Fasten and its founders, Kirill Evdakov, Vlad Christoff, Roman Levitsky, and Evgeny Lvov were faced with strong competitors namely, Uber and Lyft, but they were set out with a more unique vision. They challenged the rideshare giants by offering their drivers and riders transparency with a strategy of keeping fares low and only charging a 99 cent flat fee to the drivers offering their service through the app. Should Fasten expand to other cities and globally?
Feng Zhu; Angela Acocella
Harvard Business Review (616062-PDF-ENG)
May 23, 2016
Case questions answered:
- What is the background of the case study?
- List the issues found in the case study.
- Provide a Porter 5 Forces / Strategic Analysis or Industry Analysis of Fasten and tie it back into the applicable issues found in question 2.
- What are some recommendations that you can provide? Use a solutions map.
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Case answers for Fasten: Challenging Uber and Lyft with a New Business Model
Background – Fasten Company
Fasten is a start-up company based in Boston that stemmed from experience in Russia’s ridesharing concept. Fasten entered the ride-hailing market in 2015 and the company employs regular people to ferry passengers in the comfort of their own car. The entire process can be done with a single app. The founders, Kirill Evdakov, Vlad Christoff, Roman Levitsky, and Evgeny Lvov were faced with the obvious competitors Uber and Lyft, but they were set out with a more unique vision.
They challenged the rideshare giants by offering their drivers and riders transparency with a strategy of keeping fares low and only charging a 99 cent flat fee to the drivers offering their service through the app. Many would see Sidecars exit as a discouragement to enter the ridesharing scene, but Fasten saw it as an opportunity because the number three spot is now open following Uber and Lyft. They even saw some of the challenges that the companies face as a stepping-stone for their own entry. In 2016, Fasten had become the first profitable ridesharing company in the world.
The case takes place from when the company was founded in 2015 to 2017. The key players, in this case study, involve the founders which include Evdakov, the COO, CMO, and Chairman.
Other key players, in this case, would include Fasten’s competitors, Uber, Lyft, and Sidecar. Issues that arise at the organization is the competition with other ridesharing companies in the industry like Uber and Lyft. Should Fasten expand to other cities and globally? Another emerging issue is the privacy of the customers using the app.
These customers include both drivers and riders that are concerned about the security of the company when they are giving up a lot of their personal data. How can Fasten assure their drivers and riders that they have a high sense of security? The last challenge that was found in the case is how Fasten will continue to offer good service during high demanding times. Its competitors are facing the issue and were forced to change their strategy by increasing their prices with a multiplier that is as expensive as hailing a taxi cab.
1. Fasten is doing well in its operating cities like Austin and Boston, but it will eventually be stagnant if the company does not expand into other U.S cities and globally. The market saw the third-largest rideshare company, Sidecar rapidly decline and eventually exit due to the intense competition, cutthroat poaching practices, and ongoing legal and regulatory battles. If Fasten does not make a big move, their…