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Inside Juno, The Company That Wants To Beat Uber By Wooing Its Drivers

Can treating drivers better give Juno an edge against the $62.5 billion ride-sharing giant?

Inside Juno, The Company That Wants To Beat Uber By Wooing Its Drivers
[Photo: Kirayonak Yuliya via Shutterstock; App photo: Wim Robberechts/Photonews via Getty Images]

On a rainy Wednesday in February, about a dozen Uber and Lyft drivers parked their cars in the garage of a New York City skyscraper and gathered in a 47th-floor office with floor-to-ceiling windows. The drivers, who had 170 years of professional driving experience between them, were offered glasses of water and snacks, interviewed individually by nodding employees using iPads as notebooks, and funneled into a conference room to hear a pitch about Juno, a soon-to-launch ride-hailing company that aims to beat Uber by wooing its drivers.

"Drivers are our business," began Nicky Stanard, who trained Apple store employees before landing at Juno as the training and culture coordinator. "So that’s why we built a business model that puts drivers first." He acknowledged the invitation to the office, the free parking, and the snacks Juno had already offered to the drivers. "You should expect that we will continue this level of kindness throughout our relationship with you," he said.

Though Uber and Lyft maintain that the majority of their drivers are happy with the business arrangement it offers them, in which the companies charge a 5% to 36.4% commission on every fare, some of their drivers have led visible strikes and protests across the country. A group of drivers calling itself the Uber Drivers Network has even developed its own alternative ride-hailing app, which it plans to launch as early as next month. These drivers say fare cuts by Uber and Lyft have made it challenging for them to earn a living wage after expenses like gas and car payments. (Uber says its drivers make more money overall when fares drop, because increased demand fills their hours with more jobs, though none of the 13 drivers at the Juno presentation said this had been true for them.)

After Juno cofounder Talmon Marco, who sold his previous company, the messaging app Viber, for $900 million, says that in these complaints he saw an opportunity to compete with Uber and Lyft. In order to grow their fleets, both companies offer referral fees and sign-up bonuses to new drivers. Instead of spending money on recruiting new drivers, Marco decided that Juno would try to give drivers an everyday deal they couldn’t refuse. They would tell their friends, and the fleet would grow organically.

Since December 2, Juno has been running daily sessions like the one I attended in February. The startup says that it has thousands of drivers—each of whom it's currently paying $50 per week to keep its app running as a test—already signed up to take jobs when its service launches this spring. It has deliberately targeted Uber and Lyft drivers, and requires its new drivers to have a rating of at least 4.7 out of 5 stars on either platform.

During his presentation, Stanard is not shy about casting Juno as a better alternative to Uber. "Some companies call drivers 'partners,'" he said, referring to the well-known Uber term. "But we actually mean it." Juno will take a 10% commission (guaranteed for the first 24 months) whereas Uber takes a 5%-25% commission. Stanard compares a $30 fare on either platform. After taxes and the app’s commission, a new driver would take home $19.11 of that fare on UberX, and $23.61 on Juno’s equivalent service. An Uber spokesperson declined to comment for this story.

Stanard then addressed a list of common driver grievances. Juno plans to offer 24-hour driver phone support ("That’s a good one, right?" Stanard asks when drivers nod their heads. A man in a blue sweater pipes up: "The best one.") Juno will provide each driver with a phone and pay for data ("If we’re working together, it’s not fair that you would have to pay for the device," Stanard says.) Drivers will get paid more for picking up rides in surge areas, but customers won’t be charged more, as they are with Uber and Lyft, which means customers can’t manipulate the surge price by changing locations or waiting to request a ride until the price drops. Unlike Uber, tips will be allowed. ("This is a service industry," Stanard says.) And drivers can block any customer they don’t like, so they never have to pick up someone who has been rude or inappropriate again (the drivers all "ahhh" with approval).

"Uber thinks customers come first all the time," interjects the man in the blue sweater again. "Versus how you’re thinking, which is that the driver comes first, and he’ll make the customer happy."

"Do you have any share riding?" asks another man.

"Do you mean like UberPool?" Stanard says. "No."

"Good. I don’t want to be a bus driver."

Stanard hasn’t even gotten to the kicker yet. Juno has reserved half of its founding shares for drivers (they’ll be diluted as investors come on board, but no more so than Juno's four founders’ shares). Drivers earn shares by picking up more rides. Those who drive full-time for 24 months out of 30 can keep them, even if they’re taking rides for other companies like Uber and Lyft during the same time. "The driverless car is a real thing," Stanard says. "The difference between us and other companies is that when the driverless car comes, what do you think will happen to you? We want you to continue to benefit from your labor."

Heads nod. Stanard asks if the drivers want to sign up. They unanimously say yes.

In theory, Uber and Lyft’s platforms are worthless without its drivers. Even though neither company owns cars or hires workers, they can’t operate without them, and onboarding more drivers means they can respond more quickly to more requests for rides. But winning over drivers isn’t sufficient for success on its own. Uber, valued at $62.5 billion, has already spent years building brand recognition. How will Juno compete for customers? "We believe that passengers will be attracted to the fact that we are an ethical company that properly treats its drivers," Marco says.

Even that can be complicated. Some perks Juno offers drivers could also put it at risk for employee misclassification lawsuits like the ones Uber and Lyft face in several states. Companies giving workers equipment—Juno providing smartphones, for instance—has been used as evidence in employee misclassification lawsuits. Tamara Devitt, a labor and employment partner with Haynes Boone in California, says there's no clear criteria for benefits that companies can and cannot provide to independent contractors. "Ultimately it comes down to risk tolerance," she says, "and how comfortable [Juno is] with the risk of being sued."

Marco says he plans to give drivers the choice of whether they want to work exclusively for Juno as employees or to continue to operate as independent contractors. "If someone is working exclusively for you and you set the rules," Marco says, "then you really are an employee and you she be treated as such. It’s common sense."

Adib Zahrieh, a 38-year-old Venezuelan immigrant who has driven a car professionally for 19 years, approached a Juno employee after Stanard’s presentation. "I like that you go out of the way to make us feel like family," he told her.

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