Retail

When Restaurants Help Pick Up The Tab (For Rides)

Restaurants Help Pick up the Tab (for Rides)

Some ideas for a startup come from unexpected places – like the golf course. One entrepreneur dropped his daughter off at Coachella and went to go play golf. When he arrived at the 19th hole for a beer, he asked a member of the wait staff for a restaurant recommendation. The server suggested a particular restaurant – not necessarily because it had the best burgers or margaritas in town, but because the restaurant offered rides.

Kurt Brendlinger later became the founder and CEO of Freebird, which provides bars, restaurants and other businesses with technology to pay for their rideshare rides. “We created a two-sided marketplace,” Brendlinger told PYMNTS in an interview. That is, his company has consumers on one side and then any business that wants to use transportation to affect an outcome on the other. And the latter’s goal might involve customer acquisition, loyalty or another aim.

To use the service, a customer downloads the Freebird Rides app and logs in with their Uber credentials, and can then access different offers. In one case, a bar or restaurant will offer a customer, say, $10 cash back for their rides. If a customer chooses that offer, she can hit a button and Brendlinger’s app will make an application programming interface (API) call to Uber. In another case, the company offers a points program called Ride Anywhere that lets users earn rewards for any Uber ride booked through them.

Uber, in turn, sends a car that picks up the customer, who hops in one of the rideshares for a journey to the bar, restaurant or other establishment. The payment experience works similar to any other ride, as the customer pays Uber like she normally would. However, the customer later receives cash back after making a purchase at a business that has a cash offer and is connected with a Freebird-linked credit or debit card. According to the company, customers should see the cash back when the bank transitions the charge from pending to posted status.

The Business Model

On the merchant end, Freebird works on a pay for transaction model: The service charges clients for each transaction at a fee of $2 per car delivery. If the merchant has a $10 offer, the company would bill them $12. The merchant, in turn, pays the $12 through credit card or check (although Brendlinger said most merchants use credit cards, which the service prefers). The company keeps $2 as its fee and sends the $10 down its rails into the customer’s Freebird account. At that point, the customer can empty the account and receive the funds in cash.

When it comes to the benefits of the app, Brendlinger claims that when customers don’t have the burden of driving, “they end up actually spending more money.” At the same time, restaurants face another reality: the couch economy with its on-demand food delivery services. Brendlinger noted that restaurants may move a lot of food out the door through these kinds of services, but their margins are getting squeezed because the apps are expensive, and they’re not moving the high-margin alcohol.

Brendlinger sees his app as an antidote to get these consumers back out. “We’re now a tool to get people back into the stores,” Brendlinger said. Going forward, the company plans to look to other modes of transportation. Overall, Freebird is agnostic across the entire transportation space. He noted that scooters, for example, might be an interesting form of transportation for the company, and a sandwich shop might be able to put up a dollar for a scooter trip.

The future of services that help restaurants, bars and other companies pick up the tab for a ride, then, might not necessarily involve a rideshare, but could leverage new, emerging technologies in the shared economy.

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