San Francisco based Shuddle, a child-focused ridesharing company that once described itself as "Uber for kids" is describing itself as "out of business" today, after the venture-funded company ran out of road.
In a text message sent Thursday afternoon (see above), users were informed that today would be the last day for the service. According to the SF Business Times, a company spokesperson said that "we worked hard to find the financial resources that would allow us to continue to grow, but ultimately could not raise the funding required to continue operations."
Shuddle launched in October 2014, and transported unaccompanied minors who paid a $9 monthly membership fee and a minimum of $8 per ride, though most trips averaged at around $24, the Chron reports. As with Uber and other services, independent contractors transported the kids in their private cars, and in 2015 "ran afoul of regulators for failing to use Trustline, California's child care registry, in its background check process," the Biz Times reports.
Though the company weathered the background check storm and revised their policies, additional clouds appeared on the Shuddle horizon in November of last year, when the company founder stepped down as CEO amid rumors of revenue issues.
The 32-person company's last round of funding, a $9.6 million infusion from RRE Ventures, was intended "to expand the company’s business both in the Bay Area — its only market since coming out of beta in October 2014 — as well as into new markets," Techcrunch reported in March of 2015, with new markets for the company to "be announced in the next couple of months." But that's not what happened — instead, new CEO Doug Aley tells the Chron, that money "fueled its operations for the past year" as the company struggled to keep going in its sole market of the Bay Area.
The company tried to raise $10-$15 million more “to pull us through to profitability," Aley said, but “My world has been colored by on-demand apocalypse headlines that littered the news over the past six to eight weeks when we were trying to raise rounds,” so they were unable to score the dough.
Shuddle "lost money on every ride until this year, when it achieved positive margins," the Chron reports, and had "given some 65,000 rides throughout the Bay Area, with an emphasis on the East Bay, and was up to 7,000 rides a month."
But that wasn't enough to keep the company going. “We ran out of money,” Aley tells the Chron. But he still maintains that the business was sound, as "The service is needed."
“Parents tells us over and over again that we are heroes, "Aley says, and that the company "saved their marriages, stuff like that.”