# Shuddle (2014 – 2016)

- URL: https://girisimcikafasi.com/en/startup-graveyard/shuddle/
- Sector: Mobility and transport
- Country: United States
- Total funding: $12.2 million
- Cause of closure: Ran out of cash

## What did it do?

Shuddle was a ride-sharing service that let parents book rides in advance with specially vetted drivers to take their children to school, sport and activities. Charging a USD 9 monthly membership and fares around 15 per cent higher than UberX, the app also let parents track each ride in real time.

## Why did it shut down?

Founded by Nick Allen, a co-founder of Sidecar, the company launched in beta in the San Francisco Bay Area in October 2014 and raised USD 9.6 million in March 2015 in a round led by RRE Ventures. According to Engadget, it had received a cease-and-desist notice from California regulators in 2014 for not registering with TrustLine, the system that runs background checks on people who work with children. The service never expanded beyond the Bay Area; in November 2015 Allen stepped down as CEO and TechCrunch's sources said revenue had plateaued. Under the new CEO, Doug Aley, no new round was raised either. Saying it had been unable to find enough investment to keep operating, the company ended the service on 15 April 2016; total funding had stalled at around USD 12.2 million.

## The story

Shuddle was a ride service designed for children, founded by Nick Allen, a co-founder of the ride-sharing company Sidecar. The idea was to let parents who could not leave work send their children to school, practice or a playdate safely. Launched in beta in the San Francisco Bay Area in October 2014, the service built a model in which rides were booked between 24 hours and a week in advance, drivers went through a rigorous background check and parents could track the ride live. The great majority of the drivers were women.

In March 2015 it closed a USD 9.6 million Series A round led by RRE Ventures, with Comcast Ventures, Forerunner Ventures and Accel also taking part. At the time the company was working with around 200 drivers and said it had increased its ride volume fivefold during the beta. The USD 9 monthly membership fee and prices around 15 per cent higher than UberX were presented as the price of safety.

But the business did not grow as fast as expected. As Engadget reported, the company had received a cease-and-desist notice from California regulators in 2014 for not registering with TrustLine, the system that screens the backgrounds of people who work with children, and there were reports that it had not completed the registration. The service never expanded beyond the Bay Area. In November 2015 Allen stepped down as CEO; TechCrunch's sources said revenue had plateaued. He was replaced by Doug Aley, a former executive at Minted, Amazon and Zulily.

The new management could not find the money it needed either. On 14 April 2016 Shuddle announced it would close the next day, saying it had worked hard to find funding to keep growing but had been unable to raise enough investment to continue operating. Having raised around USD 12.2 million, the company ended the service on 15 April 2016 and said it would pay its drivers by 18 April. Shuddle's story showed that a promise of safety becomes a business only when it is combined with regulatory compliance and sustainable pricing.

## Lessons

- In a sensitive area such as child safety, treat regulatory registrations as part of the product; a disputed compliance issue directly undermines parents' trust.
- In a niche transport model that requires advance booking and a membership fee, demand is volatile; waiting for a new round before proving unit economics in one city is risky.
- A change of CEO when growth has stalled only delays the closure if the new management is not left enough time and cash to win over investors.

## Sources

- [Shuddle Raises $9.6M For Its Uber-Style Service For Kids And Seniors](https://techcrunch.com/2015/03/18/shuddle-raises-9-6m-for-an-uber-style-service-for-kids-and-seniors/)
- [Nick Allen Is Out As CEO Of Shuddle, Doug Aley Steps In To Lead 'Uber For Kids' Startup](https://techcrunch.com/2015/11/19/nick-allen-is-out-as-ceo-of-shuddle-doug-aley-steps-in-to-lead-uber-for-kids-startup/)
- [Shuddle, the Uber-like service for getting your kids around, is shutting down tomorrow](https://techcrunch.com/2016/04/14/shuddle-the-uber-like-service-for-getting-your-kids-around-is-shutting-down-tomorrow/)
- [Shuddle shuts down its 'Uber for kids' transportation service](https://www.engadget.com/2016/04/15/shuddle-ride-sharing-service-shuts-down/)