Even though the market has almost fully bounced back from its decrepit state that started with the economy collapse a few years ago, start-up businesses are still very hard to sustain in the current economy. That is plenty obvious from the myriad of businesses closing shop because of the inability to raise enough money to keep functioning.
One of the main reasons, although not the most important, is the oversaturation of businesses of the same type. When somebody comes up with a good idea, there are plenty of others that start up with the same basic premise, only slightly modified so as not incur legal penalties.
Of course, one of the best examples of this is Uber. A great many number of similar ride-hailing companies has appeared on the market after Uber became popular, and some are more successful than others. But it turns out that even some that used to be successful can’t keep up in the current state of the market.
To the dismay of parents all over the United States, Kids’ Ride Hailing Service Shuddle Shuts Down Today. After raising $10 million a year ago, the company could barely find any investors to keep from falling in debt, so the heads behind it decided it was time to say goodbye to the company.
According to Doug Alley, the CEO of Shuddle,
As we all have seen in today’s headlines, it is an extremely challenging environment for raising new capital. We worked hard with our existing investors to find new financial resources that would help us continue to grow. But, we could not raise the funding required to continue operations.
Interestingly, one of the main founders of Shuddle, Nick Allen, was also a co-founder and CFO at Sidecar, another Uber-like car-hailing service focused on carpooling that was forced to shut down last December and sell its team and its technology to General Motors after being eclipsed by Uber and Lyft.
For those of you not in the know, Shuddle was, or rather is until the papers come through, a ride-hailing company focused on children. What made them stand out was the amount of care put into checking up on their drivers, from intensive background checks to verifying whether they were speeding or even texting while driving.
The company also provided several other benefits to parents who wanted to use the service, including checking children out of school and other after school activities, taking them to playdates, and even offering carpooling so as to reduce prices. Many parents were depending on the service to handle their kids’ transportation needs.
Friday, April 15th will be the company’s last day, as they sent apologetic e-mails to all of their customers, letting them know about their cessation of services, thanking them for all of their support, and apologizing for any inconveniences they might be causing.
Image source: Shuddle