Revel to lay off 1,000 staff ride-hail drivers, saying they’d rather be contractors anyway

New York-based Revel has made a lot of pivots since initially launching in 2018 as a dockless e-moped sharing service. The BlackRock-backed startup briefly stepped into the e-bike subscription business. It launched and now operates a handful of electric vehicle charging stations across the five boroughs. And it started an all-Tesla, all-employee ride-hail service, in part so its charging infrastructure would see guaranteed utilization. 

After dropping the moped-sharing business in 2023, Revel is pivoting once again to abandon one of the main things that made its ride-hail service unique: The startup is laying off its 1,000+ drivers and embracing a gig worker model similar to that of rivals Lyft and Uber.

The move comes after Revel successfully piloted the model in late February with 100 Revel drivers and has since brought on 100 more.

“The reason we ran this pilot in the first place was just increasing feedback from our driver pool, as well as in our recruitment efforts,” Haley Rubinson, vice president of corporate affairs at Revel, told TechCrunch. “The leading reason people didn’t want to join Revel was the lack of flexibility.”

Rubinson, who was Revel’s first hire, said that drivers were initially attracted to the platform because they didn’t want to deal with the hassle of owning or renting their own vehicles, buying insurance, and managing their own expenses. Drivers have also told TechCrunch that filing their 1099 taxes can be frustrating. But now, Rubinson says, Revel is having trouble recruiting drivers to its platform. 

“We have to be responsive to what the industry is telling us,” said Rubinson. 

In the email sent to employees that TechCrunch has viewed and Bloomberg first reported on, Keith Williams, vice president of ride-share operations, said that four out of the five drivers who piloted the gig worker model would recommend the program.

The question of flexibility has been at the heart of the debate over whether ride-hail drivers should be classified as gig workers or employees. If salaried employees are in fact asking to be made into contractors, Revel’s switch could lend credibility to arguments made by Uber and Lyft as the companies fight across the country to maintain their current gig worker models. 

“Now there really is the opportunity to serve more of the city’s for-hire vehicle population,” said Rubinson.

Current drivers on Revel’s payroll will have the option of staying on with the company as independent contractors after September 12, when the switch will take effect. Drivers can sign up to rent from Revel’s fleet of Teslas for $10 per hour, which includes auto liability insurance, vehicle cleaning and maintenance and a full day of battery charging. 

In 2025, Revel will open up the platform to drivers with their own EVs, giving the startup an asset-light way to grow the business and offer riders a better service. Revel has made over 2.5 million rides with its fleet of 550 Teslas, but customer wait times have been a problem with such a small fleet. Especially when compared to Uber and Lyft, whose driver numbers are collectively over 100,000 in NYC, according to the companies. 

That said, Rubinson says Revel’s ride-hail portion of the business recently hit gross margin positivity and was tracking to be EBITDA positive by the end of the year. 

The increased fleets may also help Revel with its actual long-term bet — EV charging infrastructure. In 2022, Frank Reig, Revel’s CEO, told TechCrunch that over 90% of its charging hub utilization came from Revel’s own ride-hail fleet. That number has since shifted to about 50% as EV adoption increases, according to Robert Familiar, Revel’s senior corporate affairs manager.

Revel has three active EV charging hubs in NYC — two in Brooklyn (Bed Stuy and South Williamsburg) and one in Long Island City, Queens. The startup aims to launch another hub this summer at Pier 36 in Lower Manhattan right off FDR Drive, a highway that runs along the East River. Rubinson said Revel also plans to launch three more: One near LaGuardia Airport; another in Maspeth, Queens, that’ll be the largest site with 60 plugs; and another in the Bronx. 

Outside of New York, Revel is eyeing San Francisco and Los Angeles. 

In total, Revel has raised around $214 million since its launch, per Crunchbase data. TechCrunch has reached out to backers at BlackRock, Toyota Ventures and Maniv to learn how investors view the startup’s latest shift but did not hear back in time.