Juno

What did it do?

Juno was a ride-hailing app operating in New York. It aimed to attract happier drivers by taking a lower commission than its rivals and announced that it planned to give half of the founding shares to drivers by 2026. The company was founded by Talmon Marco, founder of the messaging app Viber.

Why did it shut down?

Juno entered a market dominated by Uber and Lyft in New York alone, and in 2017, about a year after starting operations, it was sold to Gett. With the sale, the programme giving drivers shares ended, and drivers filed a class action against the companies. New York City Council's cap on vehicle licences in 2018, and its extension of that cap with new rules in 2019, changed the economics of the market. On 18 November 2019 Gett halted Juno's operations, citing these regulations, and formed a partnership with Lyft for its corporate customers. Juno then entered Chapter 11 proceedings with a view to liquidation.

The story

In February 2016 a beta test being run quietly in New York with 2,000 drivers leaked to the press. Soon the name behind the start-up emerged: Talmon Marco, founder of the messaging app Viber. The new company was called Juno, and its claim was clear: to win drivers by treating them better than Uber did.

Juno promised to take a lower commission than its rivals and to distribute half of the founding shares to drivers by 2026. CNN announced it as an Uber rival that said its drivers would own the company. Speaking to Pando, Marco said the drivers they had talked to felt enormous anger towards Uber. The company launched in New York in 2016. The Verge wrote that the app was trying to lure Uber drivers with a more ethical model.

But the independent journey was short. In 2017 Juno was bought by Volkswagen-backed Gett; Wikipedia puts the price at $200 million, TechCrunch at about $250 million. With the sale, the programme giving drivers shares ended. In June 2017 The Verge reported that drivers were suing Gett and Juno, both marketed as driver-friendly. In August 2017 Gett pulled its own app from US app stores and carried on in New York under the Juno brand. Gett's CEO Dave Waiser described the company as a solid number three in the market after Uber and Lyft; but according to TechCrunch, Gett had never expanded beyond New York in the US.

The rules in New York, meanwhile, were changing. In 2018 the city council capped vehicle licences for ride-hailing apps, and in August 2019 it extended the cap for a year and added new rules. On 18 November 2019 Gett shut Juno with immediate effect, citing regulations that had come into force in New York and which it considered misguided. It said drivers would be paid in full for completed trips and passengers would be invited to Lyft. Gett also formed a strategic partnership with Lyft for its corporate customers. Two days later Juno entered Chapter 11 proceedings with a view to liquidation.

Juno's story shows that a driver-friendly positioning does not remove the risks of scale and regulation against giant rivals.

Lessons for founders

• Distinctive promises such as equity for drivers damage trust if they cannot be kept when the company is sold; make such commitments legally binding.
• A business operating in a single city is fully exposed to that city's regulatory decisions; in big markets such as Istanbul, too, build the decisions of UKOME, the city's transport coordination board, and the municipality into your risk plan.
• An ethical positioning does not on its own solve the problems of unit economics and scale.

Sources

1. Juno (company) (Wikipedia)
2. Juno shuts down its operations in NYC as owner Gett signs strategic partnership with Lyft (TechCrunch, 2019-11-18)
3. Gett's Juno ends NYC ride-hailing services, citing regulation (Reuters, 2019-11-19)

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