As Alto looks to become a nationally recognized name, it’s rolling out its fleet in a new market.
The Dallas-based ridesharing company is driving into Silicon Valley—marking its second market on the West Coast and, according to CEO Will Coleman, acting as the startup’s entrance into the broader San Francisco Area.
“Every market we go into, we had to learn something new, learn the dynamics of it,” Coleman told Dallas Innovates. “We tried to synthesize that understanding and build it into…applying it across the company.”
‘Ambitious growth plans’
Silicon Valley will be the sixth market for Alto, which operates differently than others in the industry by classifying drivers as W-2 employees and offering more luxury features. Following its first expansion outside of North Texas to Houston in 2020, it now has operations in Los Angeles, Miami, and Washington, D.C.
“We’ve got pretty ambitious growth plans,” Coleman said. “Our goal’s really to be everywhere.”
With plans to add six new cities this year and be in the top 25 metro regions over the next few years, Coleman said rolling out in new markets is more an exercise in timing than in site selection. In addition to hurdles like regulatory approval, he said the company is tracking COVID-19 recovery trends to look for areas of growth.
Going all-electric by end of 2023
As Alto adds new markets, the company is also pushing to be the first 100% electric ridesharing service, with a fleet of 3,000 EVs by the end of 2023. Coleman said the company is in talks with electric vehicle manufacturers, noting that Alto already has 900 EVs on order for 2022. Currently, he said the company has around 400 EVs and is expecting that number to reach about 1,500 by the end of the year.
With its fleet growing, the company is investing in the infrastructure needed to keep its vehicles on the road. Alto plans to build “EV Ops Centers,” facilities that provide fast charging, vehicle maintenance, cleaning services, and a driver’s lounge. The first will be built in Dallas, likely near Love Field Airport. Coleman says Alto expects to break ground in the next few months. From there, others would be built in existing markets and ahead of fleet rollouts in new ones. Coleman says the centers will be able to offer services to other electric vehicle fleets as well.
“We’re paying a driver, so we need to be earning. You need dedicated availability,” Coleman said. “So what’s really unique about our model is that we can bring both of these assets to bear for each other and support each other at the same time.”
Building a new Dallas HQ
The new fleet and operations centers aren’t the only things Alto is building. The company is currently building a new headquarters in Dallas’ Design District. While the company’s previous HQ was located in the district, its new one will nearly quadruple its footprint to 16,000 square feet. Coleman said Alto has nearly 1,500 total employees, with a corporate staff in Dallas of about 75.
Alto’s growth is being fueled by the $45 million Series B funding round co-led by Tuesday Capital and local firm Goff Capital that it landed last June—which brought the company’s total funding to $60 million since its launch in 2018. Coleman added that Alto’s B2B service, which it began amid the pandemic, now accounts for about 30% of Alto’s revenue. Without disclosing specific numbers, he said Alto has seen a 700% increase in year-over-year revenue.
“We want to be a nationally trusted brand. We want to be serving consumers, but also corporations and other businesses,” Coleman said. “And we want to prove that we can do that profitably, and also create a better outcome for the people that we employ.”
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