While personal car ownership has not, and may never, completely fade, today’s consumers have a menu of transportation options: ride hailing, ride sharing, and micro-mobility vehicles like e-scooters and dockless bikes.
Ride hailing apps (Uber, Lyft) and micro-mobility (Bird, Lime, Jump) have ascended rapidly, with the former marking two of the buzziest IPOs of this year and the latter becoming the fastest U.S. companies ever to reach billion-dollar valuations. But the irony behind those splashy headlines is the truth that, at least for now, both ride hailing and e-scooter companies actually lose money on each ride.
Sneh Parmar has a plan to change that, by taking a page from how some of the biggest tech companies make their money: advertising revenue.
“We started to see all of these new micro-mobility services out there, and then we saw all these storefronts trying to attract people with location-based marketing, which we saw in the Pokemon Go phenomenon,” Parmar tells Hypepotamus.
Parmar, a recent graduate of Georgia Tech, made these observations while working on a startup concept centered around payments in parking garages. He quickly widened the scope of his research, and out of that pivot came Parka Solutions, the first native advertising platform for digital transportation providers.
The adtech startup allows businesses to create and target ad campaigns or reward deals on a highly location-specific basis.
The platform then pushes out those ads through transportation apps like the aforementioned ride-hailing, e-scooter, and e-bike providers. Parka’s API integrates directly into those apps.
The ad dashboard is similar to a Facebook Ads or Google Ads platform, which Parmar says was intentional for ease of use.
“Think about a small local coffee shop, for example” says Parmar. “Google and Facebook ads are not really going to work for them, because if you’re at home, you’re not going to leave your house just to go buy a coffee. We actually bring people to your front door.”
The revenue split is simple: the local business or brand pays for the ad campaign on the Parka platform, and the startup divides the revenue between themselves and the transportation provider.
Parmar says that, in addition to revenue per trip, the startup has a big opportunity with the robust consumer data they will collect.
“We get so much data on that transaction — impression data, engagement data, and then, if they actually go use the offer and purchase something, transaction data as well. What’s really powerful is that the company can get data on their user after they leave the ride.”
After working on the dashboard for the better part of a year, Parka Solutions soft launched in a limited trial at this year’s South by Southwest festival in Austin, TX. They partnered with a smaller ride hailing company and reached about 300 people.
Despite the relatively small sample size, Parmar says the engagement data — an over 30 percent engagement rate — from the trial was highly encouraging.
Though the startup has not had a public launch yet, they are currently in talks with several transportation providers, including a top-three ride hailing network by market size. They plan to launch first in New York later this year and are working with economic development agencies on the ground to onboard local businesses.
“That will prove out our model and give us an open-world pilot, which we need before we go out to raise our seed,” says Parmar.
They also recently received an additional $50,000 from the Summer of Acceleration, a program in Memphis that combines the network of three local accelerators. Parka Solutions is taking part in the Summer of Acceleration’s smart city track and plans to open that seed immediately following Demo Day on August 15.