This Israeli Ride-Sharing App Is the Utopian, Hippie Uber
Uber, in many ways, embodies hyper-capitalism. The app’s “surge pricing” algorithm, which automatically raises fees when the weather is bad or demand is high, is a constant source of sticker shock and an occasional source of outrage. Some critics say the company is squeezing driver pay, others that it’s running roughshod over government regulators. Travis Kalanick, Uber’s confrontational chief executive officer, compares his job with running for public office, and it hasn’t been a smooth campaign. Protesters have disrupted corporate events, marched outside the San Francisco company’s headquarters, and interrupted an interview with Kalanick during the Sept. 10 taping of Stephen Colbert’s new late-night talk show.
Halfway across the globe, Shay Zluf says he’s hoping to create the anti-Uber. In Israel, the former yoga instructor co-founded La’Zooz, a sort of cooperative ride-hailing service. Through the organization’s app, volunteers give people lifts in exchange for tokens they can later trade for rides. The group behind La’Zooz talks a lot about “community responsibility,” alleviating city congestion, saving the environment, and the “fair share of wealth.” “Just doing another application was not enough for me,” Zluf said. “What is important for me is to start a movement.”
To keep track of the online exchange of karma, La’Zooz began developing its own digital currency in 2013, based on the technology underpinning bitcoin. Apart from being used as a means to compensate drivers, Zooz tokens are given out to the 80 or so coders and other people who volunteer services to improve the app. One Zooz roughly converts to a penny; at the current rate, booking a ride through the app costs about a tenth the price of Uber, says Zluf, a 37-year-old former contract developer for EBay and Broadcom. La’Zooz has been testing the ride-sharing feature in Israel since July and plans to roll it out globally on Sept. 17. One message on the app’s website humbly declares: “The end of capitalism has begun.”
Israel is a fertile environment for this kind of idealistic twist on one of today’s hottest technology businesses. Not only does it house one of the most successful startup scenes outside of Silicon Valley, it’s one of the few developed countries in which hitchhiking remains a common way to get around in some communities. Israel was founded with socialist ideals, and in 2011, the rising cost of living sparked the largest public protests in the country’s history. Hundreds of thousands of people rallied to curb the political and economic influence of the country’s business elite. Zluf cites that movement as a source of inspiration for La’Zooz, which means “to move” in Hebrew.
Other ride-booking apps have set their sights on Israel for different reasons. The country’s large, affluent population has plenty of smartphones and disposable income to spend on taxis. The market was dominated` by a homegrown startup called Gett (formerly GetTaxi) until August 2014, when Uber began spending heavily to push its way in. Gett was Israel’s most-downloaded Android transportation app on most days in August 2015, and Uber averaged 10th, according to research firm App Annie. La’Zooz barely cracked the top 500 on a typical day. “We are aware of La’Zooz, and wish them best of luck and success,” said Li-or Avnon Solan, a spokeswoman for Uber. “Applications like La’Zooz not only demonstrate that there is consumer demand for a ride-sharing product but also that other companies share our vision of future mobility.” Google, which bought the Israeli navigation startup Waze for about $1 billion in 2013, started testing its own carpooling service called RideWith in Tel Aviv this summer.
It’s unlikely that La’Zooz will displace such established companies as Uber and Gett because its decentralized nature and virtually nonexistent marketing budget could make it seem unreliable, said Arun Sundararajan, a business professor at New York University whose recent research has focused on the sharing economy. “There are limits to how far a completely decentralized system like this could go,” he said. “People will still pay for better logistics, a more trusted system—those are still things that are better done by a centralized platform.”
While it won’t be easy for La’Zooz to break through, it’s starting to amass a fervent base of supporters. So far, about 2,500 people have signed up to use the app, which is available only on smartphones running Google’s Android software. Users have left enthusiastic reviews on the Google Play store and on Twitter, often throwing around such words as “revolutionary.” Bitcoin developer Jeff Garzik says a decentralized transportation app such as La’Zooz has the potential to “eat Uber and Lyft.” The trio behind the project has raised $120,000 from supporters and friends and has persuaded Ernst & Young to provide accounting services in exchange for digital tokens, said Zluf. Katherine Tarbox, a spokeswoman for Ernst & Young, declined to comment. Next, Zluf said, they are looking to raise an additional $1 million to develop an iOS version and more features.
Yechiel Yogev, a 37-year-old industrial engineer who lives in the northern Israeli city of Migdal HaEmek, is an early fan. He started a Facebook page to promote La’Zooz after discovering the app while reading up about bitcoin. Yogev used La’Zooz recently to catch a ride to Haifa, a city near Tel Aviv in which companies that include Google, Intel, IBM, Microsoft, Qualcomm, and Yahoo! have research and development facilities. “I turn on the app, and it’s just like hitchhiking. I used to love doing that as a soldier,” Yogev says. “Humanity at large needs to become more efficient by becoming more connected with one another.”