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Juno wants to woo Uber drivers with a more ethical ride-sharing app

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And I was the first user to hail a ride

Juno

It was a sunny afternoon in Manhattan and I needed a ride from Rockefeller Center to The Verge's office on West 40th Street. So, like thousands of people do everyday, I pulled out a smartphone, tapped an app, and requested a ride. Minutes later, a black GMC Yukon pulled up to the curb, driven by a chatty Senegalese immigrant named Amadou Gaye.

But the app I used wasn't Uber, nor was it Lyft, Gett, Via, Flywheel, Arro, Way2Ride, Curb, or any of the other dozens of ride-hail apps currently on the market. That's because the app isn't publicly available yet, not even as a beta version. This was Juno, the mysterious ride-hail app that has been generating some buzz as a fairer, more ethical alternative to Uber.

"This is my first ride."

On the surface, Juno looks a lot like Uber. The user interface is still being kept under wraps, but suffice to say it has all the tropes of the modern ride-hail app: miniature cars roaming across a smartphone-sized city map, estimated wait times, information about your driver, their car, their hack license, etc. Like many would-be Uber killers before them, Juno's operators think they have the secret sauce needed to beat the ride-hail giant. And they're going right for Uber's gigantic beating heart: its drivers. Men like Amadou Gaye: experienced, highly rated, but not particularly loyal to any one app.

"This is my first ride [with Juno]," Gaye told me. "I like it because everything was very clear." He gestured to the smartphone he had mounted on his dashboard. (Full disclosure: I only got to use Juno because I was riding with one of the company's employees. I'm told I was the first non-employee to use the service.)

Gaye said he has driven for Via, but primarily drives for uberBlack, the company's high-priced, luxury service. He keeps Juno's app turned on since attending one of the startup's orientation meetings about a month ago. He has a 4.8-star rating on Uber, which is exactly the type of driver that Juno is targeting. The startup is trying to recruit as many Uber drivers with ratings of 4.75 and above before it launches in New York City sometime this summer. When it does, it hopes to have thousands, if not tens of thousands, of Uber and Lyft drivers on its platform. It needs to in order to survive the shark-infested waters that is the ride-hailing market.

"When we looked at Uber, we saw an opportunity."

Gaye said he's a little skeptical that Juno will succeed in a market dominated by Uber. "Drivers don't like a lot of change," he said. "You show them an app, they like it, they want to stay there." Indeed, these past few years have contained enough tumult to last a lifetime. Many drivers are just now getting used to the new app-based status quo. And most customers would say they need a new ride-hail app in their life like Uber needs another round of VC financing.

For now, Juno's pitch is to the drivers, not the public. And the startup thinks the stars are aligned, with hundreds of Uber drivers chafing under the San Francisco-based company's dirt-cheap fares, as well as the nagging sense that being a driver in the gig economy, with its constant risk of deactivation, isn't as glamorous a job as they thought.

That's why Juno, which is the brainchild of an Israeli-American businessman named Talmon Marco, is selling itself as the pro-driver alternative. Marco took the money from the $900 million sale of his last company, VoIP app Viber, and sunk it into Juno. He has offices in Tel Aviv and the former Soviet republic of Belarus. Asked why a ride-hail app, and why now, he said, "When we looked at Uber, we saw an opportunity. The fact is they're not treating drivers right, and they're still not. So there's an opportunity for somebody like us."

We're standing in Juno's modest office on the 47th floor of One World Trade Center in Lower Manhattan. Juno is about to kick off one of its orientation meeting for drivers, of which it holds several a day. There's complimentary parking, as well as Juno-branded gift bags, selfie sticks (for taking photos of the arresting view), and the standard spread of pita chips, pretzels, and granola bars.

A flat-screen television is mounted on the wall displaying a map of the city with hundreds of tiny black cars inching along the streets. Marco explains these are all the drivers that Juno signed up so far. He zooms out and discovers a single car puttering around down in North Carolina. "I wonder where he's going," Marco muses.

So how does Juno plan to lure thousands of Uber drivers to your platform without any customers? For starters, Juno is offering drivers $50 a week just to keep the app turned on during their normal working hours. That's $200 a month for doing basically nothing. This is for several reasons: to collect data, to familiarize drivers with the app, but most importantly, to incentivize drivers to keep the riderless Juno on their radars. The startup is promising to take a smaller cut of each fare —€” 10 percent compared to Uber's 20 to 25 percent —€” for at least the first two years of operation. But the icing on the cake is Juno's equity offering: 1 billion of the company's founding shares reserved just for the drivers.

"A lot of companies may call you their partner," said Nicky Stanard, a Juno program manager, and a former Apple Store employee, who led the driver orientation the day I attended, "but we actually mean it." (Uber calls its drivers "partners," an allusion to the fact that they are independent contractors and not full-time employees.) Stanard added, "Juno is for the drivers."

"Juno is for the drivers."

Like Uber, Juno will offer three basic types of services: Bliss is the equivalent of uberX; Luxe is like uberBlack; and SUV is, well, an SUV. The startup says it won't have surge pricing to start out, but it will pay drivers "a surge fare" during periods of peak demand. (What that fare will be is something that is still being worked out.)

The company also promises a fairer rating system than other ride-hail services. Like Uber, riders will be able to rate Juno drivers, but every week the startup will roll off 5 percent of each driver's lowest ratings. Unlike Uber, drivers will not be able to rate riders, but they can block specific passengers from requesting them again. And also unlike Uber, Juno will allow its drivers to accept cash tips.

The 12 Uber drivers gathered around the table listening to Stanard's pitch were reserved. No one leapt to their feet in joy, but they seemed to like what they were hearing. More money? Sure, why the hell not. Many of their questions were fairly technical: Would Juno have its own lot at the airports? What about New Jersey, where ride-hail apps have been banned from the airports? What if a rider pukes in their car? Would Juno pay for the cleanup?

What if a rider pukes in their car?

There were no questions about their classification as independent contractors, a practice popularized by Uber, the granddaddy of the gig economy. Both Uber and Lyft are being sued by their drivers in California, who claim they should be classified as employees not contractors. Lyft settled its lawsuitUber's goes to trial in June. Meanwhile, Juno has no interest in upsetting that apple cart at the moment.

Nor were there any questions about what is arguably Juno's most attractive offer: 50 percent of the company's 2 billion founding shares reserved for drivers. Every three months for the next decade (assuming the company lasts that long), Juno will release 50 million shares to drivers, depending on how many rides they've completed. "You don't have to pay a cent for these, you've earned these shares," Stanard said. "The more rides you take with Juno, the more shares you earn."

To be sure, the money that drivers can earn from their shares will be dependent on Juno going public. So far, none of the major ride-sharing companies have taken the plunge. Lyft is valued at $5.5 billion; Uber a whopping $62.5 billion. Some experts wonder how much longer Uber can hold out before the company's investors begin to expect a return on their investments.

Marco said the idea for the equity plan stems from the growing belief that ride-hail drivers will someday be replaced by self-driving cars. Uber is developing its own autonomous vehicle technologyLyft is partnering with General Motors on its own program. The theory is that Uber's drivers, who lack a stake in that company, will simply be deactivated and cast aside in favor of robot cars. "But when we move to driverless cars, our drivers can take this financial benefit and still make something out of it, because they're still owners," Marco said. This sets Juno above its competitors.

"Offer me better money, and I'll go there."

After the orientation session, the drivers sat down with Juno employees to sign contracts and have their picture taken. "It looks promising," said Manuel Mena, who has been driving for Uber for a year and a half. Jose Pichardo, a five-year veteran of Uber, agreed, noting Juno's success will depend on its ability to attract riders. "The timing is good," Pichardo added, noting Uber's recent fare cuts. "I don't like [driving for Uber]. They don't care about their drivers."

This is exactly the type of anger and indifference that Marco is hoping to tap into with Juno. And if riders feel reticent about Uber's treatment of its workforce, there's no reason why Juno won't succeed. However, the gutters are lined with ride-hailing apps that have tried —€” and failed — to take on the Uber monopoly. Meanwhile, the San Francisco-based company has extended its tentacles into other markets like food delivery and logistics, despite lingering questions about labor and safety. It remains to be seen whether Juno's secret sauce —€” giving drivers more money, and even a little equity, but not the benefits and protections associated with full-time work — will appeal to consumers who have bought into Uber's ethos of transportation as easy and available as "running water." Most people just want a fast, clean ride... driver perks be damned.

Amadou Gaye, the Yukon driver who provided my first Juno ride, summed it up the best: "Drivers want freedom, but they also want to earn a good living. Offer me better money, and I'll go there."