Hungry? Lost your phone charger? Need lip balm? Uber doesn't want that to be a problem for its passengers. So it's partnering with Cargo, a startup that provides ride-hail drivers with small vending machine boxes filled with stuff to sell to riders.
Uber unveiled the partnership on Thursday saying the vending service will make rides better for passengers and give its drivers a way to make extra money. Cargo has been operating since June 2017 and is in nine cities, including New York, Baltimore and Atlanta. Now it's expanding to San Francisco and Los Angeles.
"Drivers were already doing this naturally … We've streamlined it," Jeff Cripe, Cargo CEO, said in an interview, referring to a common practice of offering water or gum to passengers. "It breaks down the invisible barrier between the front seat and back seat."
Many Uber drivers saywith longer working hours and getting steadily lower pay. In an effort to combat this, the ride-hailing company has been . Over the last year, Uber has added in-app tipping, 24/7 phone support and easier passenger pickup systems. Partnering with Cargo is one way the company can help drivers earn a little more cash.
"Cargo did a good job of providing more for these drivers," Keith Hensley, a business development lead for Uber, said in an interview. "We think it's a better service for both our drivers and riders."
Cargo provides drivers with a box of snacks, drinks, electronics and beauty products for free. The box sits on the console between the driver and passenger seat. Each box has about 10 products, including roughly seven retail items, like RX protein bars, earbuds and morning recovery drinks. It also has about three free items, like Twix candy bars and gum. Passengers can buy the items through Cargo's website on their smartphone.
The driver gets a 25 percent commission of all sales, plus $1 for every transaction -- even one involving a free product. Cripe says this generates an average of $100 per month per driver. Uber doesn't get a cut of these proceeds, but it's getting an undisclosed equity stake in Cargo as part of the partnership.
Currently, Cargo has about 7,000 active drivers. With the Uber partnership, drivers can stop by one of the company's driver hubs and sign up to get the vending box. Cargo refills the box when necessary. Drivers for other ride-hail companies, like Lyft and Juno, can still work with Cargo.
"When I tested Cargo on the road it required a minimal amount of extra work and served as a great conversation piece with my passengers," said Christian Perea, who works as a ride-hail driver and also writes for The Rideshare Guy blog. "I hope to see more things like this as drivers can use any extra revenue stream they can get."
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