New York-based Revel has made a lot of pivots since it first launched as a dockless electric moped-sharing service in 2018. The BlackRock-backed startup briefly ventured into the e-bike subscription business; it launched and currently operates several electric vehicle charging stations across the five boroughs; and it began offering ride-hailing services for its entire workforce, all with Teslas, to guarantee access to charging infrastructure.
Revel, which discontinued its moped-sharing business in 2023, is now pivoting again and abandoning one of the key elements that made its ride-hailing service unique: The startup has laid off more than 1,000 drivers and is adopting a gig-worker model similar to rivals Lyft and Uber.
The move comes after Level successfully trialed the model with 100 Level drivers in late February and has since recruited a further 100.
“The reason we did this pilot in the first place was to get more feedback from our driver pool and to accelerate our recruiting efforts,” Revel's VP of corporate affairs, Haley Rubinson, told TechCrunch. “The main reason people were reluctant to join Revel was the lack of flexibility.”
Rubinson, Level's first hire, said drivers were initially attracted to the platform because they didn't want to deal with the hassle of owning or renting their own car, buying insurance, paying 1099 taxes and managing their own expenses. But now, she said, Level is struggling to recruit drivers to the platform.
“We have to respond to what the industry is telling us,” Rubinson said.
In an email sent to employees seen by TechCrunch and first reported by Bloomberg, Keith Williams, vice president of ride-sharing operations, said four in five drivers who have piloted the gig worker model would recommend the program.
The issue of flexibility is at the heart of the debate over whether ride-hailing drivers should be classified as gig workers or employees. If salaried employees are in fact asking to become contractors, Revel's shift could lend credibility to the companies' arguments as they fight across the country to maintain their current gig-worker models.
“Now we have a real opportunity to serve more of the for-hire riders in the city,” Rubinson said.
Drivers currently on Level's payroll have the option to remain with the company as independent contractors after the switch takes effect on Sept. 12. Drivers can rent Level's fleet of Teslas for $10 per hour, which includes auto liability insurance, vehicle cleaning and maintenance and daily battery charging.
In 2025, Revel will open its platform to drivers who own their own EVs, giving startups an asset-light way to scale and better serve passengers. Revel has provided over 2.5 million rides across its 550 Tesla vehicles, but its small fleet means customer wait times are an issue, especially compared to Uber and Lyft, which have hundreds of thousands of drivers in New York City.
That said, Rubinson said Revel's ride-hailing division recently achieved positive gross margins and is on track to be EBITDA positive by the end of the year.
The growing fleet could also help with Revel's actual long-term bet: EV charging infrastructure. In 2022, Revel CEO Frank Reig told TechCrunch that over 90% of the utilization of its charging hubs came from Revel's fleet of ride-hailing vehicles. That figure has since shifted to around 50% as EV adoption increases, according to Robert Familiar, senior corporate affairs manager at Revel.
Revel has three EV charging hubs operating in New York City: two in Brooklyn (Bed-Stuy and South Williamsburg) and one in Long Island City, Queens. The startup plans to open another hub this summer at Pier 36 in Lower Manhattan, just off the FDR Drive freeway along the East River. Rubinson said Revel plans to open three more hubs: one near LaGuardia Airport, one in Maspeth, Queens (which will be the largest site with 60 plugs), and one in the Bronx.
Outside of New York, Revel is looking at San Francisco and Los Angeles.
In total, Revel has raised about $214 million since its founding, according to Crunchbase data. TechCrunch reached out to backers BlackRock, Toyota Ventures and Maniv to see how investors view the startup's latest changes, but did not receive a response in time.