Seems like a less than optimal time to be expanding, but here we are.
Alto, a new rideshare company based in Dallas, will roll into view in Houston as it looks to expand its reach and compete with Uber and Lyft.
The app-based service, which [arrived] in Houston Thursday, looks to distinguish itself in the market by offering what it calls a consistent experience by managing its own fleet of 200 luxury Buick sports utility vehicles and hiring employees to drive them rather than relying on independent contractors, as competittors such as Uber and Lyft do.
Alto’s expansion comes as a debate rages in California over how companies such as Uber and Lyft should treat its drivers. There, a new state employment law requires the gig economy companies to classify drivers as employees, but voters could exempt the companies via a ballot measure in November.
Alto also is expanding as the coronovirus pandemic batters the ride-hailing industry. Uber, the market leader, reported a 75 percent decline in ridership during the quarter ended June 30, as people grew wary of leaving the house and entering enclosed spaces.
Alto’s business has shrunk, too. Business is still down about 30 percent from pre-pandemic levels, [Alto CEO Will] Coleman said. “There’s some people in Dallas that are going to continue to not get into cars,” he said, “so our total customer base is smaller.”
That makes expanding into new territories more important to the company’s growth, Coleman said. Houston seemed like a natural next step, he said, given its proximity and size — it’s the nation’s fourth largest city. It also appealed because the company caters to the business community, which in Houston is large and international.
Business travel from the airport was a big sales driver before the pandemic, he said, and is beginning to pick back up. “People are looking for safe ways to move again,” Coleman said.
Not surprisingly, Alto costs more than Uber; the story does not do a comparison to a taxi fare, which would have been interesting. As someone who thinks Uber and Lyft treat their drivers like trash, I like Alto’s model, I just don’t know what their prospects are, even without factoring the pandemic into the equation. But if you’re the type of person who uses this type of service, and you’ve been wishing there was an alternative to Uber and Lyft, here you go.
(Also, can we please come up with an alternative term for “rideshare”? That doesn’t fit all that well any more for Uber and Lyft, and it makes even less sense for Alto, which actually owns the vehicles and employs the drivers. They’re basically a livery service, but that word makes me think of horse-drawn carriages with footmen. I am open to suggestion here.)