Harrison Amit is leading a small startup with a big idea.
“The vision for the company is helping over 10 million drivers,” said the 28-year-old CEO of Hovr (pronounced Hover).
The Toronto-based ride-hailing company launches today, and will service the city and surrounding suburbs.
Amit’s goal is to make the company a national brand within a year and go way beyond that.
The question is whether this young entrepreneur compete with the global giant Uber, which has a 15-year head start and had 150 million active monthly users in Q4 2023 (including Uber Eats customers), or Lyft, which was founded 12 years ago and had 22 million active monthly riders in Q4.
Hovr’s yet to provide a single ride, but Amit believes his company’s approach could shake up the ride-hailing industry because of how it will pay drivers.
“Our tagline at Hovr is 100 per cent fare is 100 per cent fair. And what that means is that the drivers take home 100 per cent of the fare from every ride that they receive.”
It’s a play on words, but also a strategic play, setting Hovr apart from the giants it’s up against.
What 100% of the fare means
Amit says Hovr will appeal to drivers because instead of taking a percentage of the total fare on every trip to turn a profit like Uber and Lyft do, Hovr will charge a $20 monthly membership fee to work for the service.
That price is an introductory rate that Amit says will rise as the business grows, but a fixed cost means drivers don’t pay more for working more.
That’s how Hovr lets drivers keep “100 per cent of the fare.”
Hovr says it will make the costs of each ride transparent, giving riders a bill that shows the fare or driver’s pay (the base rate, kilometres and time), and includes what the passenger is being charged for insurance, city fees, a transaction fee plus a $1 “platform fee” from the company.
Amit says the 100 per cent fair slogan has helped sign up 5,000 drivers and 25,000 potential customers, through word of mouth, social media and a few billboards in downtown Toronto.
Milton Brady, a former cabbie who’s been with Uber for four years, said he couldn’t wait to sign up for Hovr.
“Hovr is a knight in shining armour,” he said.
Brady says the industry needs more competition to make things better for drivers, and that Hovr’s pay model would give drivers a “chance to actually build some kind of economical stability in their lives.”
Ride-hailing ripe for disruption?
In Amit’s view, the ride-hailing business is due for a shake-up, like the taxi business was upset by Uber when it arrived.
“We’re entering a market that is ripe for disruption,” he said, “It’s riddled with dissatisfaction, on both sides from the riders and the drivers.”
Kam Phung, an assistant professor with the Beedie School of Business at Simon Fraser University in Vancouver, says the ride-hailing industry is in need of change. (submitted by Kam Phung)
“As an industry, ride hailing is in need of change,” said Kam Phung, an assistant professor with the Beedie School of Business at Simon Fraser University in Vancouver.
“We know that it is riddled with problems and challenges, specifically on the workers’ rights fronts.”
On Valentine’s Day this year, a driver protest and strike was staged in several cities around the world as some gig workers logged off their apps, refusing work to bring attention to their pay and working conditions.
In Toronto, a report from Ridefair Toronto and the Rideshare Drivers Association of Ontario (RDAO) estimated many drivers were making less than minimum wage after expenses.
Toronto ride-hailing and food delivery drivers strike for better pay, working conditions
3 months ago
Duration 2:12
Some local drivers with companies like Uber, Lyft and DoorDash are striking Wednesday to call for higher wages. In a statement, Uber said the “vast majority of drivers are satisfied,” but drivers told CBC Toronto many of them are being paid less than $10 an hour.
What Uber and Lyft say about the business and fair pay
Both Uber and Lyft see the ride-hailing industry as thriving and report positive trends in their quarterly reports.
Both have also said they feel competition is good for consumers and drivers.
Uber Canada told CBC News in a statement “the vast majority of drivers are satisfied,” and in the Toronto area, for example, “are making $33.35 during engaged time per hour before tips.”
The company also said it believes “drivers should earn a guaranteed minimum wage,” and it will comply with new laws in Ontario and BC that enforce such a standard.
In an interview with CBC News, Lyft CEO David Risher said roughly speaking, out of every dollar that you as a rider pay, Lyft earns about nine cents.
He said the remaining 91 cents is split between insurance and other fees, but most of it goes to the driver.
“It’s in our best interest that drivers actually get paid more, because it means more people are on the platform,” he said.
Lyft CEO David Risher says that out of every dollar a rider pays, Lyft earns about nine cents. (David Hill/CBC)
A global brand?
Amit says Hovr is “positioning itself for the global stage,” but interest from drivers will be the key to the company’s growth.
He hopes drivers who are excited about Hovr and working for Lyft or Uber will convince their passengers to switch over, as well.
“I don’t believe there’s any level of brand loyalty, it’s more of a forced relationship with these companies, due to a lack of options.”
Phung believes Hovr could grow quickly because there’s a demand from some consumers for “gig-economy models that actually allow workers to have a fair wage, and contribute to the creation of a just and equitable society.”
But, he added, the reality of competing against big multinationals means the company could be in for a bumpy ride.
This was one of the signs displayed on cars that circled Toronto’s Union Station as part of a gig-worker and driver protest this week against ride-hailing companies and food-delivery services. (Philippe de Montigny/CBC)
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
