View of taxi board
Thomas Bonfert—Getty Images/Flickr RF
By Katy Steinmetz
November 22, 2014

As Uber weathered a storm of bad publicity this week, a relatively small competitor put a new CEO at the helm. Rakesh Mathur is a serial company-founder who worked at Amazon after it bought his e-commerce startup Junglee. He’s now running Flywheel, an e-hailing app that everyday taxi drivers can use to pick up smartphone users and fight back against the disruptors.

Flywheel is in a mere three cities, compared to Uber’s 220 worldwide. And while the company just announced $12 million in funding, Uber is raising rounds by the billion. TIME spoke to Mathur about privacy, the pros and cons of Uber’s creative destruction and how the company plans to take over America despite the competition.

TIME: In a recent email, one of your company representatives described Flywheel as the “non-a–hole” alternative to Uber. Can you comment on that positioning?

Mathur: I think the last couple of days have been pretty shocking, right? Where you’re not just being told, “Hey, I know how to violate your privacy. I do that all the time. But I’m even worse than the [National Security Agency]. I’m going to take that information and do bad things to you.” I think a–hole is probably a mild word. And the fact that across the organization they feel so open using things like their God View, where you can see anybody who rides in an Uber car. Every driver that drives for Uber is tainted.

These transportation startups generally have the ability to know where their drivers are and where customers are needing to be picked up. What is your policy at Flywheel about who has access to that information and when?

It exists for some complaint or something that we’re solving, like disputing a fare. Certainly we can collect all the data on trends, so we know where demands are peaking and so forth . . . No one should have access to this information. It shouldn’t be called out. It should be available to solve consumer-initiated complaints. I don’t think monitoring individual information about people’s individual rides is something that is anybody’s right to know.

How do you see Lyft as a competitor that is different from Uber?

Their corporate philosophy projects as a lot kinder, gentler. Lyft is every bit as fierce a competitor.

Do you see Uber as a more direct competitor, more similar to a taxi service than Lyft, where riders are invited to sit in the front seat and chat?

We don’t need to obsess about Uber and Lyft beyond a certain point. Our primary job right now is to get into this huge supply that is available to us. And that’s going to keep us busy for a few years, making sure we are in all the cabs in America. I would liken worrying too much about Uber and Lyft to driving by looking in the rearview mirror.

What are your plans for expansion?

There’s so much inbound interest right now from markets all over the country. We’re going through them and figuring out which of the fleets in which markets give us critical mass. There’s also a lot of interest from software service providers within the taxi industry. So we’ve got our plate full.

Where do you think you’ll go next?

We’re in San Francisco. We have toeholds in Seattle and Los Angeles. And in the next three-to-six months, we should be in many of the bigger cities in the United States.

Are we talking another three cities? Another dozen?

More like another dozen than another three.

I know you said you try to keep Uber in the rearview mirror, but how do you compete with a service that is raising funds a billion dollars at a time?

In terms of capital, I’ve built multiple companies. In the past 20 years, I’ve sold six companies. I’ve got pretty deep connections in the venture, finance and angel world. With any luck, we’re going to raise all the capital we need. The other part is that if I had $100 million right now and I felt compelled to spend it, I could make some terrible mistakes that I haven’t thought through. And it’s very hard to scale back.

You have a lot of advantages in leveraging the already-existing taxi industry. No surge pricing. Allies in some transportation authorities. You may have an easier time getting legal access to airports. What do you see as your key advantage?

Taxi companies offer a more safe and knowledgeable environment. Safe, as in taxi drivers, for all the insults that are hurled at them, have to go through fingerprinting and checks against national databases, including the FBI’s. The standard Uber or Lyft driver is, maybe, slightly more checked out than the general population. I’m fiercely concerned about how unsafe the unregulated part of the industry is. And in many to most instances, you’re dealing with people who know their city very well if you’re dealing with a taxi. . . . It’s a regulated industry with a huge supply. We don’t have to recruit supply. It’s a more stable model.

What do you see as your disadvantage in the market?

At an overall level, the regulatory system is a dual-edged sword . . . We’re on the right side of the law everywhere. That said, we don’t feel that it would make any sense to come up with rules to govern how we price, how we behave, et cetera. To the extent that regulators want to try to regulate us, that would be a bad thing.

How do you plan, as a new CEO, to do things differently at the company?

My main charter is scaling, to make sure that the technology that worked in San Francisco is applicable and scales, all while eliminating things like ridestacking [when drivers accept a ride through the app and then pick up a street hail], more integration with other systems inside the cab, making it much more bullet-proof and delightful for the consumer. The other part of it is dealing with the ecosystem in a very aggressive way and making sure our deployment into all the cabs in America goes as fast as possible.

Before they had this new competition, were taxi companies too lax in customer service?

Absolutely. Uber has been a godsend for the taxi industry. They’re starting to realize who they serve, the person who gets into the taxi. The service levels have gone up. The importance of hailing from a smartphone has been recognized. I think they’ve also unified the taxi industry. It’s been good for the taxi industry. Uber and Lyft have delivered very valuable service to everybody, despite the fact that one of them seems to be a company that only has sharp elbows.

This interview has been edited and condensed.

 

Write to Katy Steinmetz at katy.steinmetz@time.com.

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