An on-demand ride-hailing startup with a business model decidedly different from Uber Technologies Inc. and Lyft Inc. is taking them on in their backyard.
Alto launched service in Silicon Valley on Tuesday, making it the sixth U.S. market for the company that decided at its inception to differentiate itself by hiring drivers as employees instead of adopting the gig-economy model of treating them as independent contractors. That business model abides by California law, which Uber UBER, +7.63% and Lyft LYFT, +5.97% have tried to subvert with a ballot initiative that was voted into law, but which the companies are now fighting to uphold after a judge declared it unconstitutional.
Will Coleman, chief executive and co-founder of Dallas-based Alto, said in an interview with MarketWatch that the startup will start off mostly in Palo Alto, Redwood City, San Mateo and Burlingame with about 50 vehicles, for which it is hiring about 100 drivers. The company, which was founded in 2018, also operates fleets in its hometown of Dallas-Fort Worth, plus Houston, Miami, Los Angeles and Washington, D.C.
“We have big plans for expansion for the rest of the year,” Coleman said, adding that he expects Alto’s service to expand to other parts of Silicon Valley as demand grows. He wouldn’t disclose how many more and which markets Alto is entering in the near future, but said he expects to “at least quadruple” the size of his company’s total headcount of 1,200 this year.
Alto’s entry into Silicon...
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