Clearly a man who isn’t discouraged by capital – the co-founders pooled personal funds into the venture – he reveals that profit margins have been put on hold. Perhaps this is unsurprising for an upstarter who has spent the past 12 months developing an environmentally conscious social transport platform.
London-based Funryde has been ferrying passengers from Big Ben to Brixton. It is in the business of ride-sharing – where car-drivers can pick-up passengers who are going in a similar direction and earn a quick buck on the side. So far it has plugged 2,000 downloads, which is comparatively minute to London’s mammoth population. But the fledgling founders are ambitious.
“Is the ridesharing model disruptive? Perhaps it is, but such are most inventions of real value. It is those very disruptions and innovations that keep advancing the way we live,” says Ammar Halabi, Funryde’s CEO. Ammar and Bassem will hope to join the ranks of promising taxi-app upstarts including Uber, Hailo and GrabTaxi, the latter also founded by MBA graduates.
But first up they must bring home the bacon. Funryde’s success rests solely on whether the founders can land an insurance deal to cover both their drivers and customer-passengers.
“The model won’t allow any profit until we find an insurance premium,” says Bassem, who graduated from Cass Business School in 2011. “However, we are into serious talks with insurance companies to come up with an insurance premium that covers that part of the trip,” he adds. “We want to make sure everyone is safe.”
It would mark a significant turning point for a company that Bassem co-founded with Ammar, the London Business School grad who came up with the idea, in August last year. Although the pair studied at business schools which are a stone’s throw apart, they held discussions via Skype.
In Bassem’s telling, Ammar was looking for a technical lead for his fledgling firm, and put the word out through his personal network. They clicked instantaneously, and developed a business plan to penetrate the British market.
At the time, Bassem was heading another start-up, software solutions company uTouch, in Ottawa. Bassem may have studied in London, but he is a thoroughbred Canadian – it was where he studied his first degree and MA, in various engineering disciplines, and began a technical-based career.
It explains why the Master's graduate is the company’s technical lead. With the help of freelancers and students from Imperial College and City University, Cass’ bass, he developed the smartphone app. “I have really good experience with programming,” says Bassem.
Critics might suggest that Funryde has not come far enough in a year – a couple of thousand downloads is nothing to rave about. There are also further complications; the niche market is crowded. Established companies including Sidecar and Lyft base their services on ride-sharing. Uber, the taxi-app market leader, also offers ride-sharing. To make matters worse, ride-sharing has been deemed illegal in some US cities.
Bassem’s riposte is that download figures are not the most important piece of the puzzle. “You can have two-million downloads but if there are not enough people to engage with it, it doesn’t mean anything,” he says, matter-of-factly. There were earlier complications with the app, he says, and since launching in February they have had “more than anticipated downloads”.
It is also worth pointing out that Funryde is still in its soft-launch. The founders will no doubt expect a bigger slice of the market once the trial stage is over.
It is too early to make a call on whether Funryde can achieve this, but one thing is clear: they have received plenty of backing. In just a year, the start-up has already received the Deloitte Institute of Innovation and Entrepreneurship Founders Award. Funryde is sponsored by UK Trade and Investment, a government-funded support vehicle for SMEs, and have landed a spot on LBS' incubator. The rest of the cash came from the founders’ own pockets.
The business is advertising seven new job positions, including chief of marketing, and accepts volunteers.
It has a standardised algorithm that determines the estimated costs of a journey – factoring in distance, time of day, and so on – and the app suggests a price that a rider pays at the end of a journey. “On average it’s less than a pound a mile,” says Bassem. Users have the option to increase or decrease that amount on their smartphones.
Bassem says that this service is 60%-70% cheaper than using one of London’s famous black cabs. The company plans to take a cut of whatever price a user pays their driver, all being well.
The problem they face now is first convincing average Joe’s to sign-up as drivers, and then convincing potential passengers to hop into cars with strangers. “We are raising awareness that not anyone can be a driver,” says Bassem.
Indeed, they have to pass a registration process, and provide documents including a driver’s license. The company then runs a check of their driving records, as well as a security check and a background check, says Bassem. Once they begin driving, they are given ratings by users which are displayed on their profiles, as well as a profile picture.
One of their main ambitions is to reduce the amount of cars on the road. Funryde also runs a second service, a carbon reduction initiative, for private networks.
The start-up is located in Tech City – a cluster of technology SMEs in East London – which is an “amazing” experience. “It made a lot of difference – the amount of learning we get from others is huge,” says Bassem.
That has seemingly been the secret to Funryde’s near-success. The biggest benefit of attending business school has been cultivating a network.
“The experience that you learn is huge – it’s like having another degree,” says Bassem. “The network is massive.” He will need to utilize every ounce of it to drive Funryde to start-up stardom.
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