A lot of the conversation today about on-demand transportation is focused on how new players like Uber and Lyft are rapidly expanding and disrupting the established transportation market (alongside whether they have been overvalued and overplayed in their rapid ascent), but today comes news about how one of those newer players is teaming up with a legacy transportation business as a route to growth.
Gett, the on-demand ride startup backed by Volkswagen, has partnered with Carey International, a chauffeur and logistics business, to provide services for each other's respective customers on an integrated platform aimed at business travellers.
Dave Waiser, Gett's CEO and co-founder, confirmed to TechCrunch that there are no financial investments as part of this deal but he said that the two will get cut (of an unspecified percentage) on intra-network rides.
The deal brings together technology and reach, and, respectively, the new guard of transportation-on-demand with the old: Gett will be providing a platform to run the integrated business, while Carey (which has now been in business for nearly 100 years) will be bringing the geographic footprint to the partnership.
The partnership, Gett and Carey said, will see the two building a single platform that will be able to operate multiple services and functions across the two companies: sales, reporting of rides and technology.
The deal is significant for a few reasons. First and possibly foremost, it's a sign of how smaller players may be looking to partner more (or be open for acquisition) as they look for more efficient ways to compete against the well-capitalised, very tech-savvy behemoths in their markets.
For Gett, it will expand the company's operations to a much wider base. Today, Gett is active in just under 50 cities in four countries (and only one city in the U.S., New York), but the deal will see that number grow to 1,000 cities globally, including 100 more in the U.S. and the EU.
"Our business and enterprise clients have been looking for high level and high quality roaming across multiple cities," Waiser said in an interview.
It's an important, if lower margin way, to expand the business that to date has either grown organically or by acquisition: earlier this year, Gett acquired rival Juno to bulk up its business in New York and compete better against Lyft and Uber.
There may be more of those, but also likely more partnerships of this kind.
"I think we are always looking on case-by-case basis," Waiser said of the Juno acqusition. "Last year we did three acquisitions, but we are also open to partnerships. In the case of Carey, we have an amazing partner and footprint that suits our clientele, so it's a partnership in this case."
On the part of Carey, this is a way of leapfrogging a legacy company into a more modern state of affairs.
Today's business travellers expect to be able to book cars using apps and receive updates and other data about those cars after they are ordered. They also demand more flexibility in how they can pay for those rides and integrate those bills with the rest of their travel expenses.
To build this from the ground up would be a major IT undertaking for Carey; using Gett's platform and tech expertise is a faster and cheaper route to get to the same destination.
“Working together with Gett represents a major step in fortifying Carey International’s strategy to provide more ways for business travelers to use our services, and will, hopefully, inspire other ground transportation providers to work together for the benefit of managed travel programs,” said Gary L. Kessler, President and CEO of Carey International, said in a statement.
“This partnership will allow Carey International and Gett to offer solutions for more traveler use occasions in more places than ever before, and, ultimately, will provide managed travel programs with a single platform from which to manage the majority of their ground transportation needs.”
Interestingly, this seems on the surface very similar to the tech and ride partnership that we heard about back in 2015 between Uber competitors Ola, Didi, Lyft and Grab: the idea of that service was to provide a seamless experience to travellers, so that if you went to a market where, say, Lyft didn't operate but Ola did, you would still be able to use your Lyft app and continue your customer experience. But we've heard very little about that partnership in the wake of it being announced.
- This article originally appeared on TechCrunch.