The gig economy is often lauded for its convenience, but its foundation has long been criticized for undervaluing the very individuals who make it possible: the drivers. Enter Fare Co-op, a trailblazing platform that’s rewriting the rules of ride-hailing and delivery services with its hybrid corporate-cooperative model. Unlike traditional platforms, Fare Co-op empowers drivers by giving them up to 90% of the fare (after expenses), while customers save an average of 20% on rides. What truly sets Fare apart, however, is its majority driver-owned structure, which provides equity that grows as the platform scales, offering drivers a financial stake in their futures.
Beyond competitive earnings, Fare’s model paves the way for ethical innovation. Drivers are not just workers but co-owners who can vote on local policies, set rates, and even invest in autonomous vehicles to secure financial stability in the age of automation. Customers, too, benefit from personalized services, such as favoriting their preferred drivers, while both riders and drivers can earn residual income through Fare’s unique referral program.
The newly appointed CEO of Fare Co-op and Local Driver Co-op Federation, Ivan Olivio, shared how the platform navigates the challenges of entering a market dominated by giants, differentiates itself to attract drivers and riders, and remains at the forefront of fair labor practices and innovation.
Fare is pioneering a unique hybrid corporate-cooperative model in the ride-hailing and delivery industry. Can you explain how this structure benefits both drivers and customers compared to traditional platforms?
Fare’s hybrid corporate-cooperative model gives drivers up to 90% of the fare (after insurance, tax, and credit card processing fees) versus the 25-35% on platforms like Uber. It also saves customers up to 20% on average on fares. In addition, Fare is a majority driver-owned platform, giving equity to the drivers that grow over time as the platform keeps growing and achieving new milestones, which, according to our master plan, will allow these drivers to have a piece of equity significant enough to finance a driverless vehicle that will drive for them, rather than being replaced by one (as what’s happening now with Waymo and Uber), retire, or use it for something else.
Among other features, Fare drivers can also build clientele by being marked as favorites by their customers, so these drivers can get rides from their customers first. Last but not least, both drivers and customers earn residual income through our referral program, which pays them up to 25% of the Federation’s net earnings.
With major ride-hailing companies dominating the market, what challenges did Fare face in entering the space, and how are you differentiating yourselves to attract drivers and riders alike?
Fare stands out by making drivers co-owners, leading to better service and higher earnings. Outside of the high costs of entry, such as insurance and licensing, which were paid in part through the shares bought by our member-owners, the challenge was spreading awareness about our California launch. This offers an alternative where both drivers and customers benefit, which has led to many positive reviews and organic growth through word of mouth with our drivers telling their passengers about Fare, similar to how Lyft came out of the backseat of Uber with drivers telling their passengers to download the app.
Sustainability and fair labor practices are hot topics in the gig economy. How does Fare ensure the ethical treatment of drivers while maintaining competitive pricing for customers?
Fare ensures fair labor practices by making drivers co-owners with a voice, allowing them to vote on policies on the local city/county level, as well as decide on the local rates to the customers, ensuring we are always competitively priced versus the major apps. By setting up local co-ops in each area (LA County, Bay Area, Sacramento, etc.) with their own leadership that gets voted on every year by the local members, our drivers are given all the tools to self-govern and grow the business as their own.
Technology plays a huge role in ride-hailing and delivery services. What innovations have Fare implemented to enhance user experience and improve operational efficiency?
Fare continuously updates the apps to improve user experience and efficiency, including features like the ability for customers to choose their favorite drivers for a more personalized service, a referral program that creates a lifetime residual stream of income for drivers, riders, and businesses where they help grow the platform using a unique referral code, and more. By constantly listening to our members and implementing features that they ask for, as well as monitoring current market trends and innovations, we make sure to keep ahead of the curve when it comes to innovations.
Looking ahead, what are Fare’s expansion plans, and how do you see the future of ride-hailing evolving with cooperative business models gaining traction?
Fare plans to expand across the U.S., starting with California, then internationally. We are preparing drivers for the future with options to invest in autonomous vehicles through their co-op shares, setting them up for financial success, and with more and more driverless vehicles on the road, our hybrid model secures the future of these drivers in the age of automation and AI.
Similarly to VISA’s hybrid model that resulted in the largest IPO in America in 2008, our plan is to grow the value of our shares for the next 1-2 years, at which point we will take the corporate piece (representing 20% of the business) public, putting enough money in the hands of our drivers to be able to finance the driverless vehicles that will replace them, should they choose to stop driving.
