Luxe Makes it Exciting to Drive Again
Introduction by Angel Damion Robles
You may never circle the block again.
Convenience has morphed itself into a string of services that provide persons who are willing to do the things you don’t want to which is a business model we can’t complain about. Unless you like to drive.
The common start up today involves forms of taxi services and shuttles that make it easy to get from point A to point B with a tap, but if you’re anything like I am, you love to get behind the wheel. Driving yourself is one of the few activities you’ve built up toward, studying for your driving test which you can get Driving test tips for at Master Driving School, saving for your first car etc. So why forfeit that luxury for an expensive alternative like a taxi?
Luxe understands that driving is what you enjoy doing. As for the cons, parking, running errands, getting back to your car after a day of exploring the city. These make people avoid driving, especially in condense cities like San Francisco. Luxe gets rid of those cons by doing them for you!
Our TechDrive team was lucky enough to visit the new Luxe headquarters, and talked to CEO of Luxe Curtis Lee which you can see below.
TD: Do you have any formal relationship with your valets?
The valets are independent contractors. We have recruited them from a variety of sources: jobs boards, craigslist, university job postings, from friends of friends.
TD: How many garages are you currently partnered with in SF, and how did the process of acquiring them work?
We have have about 30 garages all through out the city. The process of acquiring them is twofold, we informally reach out to the smaller garages, a lot of which are owned by mom and pops, who usually own one or two locations. Then there is a more formal relationship that we have with national parking providers. There is a large consortium of companies that own a vast majority of parking lots throughout the entire United States, and we worked with almost all of them. As we started to prove out the business case with them, in return they started to open more inventory for us. Because really what we are providing is the ability to be their priceline for parking spaces. They have all this inventory that they need to use for that day, and if they don’t use it that day, they’ll lose out on a lot of money. In the end it becomes expired inventory for them. I think the garages are seeing our approach, and understand that we can help them with their inventory, and in return they make a lot of incremental revenue.
TD: How fast do you see Luxe spreading to other areas of the city, and do you plan to go International?
Luxe is getting pulled into a lot of cities. We tend to look at where are tweets are coming from, and some people are very explicit like “Come to New York, or Come to Philadelphia.” We get a lot of those, and we get messages on our website where people can message us as well. Right now, we are definitely seeing a pull from international countries. Just this week we got a write up from someone in Manilla, saying Luxe is the type of solution we need because of the parking crunch over there.
Our service definitely works in large metropolitan cities in the U.S., but also in smaller sub cities like San Mateo, or Los Altos because there is a lack of parking, and the city doesn’t want to build these huge 3 or 4 story parking structures . We allow the local businesses to thrive, because that’s the number one thing they request, which is parking. Parking has the most fundamental affect on their business. In the smaller sub cities, we can create a system where we can park on the fringe areas and have our service take people in and out of the main arteries of the city, and the local businesses can still make money. For us, we do want to be in every major metropolitan city in the world. We are starting domestically, but we are keeping an eye on our international opportunities as well.
TD: What extra services does Luxe provide? Are you planning on adding any more?
We do car washing, gas, oil changes, and anything that involves any type service. Part of our thesis is that your car is like a urban locker, so you can do a bunch of things. For example, during the holidays we did a food bank service, where you could leave your can foods in your car, and we would help you take your donations to the food bank for you. Later, that translated into clothing for us, and now we provide washing and laundry services, and dry cleaning. We recently teamed up with Rinse to provide that kind of service, and we’ve also teamed up with Munchery to help deliver foods to your car. In return, we end up providing a lot of reach for these businesses because a lot of our customers don’t live in the city. It is basically us making value and use of an unused asset which is your car, and that is a general theme that we want to continue to propagate.
TD: Who do you think is your major competition right now?
Honestly, I would have to say it is the lack of awareness right now. Once people do find out about our service, they are very impressed and end up using it. But there are still a ton of people who are still using parking lots, and have no idea this type of service is available. In San Francisco we do have more brand awareness, but in other cities where we are just getting started, many people still don’t know this type of service even exists. For us right now, it is just getting our name out there. We don’t have any direct competitors that are impeding our business right now. Luxe needs to get into the main conversations people are have when they are talking about transportation. We are getting there.
TD: For such a young company, how were you able to raise money so quickly?
We started the business two years ago, and actually just hit our 2 year anniversary. We did a private beta, and launched it April of last year. My background is in product, and my co-founder’s background is in engineering, and most of us think in product engineering terms. Basically, we ran a 6 month private beta just to test the service out. Both of us had made a lot of assumptions, and at that time we were basically flying by the seat of our pants, so we had a lot to find out. We wanted to look at what the adoption rates were, wanted to see if people were engaging with the app, if there were repeat rates, as well as operationally how it worked. And once we were satisfied with the way it worked we officially launched in October. It’s been a crazy ride.
The thing that has attracted a lot of investor dollars is mostly around the fact that we are in such a huge industry. The industry alone globally is about $100 billion, and in the United States, it’s $30 billion just around the parking industry alone. And, if you incorporate street parking as well, it is much bigger. So you are taking this multi-billion dollar industry that has no technology so to speak of, and your creating a consumer experience that is better than the rest. You get to go to a location, have the option of picking up your car in a different location, and also get your car washed, and cleaned, then dropped off. It’s a killer experience. I think that definitely was the appeal to a lot of early investors. The investors also took a look at our early numbers which showed that people were using our app more than twice a week, which was twice the rate that people were using Uber. We also had high engagement rates, and people were loving our app. Basically, it was a novel approach to a huge industry which lead to the large investments.
TD: Can you discuss any failures or setbacks you experienced and how you overcame them?
You have to have thick skin to do this job, and there will always be failures along the way, and you just hope that none of those failures will kill your company. For us there were a ton of things in the early days, when we were just testing a bunch of things out still. Lucky for us, we’ve never had anything happen where we lost someones car, or completely destroyed a customers car. There were little things where we had instances where we did not properly match valets with customers, and our ETA was a bit off for awhile because we were using Google’s algorithms which wasn’t exact for our business. I also think that we were a little slow to respond to expanding to other cities, we could of been faster. But for the most part, I think we have been doing a fairly good job to what we’ve been given.
TD: How might automation effect Luxe’s business model, and how does Luxe see itself adapting to a new era of self-driving cars?
This is a question that we get a lot. What we’re building is not just a service but it is all the technology that enables cars to be routed properly to parking spaces which we have inventory of. So that whole system of knowing how many spaces are available in that one location, how to route a car perfectly there, and then doing all the additional services, all that is technology we built can be actable to self driving cars. If you own a self driving car and want to drive to San Francisco, sure you won’t be driving by yourself, you’ll have your car drive. But then you’ll need to get up and go to work, so where is that car going to go? I definitely think that all the interesting routing technology can definitely be used in that space.
I am probably a minority in the Silicon Valley environment but I feel as if the self driving car as the main vehicle of transportation is still a ways away. Will see what happens, but again our system is not just about parking, but creating a service platform, it’s just so happens that we are parking your car right now.
TD: What’s your best piece of entrepreneurial advice in one sentence?
I am a big believer in doubling your strengths, and not trying to focus so much on your weaknesses.