Why ride-hailing app Fasten couldn’t make it against the big players

What a difference a year makes, especially for up and coming ride-hailing app Fasten.

Last year the tech, media, and music conference South by Southwest was a ride-hailing nightmare, with Uber and Lyft no longer operating in Austin, Texas, over issues with fingerprint background check requirements.

This gave smaller wannabe ride apps the perfect opportunity to show off different platforms and demonstrate what rides could be like in a Uber-less world. Fasten — which started in Boston in 2015 — swooped into the Austin opening.

But Uber and Lyft were allowed back into the Texas capital a few months after the festival, and what do you know, late last week the Boston-based startup announced its sale to Russian ride-sharing company Vezet Group.

As of Monday, Fasten will no longer operate in its American markets: Austin and Boston. Instead, its tech has been absorbed to launch the app in cities like Krasnodar and other Russian markets. This is a major blow less than a week before hundreds of thousands descend into Austin for the annual SXSW confab.

At last year's SXSW festival, my colleague Kerry Flynn spoke with Fasten CEO Kirill Evdakov, who said they were cornering the Austin market against other small competitors like Ride Austin (which is still operating in its namesake city). It was an optimistic moment.

"We saw opportunity to do something good here. Multibillion companies have been built on top of drivers who do all the work. Why would we take a quarter out of each driver’s dollar just because we can? We recognized the mistakes that Uber and Lyft were making. We saw room for a company for putting people first," Evdakov said last March.

Fast-forward to this March when Evdakov said in a release: "We hope that we’ve left our mark on the ride-hailing industry here..." A blog post about the acquisition started with, "With heavy hearts..." The Fasten app had 1.1 million downloads since its 2015 launch and before its shut-down was at 50,000 monthly active users, app data firm Apptopia found. Ride Austin has an estimated 331,000 downloads.

Rideshare Guy blog founder Harry Campbell said in a call Monday that Fasten was one of the few startups nipping at Uber and Lyft, especially in Austin. But overall, "it's tough for these other competitors to stand out from Uber," Campbell said. "There's not a lot to differentiate service on." He said all the apps look more and more similar, and pricing is so competitive it's hard to get an edge.

Lyft may be Uber's runner-up, but it's still a huge force to reckon with, given its 24-hour service across the country and affordable rides. That's making it even harder for small apps like Fasten to have a chance. "Lyft has positioned itself as the driver-friendly alternative," and consumers conscious of company culture have already made the switch from Uber to Lyft, Campbell said. It leaves little for the Fastens out there.

In what can only be a final dig at Uber, the Fasten co-founders said in the post, "We ask that you make a conscious choice when it comes to ride-hailing... our hope is that you’ll continue to think about the drivers who are doing this to make ends meet and of how rideshare companies treat their people."

It's funny timing with an MIT study out showing that drivers make paltry wages, even if Uber's new CEO Dara Khosrowshahi adamantly refutes the findings.

As to what happened to fellow ride-hailing app newcomers who briefly saw what Austin could be, Wingz and Get Me are still chugging along, but barely make a dent in the mainstream ride-sharing world. Another small competitor, Fare, drove off into the sunset last June.

With Uber and Lyft dominating, it's hard to make it to the first mile marker, let alone finish the race.