scaling. It's definitely a capital intensive business, but we have a very capital light business model. Due to Vision Fleet and our origins, we did a lot of fleet work and fleet financing. We have a very sophisticated financing team, which is being very intelligent about how to build the capital stack and finance all of the technology, metrics, and infrastructure. It's absolutely not a traditional equity play, where we would use our balance sheet to buy vehicles. We know how to do "big boy" financing of all of this equipment, because we've been doing this for three years. When we started Vision Fleet, we didn't know how to do all of that. The biggest scaling challenge, which is not unique to Evercar, is access to parking and charging. That's part of the reason we are using the Prius. It's easier to expand, and you don't have to worry about charging over night. That being said, the future is definitely in electric vehicles. When those vehicles are parked, they need electrical service equipment and chargers. We have a group basically working on both on our own, and partnership to secure parking and charging where it's needed.
Most of our senior teams are veterans of past startups, and have seen both successes and failures. One of the biggest failures we've seen is not getting enough technical depth and operational depth early enough and taking shortcuts. So, we've spent a lot of time on operations building, and thinking about the decisions we are making and decisions on the technology we have deployed—not for the scale at where we are at, but the scale at where we will be at the end of next year, when we have a few thousand vehicles across several locations. Operations building and designing systems for scalability is a big focus for us.
The third is building our team. We have a fantastic team. This is our third startup, and I love the team we have, and we have to recruit more great people. Los Angeles has been great for our company, and we also have a pretty good team in San Francisco as well. Ultimately, it's about finding great and talented people. We're doing really cool stuff; they're getting exposed to really cool technology. We're also having tremendous benefits on the environment. EVs, particularly in California, are extremely clean, and pollute significantly less and contribute less to climate change. Also, by helping Uber and Lyft, we're actually taking vehicles off the road. That's a subtle thing. People do not have to use their own car. I'm an example of that, because even before Evercar, I had shrunk our own personal fleet to one EV, and have been using Uber and Lyft as alternative solutions for transportation. With what Evercar is doing, by having drivers share vehicles, we're actually taking three or four cars off the road every time someone enters our service. So, we're not just moving the world towards EVs, we're also reducing the number of vehicles congesting the roads.
Thanks, and good luck!