New York-based Revel is set to lay off over 1,000 drivers from its ride-hailing service, transitioning them from salaried employees to independent contractors. The move is part of a strategic pivot for the company, which has undergone several transformations since its 2018 launch as a dockless e-moped sharing service. Revel’s decision follows a successful pilot program that tested the gig worker model with a subset of its driver base, responding to increasing feedback from both current drivers and potential recruits who sought greater flexibility.
A Shift in Business Strategy
Revel’s transition to a gig worker model comes after the company discontinued its moped-sharing business in 2023. Since then, the company has been exploring various business models, including operating electric vehicle (EV) charging stations and launching an all-Tesla ride-hail service. Initially, the ride-hail service employed drivers to ensure steady utilization of its charging infrastructure. However, recruitment challenges and drivers’ desire for more flexible working conditions have driven this latest change.
Haley Rubinson, Revel’s vice president of corporate affairs, explained that the pilot program launched in February showed positive results, with most participating drivers recommending the new model. Despite initial reluctance from drivers to manage their own vehicles and expenses, Revel found that the appeal of flexible working hours outweighed these concerns. As a result, Revel will allow its current salaried drivers to continue working as independent contractors starting September 12.
The Debate Over Flexibility
The shift in Revel’s employment model touches on a broader industry debate over the classification of ride-hail drivers. Companies like Uber and Lyft have long argued that their drivers prefer the flexibility of gig work over the stability of salaried positions. Revel’s decision could bolster these claims, providing a case where drivers actively preferred the gig model.
However, this change does not come without its challenges. Revel’s drivers will now have the option to rent Teslas from the company at a rate of $10 per hour, inclusive of insurance, maintenance, and charging costs. This approach aims to offer a middle ground, combining some elements of support typically associated with employment while maintaining the independence of gig work.
Expansion Plans and Financial Health
Despite these internal changes, Revel is optimistic about its future. The company has seen over 2.5 million rides with its fleet of 550 Teslas and aims to expand its fleet by allowing independent drivers with their own EVs to join the platform in 2025. This asset-light strategy is expected to improve customer wait times and increase service availability.
Revel’s ride-hail service recently achieved gross margin positivity and is on track to be EBITDA positive by the end of the year. This financial health is crucial as Revel continues to invest in its long-term goal of expanding its EV charging infrastructure. Currently, Revel operates three charging hubs in New York City, with plans to open several more, including one near LaGuardia Airport and another in the Bronx.
Investor Perspective and Future Outlook
Revel has raised approximately $214 million in funding from investors like BlackRock, Toyota Ventures, and Maniv Mobility. Although TechCrunch reached out to these backers for their views on Revel’s latest shift, responses were not received in time for this report. Nevertheless, the transition to a gig worker model and the expansion of charging infrastructure indicate a strategic focus on scalability and sustainability.
From my perspective, Revel’s move to a gig worker model reflects a broader trend in the ride-hailing industry towards flexibility and cost-efficiency. While this shift may provide immediate recruitment benefits, it also poses long-term questions about worker rights and job security. As the industry evolves, it will be essential to balance these competing interests to ensure a sustainable and fair employment model for all stakeholders.
In conclusion, Revel’s strategic pivot underscores the dynamic nature of the ride-hailing and EV charging industries. By responding to driver feedback and market demands, Revel aims to position itself as a leader in both sectors, providing flexible work opportunities while expanding its critical infrastructure. As the company navigates this transition, its success will likely depend on its ability to adapt to the changing landscape and maintain a focus on both profitability and social responsibility.
