The cost of competing against Uber can be high, and today comes news of another casualty in that race. TechCrunch has learned and confirmed that Nick Allen, the founder of Shuddle, has stepped down as CEO of the company. Shuddle is an on-demand transport service aimed at mainly at children, but also seniors and others who need extra attention beyond simple pick up and drop off.
Allen, who quietly left the role earlier this month, has been replaced by Doug Aley. Aley comes from Minted, where he had been the GM of new business. Before Minted, he was an executive at e-commerce giants Amazon and Zulily (where he also focused on parents as customers).
Allen — who had also cofounded Uber competitor Sidecar — is not leaving Shuddle altogether. He will stay on as a board member and special advisor, “helping to guide the company’s mission,” a spokesperson said in an emailed statement to TechCrunch.
Shuddle did not comment on the reason for Allen stepping down. One of our sources claims he “jumped ship” after Shuddle failed to take off and revenue stagnated. Shuddle simply says he stepped down voluntarily. In any case, his departure from the role earlier this month was sudden and unsettling, sources say.
Still, it seems amicable enough. “I’m extremely proud of the Shuddle team for pioneering safe and trusted rideshare for busy families, and I feel privileged to have served in my founding role,” said Allen in a quote provided by Shuddle. “As the company expands and evolves I’m thrilled to pass the reins to experienced working parents like Doug on the front lines of work and family balance.” (We have also reached out to Allen directly and will update with further comment as we get it.)
“My passion has always been growing companies that improve the lives of consumers,” Aley added in his own statement. “Today, I’m thrilled to join a great team that improves the lives of the most important social unit: families. As a father of two myself, I intimately understand the challenges facing modern families today, and I feel Shuddle is in an incredible position to be a great resource for those families.”
Bumpy roads for transportation startups
It’s hard to say how Shuddle has been doing of late. The company does not disclose data on how many rides it’s providing today, nor do we have other metrics that might underscore its progress. In the past it’s said it has thousands of customers and hundreds of drivers.
Earlier this year, Shuddle raised $9.6 million led by RRE Ventures to expand from its initial base in the Bay Area. As of today, Shuddle has yet to start services outside the region. But it has made moves to grow the number of rides on its platform. Teens and tweens, for example, can now get their parents’ permission to book rides directly on Shuddle.
From the start, Shuddle differentiated itself from other on-demand transport startups by focusing on certain niches of the market: children and others who needed extra assistance and care. For drivers, Shuddle provided them with extra insurance to carry children and additional training to do so. For parents and caregivers, it provided peace of mind with apps to track the progress of a passenger, extra safety and background checks of drivers, and more details about the drivers.
Adding extra checks and features may weigh down on Shuddle’s margins, but it also charges more than other transport services — there is a membership fee of $9, and rides are typically 15% higher than a basic Uber fare to the same destination, starting at $8 for carpooled rides or $12 per family.
But the wider picture for transportation services has been that success comes with economies of scale, which means a bumpy road for all but the very biggest players.
Allen’s earlier company, Sidecar, recently pivoted into concentrating on deliveries for businesses instead of transporting passengers after finding it too hard to go up against Uber and Lyft.
Lyft, meanwhile, is raising $500 million on a $4 billion valuation but is apparently spending a lot more than it is bringing in to grow and compete against its bigger rival.
Hailo ($100m raised and now looking for more) has retreated from the U.S. and faced layoffs. And like Sidecar, Gett is also looking to diversify into different verticals.
And even as Shuddle provides extra layers of service for its niche, it could easily find itself competing against much bigger and more capitalised rivals.
Uber, which has raised around $1 billion, could easily take it on by launching a similar service. Uber is already making some inroads into specific use cases for those unable to transport themselves: this service in Sarasota takes patients to and from medical appointments. And with UberFamily, it has already started honing its relationship with parents by offering extras like carseats. (Lyft used to provide rides to minors when their parents requested the service, but that is no longer the case.)
And that is before you consider existing competitors, which include no less than Mercedes Benz and smaller startups like HopSkipDrive out of LA.
Shuddle itself has raised around $12 million to date — extremely modest by Uber standards. Its investors are also behind the leadership change.
“On behalf of the Board of Directors, we are grateful to Nick for the important role he has played in launching Shuddle and helping to lay the foundation for the company’s future growth,” said Kirsten Green of Forerunner Ventures. “Today we are excited to welcome Doug Aley as CEO and to leverage his track record of success in leading teams and products that put consumer experience at the forefront.”
On top of the CEO swap, Shuddle’s also adding another exec to its lineup. Andrew Byrnes is joining as general counsel and SVP of public policy. Byrnes’ last role was as chief of staff at the U.S. Patent and Trademark Office. On-demand startups including Shuddle itself have faced a lot of regulatory scrutiny, and this appointment should help Shuddle on that front.