Jetty

Jetty is small startup with a grand goal: Creating financially viable, high-quality transit alternatives to the automobile in fiscally constrained megacities across the world. We build such alternatives from pre-existing, quasi-informal systems. Instead of displacing incumbent jitney operators, we learn what they are doing right, and change incentives so they improve their service. We introduce the pre-existing transit industry (passengers, drivers and vehicle owners) to the advantages of modern technologies. We improve their governance and administration, optimize and standardize operations, link revenues to customer satisfaction, and increase profitability. 

In Mexico City we have already proven the incumbent jitney industry can offer safer, more comfortable, more accountable rides, and that many commuters are willing to pay a premium to use their improved services. We have made it possible to identify good drivers, and to reward them for improved performance. And we are proving higher-standard transit can scale without government subsidies.

A loosely-regulated, privately-operated jitney industry delivers a massive 11.5 million passenger-trips everyday in Mexico City, employing roughly 100,000 as drivers, mechanics, supervisors, etc. Informal transit moves most workers in this megacity affordably and efficiently, but at the cost of exploiting drivers, mistreating passengers, and operating at the brink of financial failure. Jitney fares are regulated and kept dramatically low (US$0.25-0.50). But the government can't afford subsidies! To make ends meet operators resort to: weak insurance policies, rickety, under maintained and highly polluting vehicles, exploitative labour practices, and crammed, uncomfortable and dangerous rides. 

The future is not promising: Commuters increasingly "escape" to private mobility, congesting streets and depleting ridership. Drivers must work longer hours and drive more aggressively to secure a living wage. Operators see profit margins shrink. All would benefit from a new arrangement. What if drivers and operators were more responsive to passenger feedback, and incentivized to deliver higher quality service? What if passengers could identify jitneys offering better service?

This challenge is not exclusive of Mexico City. Most cities in the world lack safe, accountable, comfortable mass transit networks. Colectivos in Mexico, Matatus in Nairobi, Tuk-Tuks in Bangkok. Tech can make them more accountable, and more profitable.  

Passengers previously had to choose between expensive taxis or cars, or uncomfortable and unsafe jitneys. They used cash to board, could not be reimbursed by employers, and wasted precious time on circuitous routes. Now they benefit from improved accessibility to the districts with the best paid jobs, have realtime information on when and where to board, and know their feedback is valued. We cut their commute times, in some cases by half. They have a larger and improved choice-set to meet their commuting needs.

Jitney operators previously had to concentrate on cutting costs, and had no incentive to deliver higher quality service. They saw tech (and tech companies) with distrust. Fare skimming by drivers was significant, and onboard muggings frequent. Now they have more control, more information to make decisions, better tools to attract and retain passengers, and access to additional revenue streams.

Drivers previously had to work long hours and treat passengers poorly. Few had formal employment and health benefits. Courteous, helpful or kind drivers were seldom identified or rewarded. Turnover was high. We require partners to offer drivers formal employment with above-market salary and benefits. Now they have more job security and less stress.

Our business model is a revenue-share with transport partners. We take over most planning, marketing, customer support and driver training functions. They hire drivers and supply, maintain and operate vehicles. We develop our tech in-house, leveraging feedback from passengers, drivers and transport partners to improve our apps. Our supply-side strategy is to identify revenue-generating, service-enhancing opportunities in existing jitney routes, and to invite jitney coop leadership to try our app in a pilot. Most of our entry-level services can be supplied with their existing vehicle fleet, and some (such as guaranteed seats) work in tandem with regular operations, reducing the revenue risk they take to participate in our platform. As we demonstrate they can increase revenue and attract or retain higher paying passengers, our pilots scale.

On the demand side we rely on digital marketing and word of mouth. Passengers download our app, and search for trips by inputting their origin and desired destination. We "match" these to our nearest pickup and drop off point, and display the schedule, vehicle type and plates, photo and name of the driver, cost, and trip features. Passengers who reserve a seat obtain a digital ticket, and receive notifications alerting them of delays and vehicle location. We answer queries in real time, using our in-app chat. After the trip, passengers rate their experience and leave comments. Based on past passenger queries and schedule performance, we adjust the location of our stops (minimizing avg. walking distance to destination), the frequency of our routes, and the type of vehicle used (to match demant to seat supply). 

We have a visible presence in Mexico City, with 87 vehicles (taxis, vans and busses). >92,000 individuals have downloaded our passenger app, and we have >17,000 unique monthly users. Active users ride with us an avg. of 16 times per month. We´re gaining traction. We have sold >600,000 seats, 70,000 in the last month (June ´19). We will launch our second city in September.

We don't identify competitors sharing our commitment to transform the existing transportation industry, or to target the bottom of the pyramid. "New mobility" players operating locally, such as Uber's UberVan, displace incumbents and avoid hiring jitney drivers. Many startups (Cabify, Uber, Urbvan, Lime, Grin, etc) offer taxi and scooter trips. Unfortunately their services are expensive and concentrated in well-off districts. Jetty scales the benefits of the digital economy to a larger territory and to a much bigger demographic of passengers, operators and drivers. Other companies (eg. Viaxer) have long sold software and equipment to jitney operators, but don't get involved in their operations, share their revenue risk, or link their profitability to passenger satisfaction.

Earning the trust of the traditional industry is hard, and yet we are making significant progress. Our evolving partnership is a distinct competitive advantage, and more likely to lead to a scalable and equitable business.

Time spent on mobile devices in Mexico is among the highest in the world. Penetration of smartphones runs deep, and acceptance of digital transactions is growing rapidly. However, benefits of app-based mobility in Mexico are mostly limited to users of taxi-like services (Uber, DiDi, etc.), which are expensive and do little to ameliorate congestion. Most commuters rely on minibuses and jitneys, which barely utilize technology to increase passenger satisfaction, digitize payments, improve operational performance, or supervise and evaluate drivers.

Our technology identifies areas with unmet passenger demand, facilitates decisions to increase vehicle occupancy, and enables flexible pricing to segment passenger groups according to their preferences. It provides operators with information on vehicle, route and driver performance, and gives drivers access to passenger feedback. We have two passenger apps (iOS/Android), one driver app and one admin. From the passenger app, users insert their desired origin and destination, and are matched to nearby ride options. Users book seats from the app, and decide if they prefer an "express" service or not. Their ticket displays information on the pick-up point, the identity of the driver and the location of the vehicle. Passengers receive notifications in case of delays and can chat with our customer team. Drivers check-in each passenger, and greet them by name. After alighting, passengers provide feedback and rate their experience.

Our development pipeline includes many new features, such as allowing onboard cash payments and assigning financial bonuses to top-rated drivers. We have much to do.

Passengers are the missing agent in the planning and regulation of public transit in cities like Mexico City. They have no way to express their "voice" regarding comfort of the seats, crowding level of the bus, attitude of the driver or location of the stops. Many "exit" the system as soon as they can afford a private mobility alternative, others resign to low quality. Our tech gives voice to passengers, allowing them to actively or passively manifest preferences and express satisfaction or displeasure. And it provides a mechanism for this feedback to be assimilated and acted upon. 

Similarly, drivers and bus operators have long lacked incentives to improve performance. They charge an unsubsidized low fare, and compete with thousands of others, without a signaling tool to inform passengers they have the better seats, the fastest route or the best trained driver. Our tech fills this gap and allows suppliers of service to be rewarded for their extra efforts. 

We believe interest alignment and accountability measures enforced through Jetty makes passengers happier, operators more profitable, and the city less congested. We have strong evidence. Our largest operator (jitney organization running >40 Jetty busses) reports tripling its revenue one year after adopting our tech. They added more busses, improved seating, and recruited better drivers. More women than men use Jetty (reverse is true in jitneys). And rigurous third party research (available upon demand) found 36% of our users would have completed their last trip by car or taxi were Jetty not available.

Our passenger apps have >92,000 downloads, and >17,000 unique users purchased a ticket in the last 30 days. We sold >600,000 seats since our launch in August 2017, and are gaining traction (70,000 seats sold in June 2019). This growth is mostly limited on the supply side. Each time we add new vehicles or expand our geographical coverage, demand follows suit.  Our trip-rating average is 4.93/5 stars. Retention rates are high, with 45% of users active 26 weeks after first using Jetty. Passenger loyalty is high, with users purchasing an average of 16 seats/month.

We work with 5 different transport operators. Our largest operator grew its fleet from 18 to 44 new busses based on projected earnings made possible by Jetty. Combined, our operators have supplied 87 vehicles (taxis, vans and busses), and employed 90 drivers who passed our background check and training program (currently 1/5 applicants pass). All drivers have formal contracts, a fixed salary and benefits. Rodrigo, our top rated driver, has >15,000 five-star ratings in 7 months working with Jetty.

People served IN Mexico City

1. Today: We serve 4,000 passenger-trips per workday. 90 drivers and 87 vehicles. 
2. In one year: We will serve 40,000 passenger-trips per workday. 880 drivers and 800 vehicles. 
3. In five years: We will serve 120,000 passenger-trips per workday (1% of passenger trips completed by jitney). 2750 drivers and 2500 vehicles. 

Expansion: 

1. Today: 1 city
2. One-year: 3 cities in Mexico
3. Five-year: 25 cities internationally. (Central America, Peru are good options)

We are obsessed with measuring our growth and impact. We currently track 4 KPIs: Monthly Active Users (6.9K), Customer Acquisition Cost (USD 11), Customer Retention Rate (45%) and Lifetime Value (USD 35). All the above are only improved if our drivers offer good, friendly, professional service, and if our operators maintain well kept, clean vehicles. So an underlying, harder to quantify metric, is sustaining the engagement and commitment of our transport partners.

Our 3 main goals for next year are:
1. Reaching break even.
2. Recruiting three more jitney associations.
3. Replicating our service in another Mexican city (September this year!).

1) Navigating regulatory hurdles. Mexico City reformed regulation in 2016, allowing tech platforms linking "private transport" suppliers with passengers. While tailormade for ride-hailing, this permitting process initially opened the door for our service. The reaction of authorities to Jetty was a mix of mild encouragement and skepticism. Ride-hailing rules did not limit the size of the vehicles, number of seats or stops along the way. While our service has important differences with taxi-like app-based services, there was no legal reason to deny our permit. However as we move downmarket, differentiate fares and recruit public transit operators, we are pushing the boundaries. A new regulatory strategy will be needed to scale.

2) Recruiting transport operators to supply rides. Authorities feared, correctly, that incumbent operators would perceive our service as an invasion of their "property rights". We brokered meetings with obscure jitney federation leaders to convince them of joining us. This process was painfully slow, and at several junctures dangerous. In Jun'17, we finally struck a deal with a small jitney association. Their leader agreed to commit four vans to our service during a one-year pilot. The positive results appeased doubters and allowed us to recruit more operators, but we still face resistance. We made national news last April, when a small group of jitney drivers attacked one of our busses and blockaded our main dropoff point for two days. They soon backed down, after a storm of social media posts from fed up passengers pressured authorities to intervene.

Regulatory hurdles: Regulation usually comes in response to (rather than in anticipation of) new services. Since launch, we have been able to position our service either as a Transport Network Company (like ride hail), or as a tech supplier to permitted jitney services. This strategy has worked so far, giving us regulatory cover without forcing us to sacrifice flexibility. Our main strategy to overcome future regulatory challenges is to make passengers, drivers and operators happy. These three groups need to be our most vocal supporters. We need to document and publicize our impact, and recruit allies. 

Recruting more operators: As our business model becomes more well known, more jitney associations are willing to try our tech. However, we need to figure out ways to reduce the financial risk they take in partnering with us. Our tech currently requires significant adaptations to their existing business model.  Drivers resist digital payments, as they wrestle control of the farebox away from them. Service usually runs without a fixed schedule, making it difficult to offer seat reservations. And a new Jetty route takes some time to mature, and the industry is not accustomed (or willling) to operate at a temporary financial loss for the sake of our service. So, our main strategies to accelerate operator recruitment is to a) accelerate tech development to adapt our service to their needs, and b) establishing a "guaranteed revenue" program for new operators and new routes. 

We are currently raising US $1.5 million to fund both strategies.  

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 We employ 17 full time staff (currently), focused on a) tech development (maintaining and improving our admin, passenger and driver apps); b) operations (leveraging data to expand service areas, improve scheduling and evaluate driver performance); c) customer support (managing a two-way, real time communication channel with passengers, aggregating suggestions and gaining insight from complaints) and d) growth (acquiring users, engaging and recruiting new operators). We currently work with 5 different transportation organizations, who employ roughly 115 individuals servicing Jetty rides (drivers, supervisors and mechanics).

Onesimo Flores and Cristina Palacios co-founded Jetty. Onesimo developed the idea while completing his PhD at MIT. His dissertation explored the conditions under which planning and regulatory functions could be "reinserted" into informal transport industries in Mexico City and Santiago, Chile. He knows the jitney industry, its flaws, idiosyncracy and potential. Cristina is an experienced entrepreneur. In 2010, she founded Aventones, a successful ridesharing company in Mexico City (later acquired by BlaBlaCar). She has substantial operations experience, and runs a tight ship.

Compared to most tech-enabled transportation services, our organization has a distinct strategy. We do not replace the existing transport industry. We make it better. We do not exploit workers to make our business model work. We improve worker conditions to obtain higher quality service (which makes our business work). This approach is substantially more complicated, as it involves transforming the way this industry is currently organized, and requires earning trust from skeptical authorities, skeptical drivers, and skeptical passengers. We are uniquely positioned to take on this challenge: Not only do we know the ins and outs of transportation in this city. We know how to develop user friendly technology with a limited budget. And most importantly, we how to nurture relationships with jitney and minibus operators.

We are based in Mexico City, with operations throughout its metropolitan area. Congestion is epic. Distances are long. Mass transit is flawed. This city is the best lab to tackle the problem we want to solve. 

Partnerships:

We partner with several jitney organizations (SVBUS, Grupo Tlalnepantla, Rutas Unidas, Taxis Electricos Compartidos, etc). 

Working with the Technical University of Munich (TUM). Prof Manos Chaniotakis, Alejandro Tirachini, and Antoniou Constantinos are evaluating Jetty´s impact on Vehicle Miles Traveled (VMT). 

Awards:
1. 30 Business Promises. Forbes Magazine https://www.forbes.com.mx/app-...
2. Winner of the 2019 Keeling Curve Prize, for "significant potential to reduce greenhouse gas emissions or increase uptake."
3. Winner of the 2019 World Summit Award for Smart Settlements and Urbanization. 
4. 2018 Leaders in Innovation Fellowship by the Royal Academy of Engineering

Featured in a OECD International Transport Forum report: "First-class jitney service: How an app-based mobility company in Mexico City provides better quality for users of informal transit.," pg 19 in Expanding Innovation Horizons: Learning from Transport Solutions in the Global South (2019). https://www.itf-oecd.org/expan...

Press: https://www.entrepreneur.com/a...

We help jitney or bus companies willing to meet higher standards sell seats to passengers willing to pay a higher fare. We keep a cut of the fare for this service. Vehicle occupancy rates are increasing, even in our newest routes. We should reach financial sustainability, at our current burn rate, simply by allowing our existing services to mature. However, we want to sell our seats at lower fares and recruit many more operators. This to increase the number of transactions, expand our geographical footprint in the city and reduce our dependence on a small number of suppliers.

So far, we have spent thriftly, and bootstrapped our growth. Marketing expenses are well contained, and our small team of in-house developers like to hustle. This has allowed us to fund Jetty without outside investment capital. So far, funding has come from a) $US1 million seed investment, b) ticket revenues, and c) the Keeling Curve Prize.

However, our technology needs to go hand in hand with our growth (eg: automate communication with users, ease monitoring of trips and add demand analysis features.) We need to reduce disruption to the jitney business model caused by our tech (eg. allowing boardings with no previous reservations, and allowing drivers to handle cash). We need more senior talent to accelerate development of our admin and of our passenger and driver apps. And we need to derisk adoption of our service by jitney associations by offering financial incentives. 

We are currently raising $US1.5 million from strategic partners to scale.

Our main focus is to increase the number to transactions. We have several strategies:

a) Diversify our products: Jetty is working hard to launch lower cost services, with a basic seat reservation service on existing jitneys and buses. As we develop this product further, our market ceiling will expand significantly. 

b) Launch new markets: We are evaluating launching in 3 cities in Mexico. One of them, Puebla, is scheduled in september with a strong local operating partner. If this lauch is successful, we will demonstrate our tech works in middle sized cities, and outside of out Mexico City base. 

c) Experiment with new operator recruitment strategies: Jitney operators dont usually like to take on the financial risk of trying new services. Adopting Jetty currently implies not only a significant leap of faith, but taking on a temporary revenue loss (as current passengers familiarize with the app, and new passengers find the new service). We are evaluating several derisking strategies (subsidizing rides, offering guaranteed revenues, establishind financial bonuses). Once we pin down a workable strategy, our oprator recruitment should accelerate. 

Our seed investors are willing to keep funding our company, in case revenues fall short. And we are raising funds from strategic partners, aming for $1.5 million, this year.

Being selected as a Solver would allow us to scale our impact. To scale, we need to deploy a low-cost hybrid system in which Jetty's app-mediated electronic payments, seat assignment, customer support and trip rating systems coexist (in the same vehicle) with traditional cash fare collection, loosely-controlled drivers, and flexible vehicle and trip assignments. We need to hire (and direct) 10 new developers to improve UX and UI in our apps, automate customer support and prepare our backend to manage >500 transport operators. We also need to grow and fund our customer referral program, absorb part of the revenue risk of limited-time pilots (to accelerate operator recruitment) and put together a sound legal strategy in anticipation of regulatory challenges.

We need mentors, strategic partners, and access to peers facing similar challenges. Of course we need funding. But we also want to dip into MIT´s pool of insights and hacks. 

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MIT Transit Lab.

New Urban Mobility Alliance (NUMO).

UITP.

Development banks in the region: World Bank, CAF, IDB Lab. 

Similar, scaled up companies in our space like SWVL (Egypt), Shuttl (India) and Grab (Singapur, Malaysia).

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To scale, and to have much more meaningful impact, we need to target lower income passengers, and we need to to adapt our tech to achieve a better "fit" with existing jitney services. Money from the GM Prize would help deploy a low-cost hybrid system in which Jetty's app-mediated electronic payments, seat assignment, customer support and trip rating systems coexist (in the same vehicle) with traditional cash fare collection, loosely-controlled drivers, and flexible vehicle and trip assignments. We need to hire (and direct) 10 new developers to improve UX and UI in our apps, automate customer support and prepare our backend to manage >500 transport operators. We also need to grow and fund our customer referral program, absorb part of the revenue risk of limited-time pilots (to accelerate operator recruitment) and put together a sound legal strategy in anticipation of regulatory challenges.

Women avoid jitney rides in Mexico City. Official surveys report over 70% women in this city have decreased transit usage for fear of sexual harassment. Jetty helps solve this problem. By making rides less congested and drivers more accountable, we are fostering a much more inclusive environment for female commuters. Seems to be working. Women make a larger percentage of our user base than men (inverse ratio is true for regular jitneys.)

To have more meaningful impact, we want to target lower income passengers, and need to to adapt our tech to achieve better "fit" with existing jitney services. Money from the Innovation for Women Prize would help deploy a low-cost hybrid system in which Jetty's app-mediated electronic payments, seat assignment, customer support and trip rating systems coexist (in the same vehicle) with traditional cash fare collection, loosely-controlled drivers, and flexible vehicle and trip assignments. It would also allow us to accelerate development of security features in our pipeline, like peer to peer ratings for passengers, panic button and "follow my journey".

We need to hire (and direct) new developers to improve UX and UI in our apps, automate customer support and prepare our backend to manage >500 transport operators. We need to absorb part of the revenue risk of limited-time pilots (to accelerate operator recruitment) and put together a sound strategy in anticipation of regulatory challenges.

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To scale, and to have more meaningful impact, we need to target lower income passengers, and we need to to adapt our tech to achieve a better "fit" with existing jitney services. Money from the Morgridge Family Foundation Prize would help deploy a low-cost hybrid system in which Jetty's app-mediated electronic payments, seat assignment, customer support and trip rating systems coexist (in the same vehicle) with traditional cash fare collection, loosely-controlled drivers, and flexible vehicle and trip assignments. It would also allow us to accelerate development of security features in our pipeline, like peer to peer ratings for passengers, panic button and "follow my journey". 

We need to hire (and direct) new developers to improve UX and UI in our apps, automate customer support and prepare our backend to manage >500 transport operators. We also need to grow and fund our customer referral program, absorb part of the revenue risk of limited-time pilots (to accelerate operator recruitment) and put together a sound legal strategy in anticipation of regulatory challenges.

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