Traveling in Style on the Cheap via an Israeli Company

New Yorkers love the Via taxi service but nobody gets how it can survive with rides costing just $5. The company says its business model is just fine.

A Via ride in the big city can feel like a kibbutz on wheels.
Courtesy of Via

I have learned to love the Via taxi service in recent months. Through this friendly app, one can order a shared taxi, usually a fancy car, which shows up within minutes. Moreover, there’s something different about riding with Via – conversations that develop with the driver or other passengers. It can feel like a kibbutz on wheels, which is definitely a change in the big city. Some say they’ve gotten dates out of it.

It took me a while to learn that the people behind Via are Israeli expats living in the United States. Their whole idea was to bring an advanced version of the Israeli sherut – shared intercity taxis – to the Big Apple. They added algorithms that make the whole thing of sheruts much cleverer and efficient. Thus, within two years of operation, the company handles 20,000 trips a day (compared to about half a million passengers using New York’s yellow cabs).

New York’s taxi market is pretty nuts. Ostensibly, the market seems saturated. The city has 13,500 yellow cabs plus green taxis serving the boroughs outside Manhattan, there are town car services and somewhat less fancy options. That didn’t stop newcomer taxi services from taking the city by storm.

The revolution began with Uber: More than 14,000 drivers use that platform. Even GETT (another Israeli company) and Lyft entered the fray. Then came Via.

Uber is the biggest and is considered excellent. Its cars are good, new and comfortable. It’s great fun in Los Angeles, where a lot of the drivers are aspiring young actors, which can make the ride quite fun. In New York the taxi drivers are somewhat less entertaining. But the problem with Uber is that at rush hour, or on rainy days, its cost climbs. I don’t like that. I only use Uber when I really badly need its service.

I’m sure Gett’s service is also perfectly fine. The problem, as far as I’m concerned, was that when I tried to order a taxi through Gett, I waited too long, in my opinion, and gave up. I took a yellow cab or whatever.

The truth is there’s something very attractive about Gett and its offer of service to anywhere in Manhattan for $10. But when I once ordered a taxi to Soho, when I arrived the driver demanded $20. I emailed the company and it turned out I’d neglected to press the “Bargain” button to pay the special price. Ok, my bad luck.

If you’re in a rush

Why do they love Via over here? Firstly – price: $5 per ride is unbelievable when the average ride starts at double that. One big downside is that you might get picked up or dropped off up to a couple of blocks from your point of convenience. But in most cases you start, and wind up, closer.

There are other disadvantages. The service is limited to Manhattan, below 110th Street and from 6:30 in the morning until midnight. Other taxis operate 24/7 and don’t get fussy about the map.

The drivers also love Via. They get paid by the hour, whether or not they have passengers, which is in contrast to Uber. They get $25-30 per hour during rush hour, which drops to $20 when the rush quiets down. Moreover, with Uber the drivers pay 35 percent of their income to the company; with Via, they only pay 10 percent.

I sense that the Via drivers like their customers better than regular taxi drivers or Uber drivers do. Having chatted with drivers from Uber and Via, they say the Uber customers tend to be more stressed about reaching their destination. But anybody ordering Via knows the car service is closer, will make several stops and will let you off near, but not necessarily at, the destination. If you’re in a rush, Via may not be the service for you. Based on my personal experience, the morning hours are worst for Via; the wait can run 15 minutes, which is a lot in New York terms.

We meet with Ori Klein, Via’s finance officer, at the company’s spacious new offices in SoHo that used to be a fashion showroom. It’s surprisingly quiet. “In Israel the office would be noisier,” Klein smiles.

Via's Uri Klein.
Courtesy of Via

Not brain science

The company has 80 workers, of whom half work at R&D in Tel Aviv, 35 work in New York and five moved to Chicago to set up shop there too.

Where’s the money from?

“Altogether we raised about $38 million when the help of [venture capital funds] like Pitango and 83North,” says Klein.

Via was founded by two people, Daniel Ramot, CEO, and Oran Shoval, head of the technology division in Israel. Ramot did a doctorate in brain science and Shoval did his doctorate in biological systems, says Klein. Later Shoval worked at McKinsey. He himself, says Klein, worked at the Prime Minister’s Office and holds an MBA.

Each day between 500 to 1,000 drivers ply the streets of New York for Via. “We began two years ago on the Upper East Side and gradually expanded,” says Klein. “At first we charged $4, then $5 and now it’s $7. But if you buy a package of journeys in advance, you pay only $5 [per trip]. At night the price rises to $7.95.”

Those are very low prices by local standards, and I just got back from a special bargain Via trip that cost me a mere $1. Don’t tell me that doesn’t pay. Passengers and drivers I talked with say Via’s prices are very tempting, even crazy. They’re surely not making money from this, people keep telling me.

They’re doing fine, Klein reassures: “Our business model is working. We make money from taxis carrying four to six people. Sometimes, mainly during rush hour, the driver may do two runs inside an hour. I know the figures and they are definitely working. We aren’t profitable right now but the model is profitable. If we wanted to be profitable [at this stage], we’d have to focus on Manhattan and stop expanding. When we expand, naturally, costs rise.”

Everybody figures it’s just a matter of time before Via raises prices, I tell him. “Not necessarily,” Klein answers. “Like I said, the business model works and we want the trip price to be the same for all passengers.”

And the business model is? They essentially created a virtual bus stop, Klein explains. The system sends taxis to high-demand areas, like Madison Square Garden after a game. “We’re like a combined electronic control tower and customer service on steroids. Our drivers are subcontractors who get paid by the hour. A driver can make something like $1,500 [a week]. The drivers own the cars they work in, or lease them.”

Most of the Via cars are huge passenger vehicles like SUVs, e.g. the Yukon or the Expedition. They’re rich men’s cars in America; but now ordinary folk can ride them too. So why doesn’t Via operate in Israel?

They wanted to get into a big market like New York, despite its complicated regulation, Klein answers: “We figure that if it works here, it will work anywhere. Maybe we’ll get into Israel in the future. Right now there are no concrete plans.”