Upshift

Subscription Service for Cars

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Company Information

Website:

https://www.upshiftcars.com/

Sector:

Automotive Services

Location:

Oakland, CA

Upshift is redefining car ownership for urban living.

Specifically, the company is a fractional car leasing service for low mileage drivers. Whenever someone needs a car, they can order one through Upshift, and have it delivered to their home or office in as little as 30 minutes.

Cars always arrive clean and with a full tank of gas. When drivers are done with their trip, they simply leave it where it was delivered and Upshift picks it up. Upshift provides full coverage insurance and even handles maintenance and repairs.

In major cities across the U.S., the way people get around is changing.

Parking is increasingly scarce and expensive in urban areas, making owning a car a nuisance. More people are turning to services such as ride-, bike-, and scooter-sharing, particularly for short trips. But these options aren’t ideal for longer distance trips or running errands. Furthermore, carshare and car rental services are expensive, inconvenient, and often unavailable when and where drivers need them.

Despite these alternatives, roughly 1/3 of people in cities still own cars — they just drive them less and less.

According to Upshift, this has created a $26 billion market for people living in high-density cities who need access to reliable transportation, but only for a few days a week or month. This is the market Upshift is targeting.

Here’s how its service works:

First, users text Upshift letting them know when and where they want a car delivered. (Soon, this will be done through Upshift’s mobile app.) Users can choose between a Ford Escape Hyrbid SUV or a Toyota Prius sedan.

Next, the vehicle is delivered to the designated spot by an Upshift concierge. As mentioned, all cars are fully-fueled and arrive in clean condition.

When finished, users return the car to the delivery spot and the concierge picks it up. Drivers do not need to refuel or clean the car prior to returning it.

To complement this service, Upshift has designed and built a web-based administrative panel to manage subscriptions, billing, and bookings. It also has a dispatcher application that assigns delivery jobs to concierges and manages drop offs and pick-ups.

Upshift earns recurring revenue by offering monthly subscriptions to its service. Subscriptions are based on how often a person plans on driving. The three plans are:

• Getaway: This enables users to drive four times per month and costs $259 per month.

• Freedom: This includes eight “drives” per month and costs $439 per month.

• Auto Pilot: This includes 12 “drives” per month and costs $589 per month.

Upshift achieves 49% gross margins, and each car brings in an average of $1,430 in revenue per month.

The company spends $157 to acquire each customer, and each customer’s lifetime value is $4,842. Upshift has a 94% paid subscriber retention rate.

Upshift has achieved 15x growth in monthly recurring revenue over the last seven quarters, bringing its annual recurring revenue to $261,000. More than 1,400 people have signed up for Upshift, and the company has a waitlist of additional members eager to sign up as the company expands to offer its service in their city. Right now, Upshift is live in San Francisco, but aims to expand nationwide in the future.

Recently, Upshift partnered with Ford to integrate its software into two 2019 Escape SUVs. Upshift will run a pilot program with these vehicles from December 2019 through February 2020, and also receive $250,000 from Ford as project funding.

In addition to this capital, Upshift has received $442,000 in investments from URBAN-X accelerator, BMW/MINI, and more than 80 angel investors, including the co-founder of NerdWallet.

With funds raised from this round, Upshift will integrate vehicle telematics into its service. This will enable the company to remotely unlock and locate vehicles so members and concierges don’t need to meet face-to-face.

In addition, the company’s mobile app (under development) will enable users to set their own vehicle preferences and manage their account. A new fleet management system will keep track of all cars and a predictive algorithm will anticipate user demand.

Team Background

Ezra Goldman - Co-Founder & CEO

Ezra has more than 20 years of experience in the shared mobility market.

Prior to starting Upshift, he handled operations for ReachNow, a company managing fleet operations for BMW-produced electric vehicles. Before that, he worked at Stanford University, leading a team of students on developing a solution to improve the driving range of electric vehicles.

Earlier in his career, he spent time as a consultant with EMBARQ, an early-stage research company studying the potential for car-sharing services in emerging markets. He also gained industry experience as a driver for Uber and Lyft.

Ezra earned a Bachelor’s degree in Anthropology from Reed College, a Master’s degree in Urban Planning and Design from MIT, and a Ph.D. in Transportation from the University of Copenhagen.

Ayako Hiwasa - Co-Founder

Ayako brings entrepreneurial and consulting experience to Upshift.

He began his career as a consultant for The World Bank, working on the organization’s energy sector program. He helped conduct research into energy-saving products ideal for rural areas.

He then moved on to become a consultant for the Open Institute, a non-profit organization based in Cambodia focused on providing access to education and technology resources to local residents.

Like his co-founder Ezra, Ayako spent time as a mentor at Stanford University, leading a team of students on a mission to develop lighting and water solutions for rural poor in developing countries.

He earned a Bachelor’s degree in Social Science from Ritsumeikan Asia Pacific University and a Master’s degree in Health System Financing from the University of Copenhagen.

Co-Investors

Urban Us Fund

A VC firm investing in startups addressing issues in big cities

Urban-X

A venture startup accelerator investing in “disruptive” companies

Raising
$1.07 million
Committed
$65K (6%)
Current Valuation
$8 million Cap / 20% Discount
Min. Investment
$100
Deal Type
Title III
(For all investors)
Offering Type
SAFE
Finance History
  • $442K
    2017-09-01
    Unknown
    (Seed)
Notable Investors
  • Urban Us Fund
  • Urban-X
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