You can learn a lot about people driving for Lyft.
And when you are in charge of those drivers, you can learn enough to start a whole new business.
That experience earned Miami-based Vendy the win in the Travel / Tourism / Hospitality vertical in the 2019 Miami Herald Startup Pitch Competition’s Community Track.
In 2016, Salomon Horowitz, a Venezuela native, was placed in charge of Lyft’s Florida operations. A University of Florida grad and engineer by trade, Horowitz had been working at American Express when he got the call. He said he could not pass up the opportunity to work in Miami, where he would be closer to his Latin roots.
His shift to Miami coincided with the massive wave of Venezuelans fleeing chaos in their home country. Many needed jobs — and Lyft was an easy starting point.
Horowitz quickly realized that there were now too many drivers compared with passenger demand, especially in Miami. Driver earnings, Horowitz said, were close to minimum wage for a 40-hour week, even though many drivers were working up to 60 hours a week.
“It broke my heart,” he said. “What they would find is that they would be working the entire day, or the entire week, and end up barely able to pay their bills. Even the savvier ones would end up losing money.”
Thanks to his Lyft position, Horowitz knew that passengers are in the car for an average of 23 minutes. “That makes them an extremely valuable captive audience,” he said.
And he recognized that brands constantly seek new channels to reach consumers — especially companies selling consumer packaged goods.
If he could monetize a micro-shopping experience to benefit drivers, everyone would win.
His prototype was as simple as it gets: a box from the Container Store and some small convenience-store items. He used gig-work site Upwork to hire developers to build a payment app.
To further his research, Horowitz began driving himself. He noticed that typically, the passenger would start a conversation — an interaction that usually leads to a higher rating and better tip, he said.
Horowitz remembers the ride when he realized he had more than just an idea, but a viable business: A woman came in with a headache, and he offered her some Advil.
“After that, we were just having a great conversation,” Horowitz said. “And when I dropped her off, she said she had totally forgotten about her headache. It really was a validating moment, that this could be a potential business. It was the inflection point, from an emotional perspective.”
He continued his driving research once every two weeks. About a year ago, he decided he needed to work on the project, now called Vendy, full time, “not only because we needed to conceptualize and develop the product and hardware, but we also needed to create relationships with potential partners,” he said.
Vendy works like this: If a passenger wants to buy something from the box, he downloads the VendyNow app and gets a code that allows the driver to open the box; payment is transferred online. For each purchase, the driver gets $1. Though that may not seem like much, it can mean a sizeable bump on the average fare of $8 or less. In a month, that could mean $100 extra for the driver, according to Horowitz’s estimates. Vendy gets 50 percent of every sale.
“In Miami, many drivers are making less than in other markets,” he said. “Vendy could be a critical additional source of income, which means we’re accomplishing our mission to help them.”
Brands already on board include Awsum Snacks and No B.S. skincare.
Today, there’s a decent chance you’ll catch a Vendy box if you pick up a Lyft. Horowitz said there are now a few hundred drivers on the Vendy platform, with cooperation from Lyft. While Uber is not of the question, Lyft remains the priority.
Lyft does not endorse any specific third party services in vehicles nor does it have a policy around drivers providing non-alcoholic drinks and snacks to passengers – passengers are free to decline.
Vendy has already attracted investor attention; Horowitz said the company has raised funding “in the six figures.” He currently has eight employees, five of them full time.
For Horowitz, there is an emotional component to the success.
“I really want to help fellow Venezuelans,” he said. “It’s one of the ugliest times in Venezuelan history, and we as Venezuelans need to support each other,” he said. “If I can help bring them a little more money, I will be happy.”