new products that can deliver enough substantial value to entice consumers to opt for a premium level of service. As an example, he points to the San Francisco startup MileIQ, whose app takes over the chore of tracking car mileage and adding up which miles can be used as a tax deduction or reported for reimbursement from an employer. It tracks 40 trips for free, then charges a small monthly fee to cover trips exceeding that number, Carolan says.
“After the first month of expense reports, it’s worth it to me,” Carolan says. (Carolan and Menlo Ventures are not investors in MileIQ.)
Like Sapphire Ventures’ Marakovic, Carolan says some companies cross over the boundaries between the consumer and business categories. For example, he calls MileIQ a “consumer-y enterprise company” because individual users of the app can opt to allow outside companies to send them ads and promotional messages. Marakovic uses the term “hybrid companies” to describe consumer apps that bring in little revenue from users themselves, but attract business customers willing to pay for access to those users.
I was curious about Carolan’s view of the future of companies like ride-hailing giant Uber, which has come under pressure to conform to labor regulations long applied to more traditional companies.
Some of its drivers sued the company in an attempt to win the status of employees rather than remaining independent contractors. In April, Uber agreed to pay $100 million to settle that suit, but did not yield to the drivers’ demand to become Uber staff members. However, the settlement doesn’t permanently resolve that issue. Over time, and with pressure from governments and labor, could the company eventually become like a very large, regulated taxi company with unionized workers?
“I think it’s probably headed the other way,” Carolan says. He sees some regulations becoming obsolete, predicting that consumers who like the service will side with Uber. Carolan isn’t without sympathy for the taxi drivers who have put in substantial amounts of time and money to earn a “medallion” that authorizes them to cover a certain city or region, only to see ride-hailing companies erode the value of those credentials. “It’s sad, they’re now worthless,” he says.
But in Carolan’s view, Uber is changing the world for the better. “It’s making transportation as ubiquitous as water,” he says.
