Another transportation startup has run out of gas while larger companies continue refuelling to tap into economies of scale. Tripda — a carpooling startup operating in 13 countries including the U.S. and backed by the Berlin-based incubator Rocket Internet — has announced that it will cease operations on March 4 after facing high operating costs and failing to raise funding to meet them.
In it, Tripda notes that it has built out operations in 13 countries — several in South America, plus the U.S., plus India, Pakistan, Singapore and Taiwan — and had matched 1 million travellers to rides.
“And yet, despite the success of our community, our operating costs became too high, and we had to reassess our prospects,” the company writes in a note detailing the closure. “Given the inherent challenge of funding our operation as it continues to grow, we realized it was time to bring our ride to an end, discontinuing the Tripda platform as it is today.”
The startup is also likely a victim of a larger trend in funding today. While there is still money to be had for the very biggest startups or those growing like a weed, it seems investors are a lot more reluctant to put money into riskier bets.
“It seems like folks would rather hope for a 2X return with Uber versus 10X in something else,” is how one investor put it to me.
Tripda says it will stay open and operational until March 4. Any rides booked before then can still be handled on the site.According to Crunchbase records and Rocket Internet itself, Tripda had raised $11 million from Rocket Internet and other, unnamed investors.
By and large, Rocket has focused on building e-commerce businesses in Europe and emerging economies, which was one way of getting around the pressure of competing against outsized U.S. rivals like Amazon and eBay.
Tripda, however, was a notable for being one of the few examples of a Rocket Internet-backed startup to tackle the U.S. market.
Perhaps because there was a less obvious large competitor in carpooling, Tripda — which was founded in 2014 in Sao Paolo, Brazil — launched in the country in November 2014 to compete against the likes of Zimride, Carpooling.com, Rdvouz and others offering long-distance ride-sharing services.
But it seems the market for carpooling in the U.S. hasn’t developed to be as fruitful as some had hoped it would be.
Zimride, which had originally been the company that spawned Uber rival Lyft, was acquired by Enterprise. Then, Enterprise eventually shut down Zimride’s crowdsourced consumer service to focus on corporates and students.
And Carpooling.com, which launched in December 2014 in the U.S., no longer seems to operate there. Carpooling.com itself was founded in Germany and acquired by another European competitor, BlaBla Car, in 2015. Frederic Mazzella, founder and head of BlaBla Car, has been public about his skepticism for growing carpooling services in the U.S.
“It doesn’t really work in the U.S.,” he told TechCrunch in 2014. “Several companies have tried and failed [due to differences]: gas and tolls are cheaper than other countries, which means there is less incentive for drivers to share rides.”
On top of this, there are efforts from larger companies that may prove to be too big for any startup to compete against in the longer-term capital and operational races.
Uber, which has raised hundreds of millions of dollars and now runs a global transportation business, is testing UberCommute in select markets. And General Motors has made it clear that it wants to be a big player in the next generation of transportation, which could also include carpooling, which it is also testing out.
Tripda, to be fair, was also looking to leverage more than just its own fledgling assets. In its home market, it complemented another, more successful Rocket transportation startup, Easy Taxi. That business has seen better mileage than Tripda, although still very modest by Uber/Lyft/Didi/Ola standards: it has raised $77 million but also claims to be the world’s most downloaded taxi app.