In this week's episode, we sit down with Sam Ryan, CEO and Co-Founder of Zeelo to talk about personalized bus service for employees and the organization's critical care policy in response to COVID-19.
Below is a transcription of the interview: Santosh Sankar 0:00 Hey ladies and gents, welcome back to the Future supply chain podcast. I'm your host Santosh Shankar and joining me today calling in from London is Sam Ryan, co-founder CEO of Zeelo. Welcome. Sam Ryan 0:13 Thanks for having me. Santosh Sankar 0:14 Absolutely. So, Sam before we jump into kind of what Zeelo is, and some of the initiatives, you've stood up as a part of the ongoing covert pandemic, would love to just get the 92nd skinny on what Zeelo is, what are you guys building over there? Sam Ryan 0:37 Yeah, absolutely. So Zello is a bus sharing service. We provide transportation for commuting, school runs, and events. And, and really the focus of the business since the start has been about identifying using data that we call public transport deserts, places that people find it very difficult to travel from A to B with anything apart from from the car. And our enemy is a business is very much the single-occupancy car. And we have focused on using data and technology and working in partnership with companies to design bus services that really rival the convenience of the private car and give people an alternative where public transit doesn't exist, right. So we're really trying to complement the existing public transit network where there are areas of high usage of single-occupancy cars. Santosh Sankar 1:41 How did you find your way into this industry building a company focused on mobility, complementing existing mass transit options and really as of late, you've been able to empower a lot of the frontline staff for your clients by providing them the service. Sam Ryan 2:05 Yeah, sure. So I was the answer to this question is my co-founder Barney and I really fell into mobility within grant thinking this is, you know what we wanted to do. But at University, we took two separate taxis to the same bar. And off the back of it. We built a service here in the UK, very similar to Uber pool focused on getting people to essentially book and share rides. And we grew that to five cities across the UK, this is sort of 2011 through 2014. When, you know, mobility and in the way we think about it today was very much in its infancy and Uber had really just only started launching in markets outside of the US, sort of 2013-2014 and, and we eventually sold that business to Addison Lee, which, which at the time was one of Europe's largest private hire taxi services. And we spent a couple of years there. And that's really where, I guess we learn on trade about mobility. But what really frustrated us then and to degree continues to are services that companies building will be extremely valuable. Lots and lots of focus on mobility inside dense urban areas, or, you know, people are working on technologies with longer time horizons, you know, such as autonomous vehicles and really, you know, as to people that grew up outside of a major city like London, we knew that actually, a huge percentage of people rely on a car every day to drive themselves to work to take their kids to the school to see their friends and, and obviously, we've become acutely aware certainly through 2019 as climate change became the climate crisis, and congestion has got to crazy levels. Have it actually people need to focus on that problem, you know, why really are people choosing to drive a private car as opposed to, as opposed to choosing a more sustainable form of transport? And, we started, you know, very much focusing on, you know, office space businesses kind of, you know, more I guess what you might associate with the Google Bus and focusing on almost democratizing that in areas of the UK and Africa where we operate that. It was actually you guys at Dynamo, Santosh that introduced us to the world of supply chain and logistics and in the industrial space. And we had a first conversation with the team at Pro Logis and we were able to start a trial with teens visa and DHL over here in the UK and that really opened our eyes to an entire new world. Where actually, this is some really interesting labor dynamic that these companies are, are struggling with, you know, whether it be actually getting people and getting workers to be able to come to job interviews in the first place, and obviously huge challenges with employee retention. And that's really opened up a whole new world for us as a business. And it's something we're doubling down on right now, particularly in the current climate. Santosh Sankar 5:22 Yeah, yeah. And, you know, for, for our listeners out there, when when we first met you, you're very much on that mobility track. But over the last 12 months or so, you've kind of leaned in increasingly into the world of the supply chain, as you said, but I'd be curious, you know, I'm sure our listeners are wondering this too. How do you practically stand up routes for manufacturers warehouses, grocers? How does that actually go down because you actually have a lot of interesting data that allows you to make this happen Sam Ryan 6:02 Yeah, exactly. And really the, the heart of it is being a full-service solution. So I guess just to clarify, we're very much a b2b business. So it's a we have, you know, one to one relationship with that individual business and manufacturer or perhaps the property developer. And the relationship starts with very much understanding of the challenges that that company faces. And, you know, particularly with, you know, more office space businesses, it might be around, okay, we have a lack of car parking, or we're trying to hit sustainability goals. But more on the industrial side, we see challenges, as I said, with kind of with labor force recruitment and retention. So that's where we start we understand what that challenge is. And you know, there may be a particular distribution center that wants to focus on hiring staff from a specific area. Or they may have recently, they may recently moved their distribution center and therefore they need to relocate those staff, for example. And then we use essentially user staff data to run through our platform. We compare that data alongside public transit information, and we identify where the gaps in those networks exist. And then we've essentially taught the technology to really try and think like one of those staff so, you know, if that staff member has the opportunity to work at Company A or Company B, how can we design a mobility solution that makes sure that they can't work at Company A, or, you know, if we're trying to discourage people from driving a car, you know, if those individuals have access to one, then actually what are the trade-offs that that individual makes between choosing to drive a car every day or choosing as a low-cost service. And by integrating all of that data, we're able to then design routes that really do have an impact and really are, do capture a big percentage of the addressable market. And the second key part of that is that we then operate an asset-light model so we don't go out and buy buttons and employ drivers. And key to that is the fact that often our services are only needed at specific peak times of the day. So, you know, in the case of a, an industrial park, or logistics park, it may be very much about, you know, there may be three shifts during the day, but for the rest of the day, there isn't enough demand from a residential area to that logistics park and therefore, you know, that vehicle can be used for other purposes. So we partner with local bus and coach operators who have huge amounts of spare capacity in their fleet. We train the drivers we give them access to our technology to operate our services. We give them access to our 24 seven customer pool centers to make sure that the journeys run smoothly and it really works is that the perfect partnership between us and those bus operators to then deliver the results back to that company. So that's kind of a bit about how it works. In terms of the user experience for the rider themselves, of course, we, you know, forgetting all the fancy things we do with data, and we bus operators that the focus for them is just making their daily commute as simple and stress-free as possible so that they can, they can book their journey through our mobile app, they can track the vehicle, they understand if the service is running, right. And they can see all of that running in real-time, all the things that you'd expect from mobility service in 2020. Santosh Sankar 9:38 And the interesting part is you're able to almost aggregate this long tail of coach operators right? And how, how utilized are these assets before Zeelo comes in and strikes a partnership because remember, it's really low. Sam Ryan 10:00 Yeah, exactly. So you know, our calculation and of course, you often see different statistics, but our calculation is about 30% utilization. And actually, it's more important to dive slightly deeper into that in the sense that you know it, again honing in on the UK, you know, coach businesses and coach operators, in general, have built their businesses around schools contracts, which is their most regular form of work, but of course, that's even that's not as regular as taking people to work because it's the holidays. And second, also they have a big peak of demand for three or four months of the year. You know, where people are going on essentially people are going on coach tourism, right, they're going on coach holidays, they're going to see attractions, etc. And kids are going on school trips. So for those three months of the year, the industry is and vehicles are very well utilized. Outside of that, we see the opposite dynamic. And operators face this continuous battle to balance their fleet to make sure they can capture that demand for those three months of the year, but the remainder of the year, you know, there's a big utilization problem. So what we're able to do for them is provide them with consistent work, you know, more consistent and regular work than they will get elsewhere. And actually, you know, as we found recently, being able to combine, using the same vehicles and drivers for office-based businesses, as industrial-based businesses is the perfect compliment, because, you know, we were currently you know, in the UK using services to take people to work to start at 6am shift and industrial location, and then using that same vehicle to take people to work and office base location for 8am and then using that same vehicle to go back to that industrial location at 2pm and so on, right. So, so we're able to actually really drive the utilization of these fleets in a way that they've never really had before. Santosh Sankar 12:10 How should our listeners think about Zeelo relative to public transit or ride-sharing in this b2b engagement? Because it feels like it's a great compliment, you're not necessarily purely substitute for some of the other mobility options people might have. Sam Ryan 12:35 Yeah, exactly. And it's very much in our DNA to be a compliment. You know, the, the overall statistic is that, you know, across all of our journeys, on average 70% of our riders used to drive to work on their own before they use our service. So, you know, we really are moving people out of single-occupancy cars and into using our services. And really, you know, our best deployments are where there are lots and lots of people traveling and very poor public transit options. So we're very much trying to fill the gaps as opposed to trying to replace. And actually what we find even in those locations, those difficult to get to locations where, you know, previously, there has been a high percentage of commuters traveling by private car, that actually that location does need a combination of different options to really solve the mobility problems. So, you know, there are areas where there is a relatively high amount of density in a residential area, we're actually Zeelo bus service can move, you know, 40 or 50 cars into one bus and you get all the associated benefits to that. But equally, there are more suburban or rural areas where actually car sharing or carpooling makes much more sense because there isn't enough density for us to operate but still That carpooling provider can move two cars into one car. So we very much, you know, picture ourselves as a complementary to the wider mobility mix. First of all, complimenting, you know, traditional public transit options, but also working alongside other mobility solutions, because, you know, in my opinion, there's no silver bullet. Santosh Sankar 14:22 And you touched on the environment. And you know, congestion, traffic's increasing carbon emissions, as a result, are increasing. And the environment stands to benefit from Zeelo. Talk us through that, because that's a really interesting thread I want to pull on. Sam Ryan: Yeah, absolutely. And, you know, even before our buses are electric, which is something we were really pushing for this year, you know, the, the concept of shared transportation or mass transportation, you know, that the concept of moving 40 or our average is 37. Individual single in us, you know the impact that can have on carbon emissions, air quality, the need for car parking congestion is obviously great, right? And, and if you take the average of averages, you know, you're talking about, you know, the average individual in the UK is missing about 170 grams of CO2 by driving their car, if they switch to one of our coach services that our average occupancy levels and so on. They're talking about 29 grams, right per individual. So it's a pretty significant drop, and that's even before electrification and that is what drives many of our clients, b2b clients to work with us is actually you know, we can help them hit their sustainability goals because lots of them are now starting to think about not only you know their impact on the environment from the direct corporations that also the indirect and in the indirect, I mean about how their employees are commuting to work, the impact that they're having on the community around them in terms of congestion, and so on. And almost more interestingly is it's particularly over the last year, as I said, as the, you know, climate change has become the climate crisis, our, you know, our individual riders, very much pressuring from the bottom up. So so, you know, in a recent survey of our commute riders, 40% of them said that the first reason that I chose to use Zeelo was because it was better for the environment than driving that car. Now, I think that's a pretty, pretty profound statistic. And I think that number will continue to increase because people don't really, really care about this. And it's very much part of our DNA as well. Santosh Sankar 16:56 It sounds like the process of starting Zeelo. You mentioned how you and your co-founder Barney, were experiencing a lot of inefficiencies right? You're taking two separate cabs to the same place. It just didn't make sense. You built one business around it sold it. But I'd be curious, like, Is there something about this market that you believe to be a truth that others are unaware of, or might just be flat out ignoring? That is driving Zeelo? Sam Ryan 17:34 Yeah, I really do. You know, a personal frustration in mind and it is really that there is really a big drive not just amongst private companies, but also amongst, you know, municipalities and policymakers around a drive towards electrification and drive towards autonomy, and all of these things, undoubtedly, are huge shifts that we need to undertake. That said, I think the concept of actually moving people from private transportation into shared transportation can actually have a much bigger impact. And even better, we can do it today. And I don't think that and in some ways, I think that, you know, people will maybe shy away from the problem because let's face it, people are very attached to their car. And people you know, find their cut using their car incredibly convenient, and they've already invested in it on cost and, and therefore actually convincing people to give up that car and give up some level of convenience to use a shared transport service is a difficult problem to solve. But if we think about the impact of 40 cars into one bus, they keep saying, and you know, that's a really profound impact. And we don't need to wait for a better charging infrastructure and better range. And we don't need to wait for the technology with autonomous vehicles to be ready. You know, we can do that today. And, and eventually, as those tips and technology come together, then then the benefits multiply. So, you know, I think that we, as you know, very much focused laser-focused on having an impact today. Santosh Sankar 19:25 Yeah, no, that that totally makes sense. I want to shift gears here and talk about some of the work you're doing as the world here...we're all collectively battling the COVID-19 pandemic. And you were very quick with your team to launch the critical worker offering. What is that? Walk us through what you're providing your customers? Sam Ryan 19:58 Yeah, absolutely. You know, it's obviously no secret that the world of transportation is sort of, in turn upside down in this period. But we really see a need for, you know, dedicated services to really support critical work. And it was a very challenging period. And we're seeing a few different things, one of which is obviously a reduction in the provision of public transportation. Two is it for those that are continuing to use public transit, it's very difficult to put the level of infection control in place and to reduce the risk because, you know, again, I use London as an example, you know, introducing infection risk measures across the entirety of the London Underground Metro network. You know, it is a mammoth task is nearly impossible and understandable, and that is Communities critical workers are rising in power every day, I really do think there is a safety issue that because these, these workers are going to be overworked, they're working overtime, they're doing everything they can to save lives and support the economy through the challenging period. But never with some extreme fatigue issues associated with driving and therefore, you know, taking inspiration from some of our current clients who have already implemented the service with us and talk to them in a second. And, you know, we've introduced a critical worker service, which is really designed to again, work one to one in combination with, you know, with hospitals with industrial parks, anywhere where there are large amounts of critical workloads traveling every day to deliver essential services and delivering specific bus services with them with a much higher level of infection control. So, you know, all of our vehicles are under 50% occupied our drivers and vehicles going through extra levels of sanitation, we have the additional procedures in place to deal with ill drivers or passengers and so on. And we're working closely with them to make sure that we're following all of the public health guidance on an ongoing basis because, you know, ultimately, these people still want to get to work and they've got to get to work in a safe way in a way that reduces infection risk, and also in a way that supports you know, the inevitable fatigue that these workers are going to be going from. So the types of industries we're focusing on our healthcare, food, food distribution, utilities and logistics, and we're doing that across the regions we already operate into. So in the UK and South Africa, and actually, it's been a great response from our bus operator partners as well, because of course, you know, they call another spare capacity due to leisure cancellations. So we're able to actually deploy the networks, you know, within 24 hours to support these organizations. And one thing worth mentioning, you know, particularly for your listeners is, you know, lots of these through distributors and industrial locations are actually trying to ramp up the amount of staff that they're hiring to these locations because of the increase in demand. And so we're able to support them with that, that hiring as well. Santosh Sankar 23:50 And, you know, there is massive societal impact, you know, economic impact aside if these front-line workers cannot get to location, right? Because you just mentioned grocery but equally healthcare supply chains. All essential items really need to have these people safe and secure and at work. I'd be curious, given you've been running this for a couple weeks, you've you've checked in with clients, what are best practices that you've observed for companies to secure their critical staff? Are there certain things that you've seen them doing or undertake in order to keep people safe? Sam Ryan 24:42 Yeah, absolutely. And the balance of a few things going on here is that you know, all these companies are obviously following, you know, the government's guidance on a daily basis, which is ever-changing. That's one thing. And all of them having to factor in that, you know, perhaps five to 10% of their workforce, maybe more are going to need to actual notice self-isolate, either because they have symptoms or remember their family has been put into contact with somebody that has been. And therefore, they're having to hire an additional staff at a rate that they have never experienced before. So, you know, lots of them. are trying to hire very quickly and then, with respect to our services, you know they're putting them in place as a way of, you know, supporting their workers through a challenging time in their day to drive that putting them in place to support their hiring, where they're putting them in place in a sensible way and following those, those procedures that you're about to control infection risks, right. We're not putting on forty seats on uses and filling them up, you know who did the opposite of that, right? We're putting these in place and making sure that the right social distancing policies in place and so on. And so so it's a fine balance here because, you know, the critical work is immediate, more than ever. And these, these locations almost need to be staffed to much higher levels than they have been yet. We've also got, of course, social distancing. So it's kind of really challenging, dynamic. And of course, transportation is just one of the many things the company's got to deal with right now. Santosh Sankar 26:35 And if there are any listeners interested in exploring this service for themselves, they can reach you at Sam at Zeelo dot CO and geographically, you're UK and South Africa focused right now in rolling this out as well. Is that right? Sam Ryan 27:01 Yeah, exactly. Yeah, exactly. So, we've got geographical coverage across the entirety of the UK and Africa. Santosh Sankar 27:11 Very cool. Very cool. Well, Sam, it's great having you on. Great to see what you and the team have done here, as everybody's scrambling to secure their people, but equally try to maintain a flow of critical supplies to the citizens that need it. And with that, bid you a safe and healthy few weeks and look forward to seeing how Zeelo emerges out of this very cool stuff. Sam Ryan 27:44 Thanks to you and the team at Dynamo.
About The Future of Supply Chain
During each episode of The Future of Supply Chain, we sit down with a different entrepreneur, investor, or industry veteran to discuss their story, views on the industry, and how we can collectively build the future of supply chain together. Listen to more episodes at https://www.dynamo.vc/podcasts.
About Dynamo Ventures
Dynamo Ventures is a pre-seed and seed stage fund that invests in supply chain and mobility startups, worldwide.