'Uber for kids' startups battle for drivers shed by Shuddle
SAN FRANCISCO — A tougher environment for start-ups is providing opportunities for competitors in niche markets. Take the small clique of tech firms sometimes referred to as "Uber for kids."
HopSkipDrive, a ride hailing service for children that has been operating in Los Angeles since last year, is entering the San Francisco Bay Area market with a call to all drivers who had been working for this city's recently shuttered service Shuddle.
The L.A. startup is in a race for drivers with another area kid-shuttle service called Zum, which has already signed up more than 100 Shuddle drivers, Zum founder Ritu Narayan told USA TODAY.
HopSkipDrive's three founders sent an email to Shuddle drivers Friday asking them to sign up on the startup's website for an orientation for invited drivers on April 27 in nearby Oakland.
The L.A.-based service had long been planning to expand beyond its market thanks to $14.1 million in funding, including a $10 million round in January led by FirstMark Capital and Upfront Ventures.
Shuddle had raised a similar amount since debuting in 2014, but last week closed down, citing capital constraints, the latest casualty in a cooling start-up economy.
Raising capital is getting increasingly difficult for Silicon Valley startups. Funding for new ventures dropped 25% in the first quarter of 2016 to $13.9 billion, the biggest quarterly drop since the dot-com implosion at the turn of the century, according to data from Dow Jones VentureSource. The 884 deals in the quarter represents a four-year low.
Shuddle, Uber for kids startup, runs out of gas
HopSkipDrive's overture to Shuddle drivers would appear to be an effort to steer them away from joining Zum, a new entry to the kid-focused ride-hailing market that has yet to raise venture capital.
These ride services target children who are out of car seats up through around age 15. The pitch to parents is a service that typically costs around 10% to 20% more than an Uber ride, but provides a driver with a background in childcare. HopSkipDrive calls its contract workers CareDrivers.
The background checking process has proved to be a key step for the early-stage companies.
HopSkipDrive has from its inception gone through the process of vetting its drivers via fingerprinting and the Department Motor Vehicle's Trustline certification process. Shuddle had initially not sought Trustline certification, but retroactively sought to verify all its drivers to meet state requirements for businesses that cater to minors.
"In order to prepare for our expansion to the Bay Area in May, we have been working closely with Shuddle to find a transition plan for their former drivers who are already approved by Trustline and want to continue this line of work," co-founder Joanna McFarland tells USA TODAY.
Follow USA TODAY tech reporter Marco della Cava on Twitter: @marcodellacava