Russ: Hi I’m Russ Capper and this is BusinessMakers USA, brought to you by Insperity, inspiring business performance. Coming to you today from Durham, North Carolina where I’m pleased to have as my guest Doug Kaufman, CEO of TransLoc. Doug welcome to the show.
Doug: Thank you, it’s great to be here.
Russ: Tell us about TransLoc.
Doug: At TransLoc we create and provide technology that empowers transit agencies to deliver on demand transportation; basically you push a button and a public transit vehicle comes to pick you up. We call that Micro Transit. As a next step what we do is we combine all the different modes of transportation from on demand vehicles to fixed route buses to Uber, Lyft, bike share, car share, you name it, and we make them all work seamlessly together to just create a great rider experience.
Russ: And as I understand it the company was privately owned until just recently, share that with us.
Doug: So the company was founded in 2004. We raised a round of capital just in 2016, we were bootstrapped until that time, and then January of this year we were acquired by Ford Smart Mobility.
Russ: Well that explains why there’s Ford Motor Company logos all over your website too.
Doug: Absolutely, plus we’re just big fans of Ford.
Russ: Okay. There you go, I bet. So as I know it too I guess this A round came along because you sort of shifted in strategy, and we’ll get to that in a minute too, but let’s talk a little bit about mass transportation and having these micro groups in the middle of it; how does that actually work?
Doug: Public transit agencies have used smaller vehicles, whether they’re station wagons or 14 passenger vehicles, for quite some time. Typically though they have used them for what’s called Paratransit; so if you are elderly or unable to drive you pick up a phone, you call the public transit agency, and they will schedule a ride for you. Typically there’s about one person on a 14 passenger vehicle at all times so it’s not very efficient, it costs a lot of money, it’s a great service but we knew it could be improved. So finding a way to use those assets, those vehicles that are already on the road to get more people on them doing other types of service, not just paratransit service, was really the heart of what we were after. Really optimizing and making them more efficient.
Russ: Okay. Your customers nowadays are these large, transit authorities in these cities right?
Russ: How amenable are they to listen to your story these day?
Doug: These days very amenable. They are excited about this, they really want to talk. 5 years ago not so much but times have really changed. And honestly we couldn’t have gotten acquired and joined Ford at a better time because we could not keep up with the demand that we were seeing specifically for micro transit. And I think really the key difference is that transit agencies now, because of what they’ve seen with Uber and Lyft and how providing a user centric experience is what people want, they’re willing to experiment. And we’re doing pilot tests with them and we provide them services to let them kind of de-risk the service. So they’re willing to dip their toe in, test it out, they like what they see, move to the full deployment.
Russ: Describe one of these pilots.
Doug: Our pilots are really interesting because we’ve developed a tool internally called the micro transit simulator. And what it does is it allows us to put all sorts of data in it from census data to ridership data and to basically answer the questions for the agency before they put vehicles on the street. For example they may come to us and say hey, we have an underperforming route, could we replace it with an on-demand zone? And we can show them exactly what it will look like with two vehicles, three vehicle; if they run from 8:00 in the morning to 8:00pm or 9:00am to 9:00pm. They get to see all the answers and they can pick exactly what they want to do to solve the problem they have. Then they get to test it out for a few months and if the results match what the simulator said, if it’s on the right track, if they’re happy with the results they’re getting, then they can move to a full deployment.
Russ: Now when you mention that you have this area and we’re going to do a test on where there were two or three vehicles, and you were saying on demand, so these would be two or three vehicles that would be in this underperforming area, that would be there strictly in that area, strictly for people that said I need a ride somewhere and hit a mobile app?
Doug: That’s right, and now here’s what’s – it probably sounds a lot like Uber or Lyft but here’s a key differentiator; the way we’re doing this is we want to optimize service so that a vehicle isn’t driving around waiting for someone to press a button saying come and get me. Vehicles are only dispatched when a rider says I need a ride right now. Then a vehicle can go and it’s very dynamic, so as other riders are saying I also need a ride it’s constantly shifting to make sure it picks up the right people along the right paths and provides great service.
Russ: So in the perfect world, in the future, everybody signs up with TransLoc and how will it work? Will there still be bus routes?
Doug: So the future is going to be interesting now that we’re part of Ford Smart Mobility. We can certainly say that vision we’ve always had is that we believe there is a place for fixed routes in the future, but the way they exist today is the same way they’ve existed for 100 years and it needs to change. So trunk lines, these really high capacity lines where there are tons of people using them and they’re very efficient, we see that they should stick around. But these underperforming routes or other areas where fixed route just isn’t the ideal situation, other services like on demand vehicles should take the place.
Russ: Wow, interesting because it seems to me like it’s almost competitive to some of the promotions that I’ve heard from the Ubers and Lyfts of the world, hey you don’t need your car anymore, you can just deal with us all the time. You could do that in your plan too, perhaps even less expensive than just riding an Uber everywhere.
Doug: It would be significantly less expensive. That is the plan is that it should be cheaper when you ride public transit than to be in a private vehicle. And let’s not forget, as much as I love Uber and Lyft – I was just in a Lyft the other day – is that we’ve seen in areas where they are like New York and L.A. that traffic has actually gone up. Congestion has gone up because they’re still single occupancy vehicles. I was in a Lyft by myself, drive rand me, so we’re not getting cars off the road so the congestion is just getting worse. It doesn’t provide access to people that need it the most, this is a way to get there.
Russ: Interesting. So in your description right in the very beginning of this interview you kind of got into the on demand world but were including all sorts of people like Uber and Lyft.
Russ: Could they conceivably be part of the TransLoc plan?
Doug: Absolutely. In fact we had a partnership with Uber – a formal partnership with them – all the way back at the end of 2015, the beginning of 2016, because we wanted to with them, in partnership with them and the transit agencies, demonstrate that we could actually connect walking, buses, trains and Uber and make it work seamlessly. When I say seamlessly I mean you as a rider press a button once the hailing of the Uber, the payment for the bus, the payment for the Uber should all happen automatically behind the scenes without you doing anything else. So we see a world where all of these services come together and you as a rider don’t say send me a Lyft, send me a public transit vehicle. You just say what’s the best way to get there, press one button and you go.
Russ: When I asked you what your perfect vision for the future was you kind of hedged and said well kind of this but now we’re part of Ford, so what do you think Ford’s vision is? DO you think it’s slightly different than yours?
Doug: It’s very, very aligned. It’s one of the most exciting parts about becoming part of Ford Smart Mobility. In fact Jim Hackett, if you saw at CES, recently gave a Keynote where he described the vision of not just helping people move around with more freedom, but taking the streets of the cities back. Making them more livable, getting single occupancy cars off the road to provide more greenspace, more walkable space and more access for people. So the visions are very, very complementary.
Russ: Okay. So before I let you go, it’s a business show and people like to know how did this ever happen, and the company is 14 years old really and you’ve only been here like 2 or 3?
Doug: Well I came to the company in 2012 and I became CEO in 2014.
Russ: And there was an A round only in 2016.
Russ: Tell us a little bit more of the beginning and how you got here.
Doug: In the beginning the company was really founded on the idea of giving riders of transit a better experience. And at that time it really was can I just see where my bus is in real time and get an arrival prediction so I know exactly when my bus is going to show up so I don’t have to stand outside in the cold. That was the first of its kind product to show transit vehicles moving in real time and that was the product we had until 2015. At that point we said let’s start thinking bigger. What can we do to really not just give a better experience but change the way people move on a fundamental level? And that’s when we started coming up with new products including this on demand product.
Russ: And that called for the A round too.
Doug: That’s right. We knew if we really wanted to change transportation on a global scale we couldn’t do it as a 35 person bootstrapped company, we needed to bring some outside capital and really expand the team, and that’s what we did in 2016.
Russ: And I understand that first early stage one was mostly university-based, university transportation systems right?
Doug: Yes. That’s right, it was almost exclusively universities until 2014 when we said we’re going to have big impact, we need to start moving to the municipal public transit space. We didn’t have expertise in that area so we really needed to start bringing in some people that had those expertise and create a real roadmap to get where we are and where we’re going.
Russ: And how many people are here now?
Doug: Right now 75, we have quite a few job openings right now so we’re expanding a little bit.
Russ: Great, well it sounds real exciting. Congratulations and thank you for telling your story.
Doug: Thank you. I appreciate it and thanks for asking me.
Russ: You bet, absolutely. And that wraps up my discussion with Doug Kauffman, the CEO of TransLoc and this is BusinessMakers USA.
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