New York-based Revel has made a variety of changes since it launched in 2018 as a dockless e-moped sharing service. The BlackRock-backed startup briefly entered the electric bike subscription market. It has launched and currently operates several electric vehicle charging stations in five communes. It also launched a Tesla-only and all-employee passenger transportation service, in part to make sure guaranteed use of its charging infrastructure.
After ceasing its moped-sharing business in 2023, Revel is again deciding to desert one of the foremost things that made its ride-hailing service unique: The startup is laying off greater than 1,000 drivers and adopting a salaried worker model much like that used by rivals Lyft and Uber.
The move comes after Revel successfully piloted the model in late February with 100 Revel drivers and has since hired one other 100.
“The reason we even launched this pilot program was to increase feedback from our driver pool as well as our recruiting efforts,” Haley Rubinson, vp of corporate affairs at Revel, told TechCrunch. “The main reason people didn’t want to join Revel was the lack of flexibility.”
Rubinson, who was Revel’s first worker, said drivers were initially drawn to the platform because they didn’t need to deal with the hassle of owning or renting their very own vehicles, purchasing insurance and managing their very own expenses. Drivers also told TechCrunch that filing 1099 tax returns can be frustrating. But now, Rubinson says, Revel is having trouble recruiting drivers to its platform.
“We have to respond to what the industry is telling us,” Rubinson said.
In an email sent to employees that TechCrunch reviewed and Bloomberg As first reported, Keith Williams, vp of ridesharing, said 4 of 5 drivers who piloted the gig employee model would recommend the program.
The issue of flexibility has been at the center of the debate over whether passenger transport drivers should be classified as contract employees or employees. If salaried employees are, in fact, asking to be converted to contractors, Revel’s change could lend credence to Uber and Lyft’s arguments as corporations fight across the country to keep up their current salaried employee models.
“Now there’s really an opportunity to support more rental vehicles in the city,” Rubinson said.
Current drivers employed by Revel will have the choice to remain with the company as independent contractors after September 12, when the change goes into effect. Drivers can join to rent from Revel’s Tesla fleet for $10 an hour, which incorporates liability insurance, vehicle cleansing and maintenance, and a full day of battery charging.
In 2025, Revel will make the platform available to drivers who own electric vehicles, providing the startup with a cost-effective option to grow its business and provide a higher service to passengers. Revel has accomplished over 2.5 million trips in its fleet of 550 Teslas, but for such a small fleet, customer wait times have been an issue. Especially in comparison with Uber and Lyft, which the corporations say have a total of over 100,000 drivers in New York.
That said, Rubinson says the passenger transportation portion of Revel’s business recently achieved positive gross margin and was expected to be EBITDA positive by the end of the 12 months.
The increased fleet could also help Revel with its real long-term bet – electric vehicle charging infrastructure. In 2022, Frank Reig, Revel’s CEO, told TechCrunch that greater than 90% of the charging center’s usage comes from Revel’s own transportation fleet. That number has increased to about 50% as electric vehicles have grown in popularity, in accordance with Robert Familiar, senior manager of corporate affairs at Revel.
Revel has three energetic EV charging hubs in New York – two in Brooklyn (Bed Stuy and South Williamsburg) and one in Long Island City, Queens. The startup plans to launch one other hub this summer at Pier 36 in Lower Manhattan, just off FDR Drive, a highway that runs along the East River. Rubinson said Revel also plans to launch three more: one near LaGuardia Airport; one other in Maspeth, Queens, will be the largest facility with 60 plugs; and one other in the Bronx.
In addition to New York, Revel is eyeing San Francisco and Los Angeles.
In total, Revel has raised roughly $214 million since its launch, in accordance with Crunchbase data. TechCrunch reached out to backers BlackRock, Toyota Ventures and Maniv to learn how investors feel about the startup’s latest move, but have not received any past updates.