EV Taxi Startup Revel to Lay Off Drivers for Gig Model

Move to Contractor Model Will Be Effective in September
Revel charging

[Stay on top of transportation news: Get TTNews in your inbox.]

Revel Transit Inc., the New York-based electric vehicle ride-hailing startup, plans to lay off its driver employees and operate a gig-work model more akin to rivals Uber Technologies Inc. and Lyft Inc. Drivers affected by the change will have the option of staying on with the company as independent contractors.

The move to a contractor model will be effective in September, the company said in an email June 6 to its 1,000-plus drivers. The drivers currently receive a fixed hourly rate and benefits without needing to bring their own car. Revel will also let existing and new drivers rent from its 550-EV fleet of Teslas at $10 per hour, and will compensate them based on trips they take.

The change “came in response to an overwhelming majority of drivers asking for more flexibility, which is standard in the industry,” Keith Williams, vice president of rideshare operations, said in the email. This included “offering drivers more control over where and when they drive, the ability to take breaks when and for how long they want, and for more lucrative bonuses that are easier to achieve.”

Revel started as a moped rental service in 2018, but has pivoted in recent months as it attempts to become profitable. Today, it focuses on building public EV charging infrastructure and operating a ride-hailing fleet. This new mission is more closely aligned with the City of New York’s mandate that all rideshare vehicles be zero-emission or wheelchair-accessible by 2030.

The company said it piloted its new contractor model in late February with 100 drivers, and has since signed up about a hundred more. Revel will still offer auto liability insurance, vehicle cleaning and maintenance, and a full day of battery charge for drivers renting from its fleet.

Revel hopes to attract drivers who are unable to earn money as Uber drivers, given that Uber has had a waitlist limiting new driver registrations since last April. The city has a surplus of more than 62,000 licensed drivers over vehicles available, according to 2023 data from the Taxi and Limousine Commission.

The company wants to further increase the supply of drivers by expanding the platform in 2025 to include any licensed rideshare driver with an EV. Applications for new drivers will open June 6. The policy terms imply that people already driving for Uber and Lyft could also pick up rides on the Revel platform.

“We’re just in a position we really never anticipated to be in so soon, where we can even broaden this to serve virtually all of the city’s for-hire vehicle drivers,” said Haley Rubinson, vice president of corporate affairs, in an interview. “When we launched in 2021, fewer than 1% of the for-hire vehicles registered were electric. Now over 10% are, so there’s so much momentum.”

Earlier this year, the Brooklyn startup was seeking to raise $200 million to build out its charging network in major U.S. cities, as electrification mandates from California to New York have prompted more rideshare drivers to use EVs.

Want more news? Listen to today's daily briefing above or go here for more info

Revel has a pipeline of more than 500 charging stalls under construction in New York and the San Francisco area through 2025. It struck a deal with Uber in March to guarantee usage of its charging stations by offering exclusive discounts to drivers.

The growth that Revel expects to see from this latest pivot will help it get closer to reaching profitability, Rubinson said, adding that the company was gross margin positive this year and is on track to be in the green, excluding interest, amortization and depreciation, by the end of the year.

“This change really just allows us to grow faster, and keep our eye on the ball on profitability, which continues to be of the utmost importance to us,” she said.