How ride-sharing app Via is pivoting its business model in the age of coronavirus

Ride-hailing companies like Uber (UBER) Lyft (LYFT) and Via are seeing steep declines in ridership as populations around the world stay home to contain the novel coronavirus, or COVID-19.

To survive the lull and address the COVID-19 crisis, Via CEO and co-founder Daniel Ramot said his own ride-sharing company is utilizing its existing service that provides shared ride shuttle services in areas underserved by public transit systems to help essential employees get to work.

“What we’re really seeing is a desire by cities to adapt,” Ramot told Yahoo Finance. “Because [our] software is quite flexible and modular they’re asking us to adapt to help them address the COVID situation.”

Instead of Via’s shuttles being deployed on its public app platform, essential workers who qualify are being approved to use a semi-private version. Health care workers, and others who can qualify to use the service include grocery store employees, food transport personnel, and those who deliver essential goods to seniors, children, and people who cannot otherwise leave their homes. 

“So we’re seeing services that were previously open to the public — dynamic-type shuttles — now being adapted for essential employees, like health workers or workers in critical industries,” Ramot said of the service, which partners with city transit providers, universities, corporations and other entities to provide the shuttle services in under-served areas.

Revenues for that arm, prior to the arrival of COVID-19, were expected to surpass those of its popular ride-sharing service for individuals, by the end of the year.

‘A significant impact to the consumer shared ride business’

Since governments around the world began to require social distancing and reduced travel, Via has seen a 70% to 80% drop in ridership in its consumer ridership arm.

“We’ve seen, much like Uber and Lyft have reported, a significant impact to the consumer shared ride business, a pretty steep drop in ridership there, and particularly in New York which is our biggest market with it being pretty hard hit,” Ramot said.

Conversely, in some countries, he said, Via has seen virtually no impact to ridership, though he declined to say where the robust activity remained.

However, on the municipal services side, Via’s software services and software-enabled services are experiencing less of an impact. Berlin, Germany, has worked with Via to adapt its public Via service, for example, to expand its service area and run overnight rides for workers who need transport during hours when its city transit system is idle. In Ohio, Via is working with Columbus’ central transit authority to replace certain parts of the city’s network with on-demand shuttle service. Discussions are ongoing with other cities to optimize their transit networks.

“Nearly in every one of our existing deployments in the U.S. — which we have I think 60 or so — we are discussing how to adapt that, whether to expand them or transition to support these emergency services,” Ramot said.

Amid the tumultuous ridership decline, Via still closed $200 million in a series E financing by EXOR, announced Monday, bringing the company’s valuation to $2.25 billion. The infusion of cash, Ramot said, would hopefully allow the company to get to an IPO in two to three years.

As for whether layoffs are to come, Ramot said the company is evaluating only how careful it needs to be with respect to hiring.

“We had conversations with [EXOR] about what is it going to look like and of course no one knows what’s going to happen, or how long it will last, but it feels clear to me that with cities, when we emerge in this crisis, hopefully, public education is going to play a big role in reviving cities and city centers, as we’re going to need inexpensive, affordable, accessible ways for people to get around again,” Ramot said. “Everybody’s finances will be strained, so that’s the sort of solution that we provide.”

Alexis Keenan is a reporter for Yahoo Finance and former litigation attorney.

Follow Alexis Keenan on Twitter @alexiskweed.

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