RideTandem, the London-based mobility-as-a-service startup providing workplace transport is today announcing the conclusion of its seed funding round, raising £1.75M. The startup is providing transport solutions for people previously cut off from jobs by expensive, infrequent, and unreliable public transport.
This round was led by 1818 Venture Capital alongside Conduit Connect, Low Carbon Innovation Fund, several angels including the founders of Allplants and OLIO as well as past investors Seedrs and Ascension. The funding will support continued hiring, particularly in product management and engineering, as RideTandem further builds its team.
This funding follows the startup’s sturdy commercial success having achieved two consecutive years of 10x YoY growth, EBITDA profitability in Q4 2021 & £1.25M revenue in 2021. RideTandem has now raised £2.6M in total, including grants from the European Space Agency and the Department for Transport.
An impact-focused startup
RideTandem was cofounded in 2019 by Alex Shapland-Howes, a previous MD of education charity Future First alongside former Global Innovation Fund investment director Tatseng Chiam and previous Hireup CTO Huw McLeod. The trio met through the impact-focused venture builder programme Zinc, as part of a team examining means of supporting communities underserved by globalisation and automation.
Co-founder and CEO Alex Shapland-Howes further explained, “We met some fathers in a small town outside Rochdale. Hearing their experience of transport poverty – they were looking for work, there were opportunities just a 15-minute drive away, but they couldn’t drive and there was no viable way to get there by public transport – was mind-blowing.”
RideTandem’s CEO further reflected on the UK Government’s “Levelling Up” agenda which aims at raising the standard of public transport connectivity across the UK significantly closer to London’s, adding, “Many jobs outside cities are only reliably accessible by car or taxi. Half of the lowest-earning 20% don’t own a vehicle and can’t afford to commute by cab, so rely on public transport. But almost 5,000 bus routes, more than one in four, have been axed since 2012 – and, outside cities and larger towns, services that remain are often prohibitively expensive, infrequent, and unreliable, affecting people’s job prospects and social mobility. Despite recent pledges, we’ve not seen the investment from the Government that would be necessary to solve this across the country, so models like RideTandem’s can play a crucial part in the local transport mix.”
How RideTandem works
RideTandem works with local cabs, minicabs and coach companies alongside employers to provide shared commuter services for low-income workers in areas with poor public transport connectivity outside major towns and cities. Such workers can now get jobs they were previously cut off from by the cost, inconvenience or complete lack of public transport options.
RideTandem’s sustainable model is built on employers subsidising fares as an investment in broadening their talent pool with some even covering the entire cost, providing free transport as an employee benefit. Employers also underwrite the risk of routes not breaking even for as little as £500 per route per month. Employers can also get a real-time view of passenger numbers, gaining insight into potential staffing issues.
Transport providers who are mostly independent local businesses gain a new reliable revenue stream, with many guaranteeing capacity in exchange for convenience. RideTandem has built a proprietary dispatch system which includes driver & fleet management aspects. It provides an app for drivers, also working flexibly with transport partners, developing bespoke integrations with their existing systems thus making working with RideTandem as easy as possible. RideTandem also supports digital ticketing and provides customer service.
Passengers use a mobile app designed to make block-booking easy with flexible payment options. These features were in the past missing in most ride-hailing and mobility apps but are critical for low-income workers. Live location tracking is also possible via the app. RideTandem operates both seasonal and year-round routes, linking workers with jobs they would otherwise have had no feasible way of getting to.
With the average passenger riding 20 or more times a month, RideTandem is generating higher and more consistent recurring income per rider than most ride-hailing apps. The startup recently reached £10M in new earnings created for passengers, with £6.5M generated in 2021 alone. Its revenue has grown 10x in two consecutive years, achieving EBITDA profitability in Q4 2021 on £1.25M yearly revenue.
Trips on RideTandem presently create an annualised CO2 offset of 1,000 metric tonnes versus similar journeys made by cars. The average RideTandem vehicle transports at least 14 passengers at 70% capacity as opposed to 1.16 for the average commuter car. Employers can also purchase carbon credits via RideTandem to offset emissions from their workers’ commutes. Some of RideTandem’s customers include Royal Mail, Primark, Transport for West Midlands and several top UK staffing agencies.
“Transport poverty is one of the most underappreciated social justice issues, and the RideTandem team has achieved a remarkable impact in such a short time utilising innovative technology,” said Mark Smith, a partner at 1818 Venture Capital. “We look forward to supporting RideTandem as they continue to grow the business and change lives across the UK and beyond.”