Cargo Systems Inc. Turns Rideshare Vehicles Into Mobile Snack And Sundry Venders

Posted On: 8/17/2017

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The Traditional Honor Box Goes Mobile

NEW YORK CITY -- Cargo Systems Inc.'s new service puts in-transit essentials for purchase and fun freebies at rideshare passengers' fingertips, while building visibility for brands and revenue for drivers. Passengers of rideshare services like Uber and Lift use their phones (no app required) to buy convenience items like phone chargers, chips, gum and over-the-counter medicines on the spot.

Cargo officially launched its service in late June in New York and Boston, and will expand into other markets soon. It says it now has thousands of drivers who have signed up in 49 states and 10 countries.

"It's an open secret that rideshare will disrupt the logistics industry," said Cargo Systems cofounder and chief executive Jeff Cripe. "Cargo will connect millions of people with millions of products every day, across the globe. Products finding you in your moment of need is the ultimate convenience." 

Cargo's model is based on its "freetail" concept: a blend of free and retail products intended to create excitement and curiosity for passengers every time they hop into a vehicle. Cargo distributes free products on behalf of brands, including Mars and Kellogg's, which pay Cargo's distribution fee to reach consumers. For retail products, it takes a margin on all sold goods.

Logistically, the way it works is that Cargo sends a startup kit at no cost to the participating driver. It includes a prepacked display case with lighted interior that mounts over the center console, along with extra merchandise to replenish items as they sell. The box is also equipped with USB charging ports as an added passenger amenity. On the top of the display case is a URL and identification number that is different for each car.

Passengers go to the URL on their phones, enter the vehicle code, browse the menu and check out using a credit card or mobile payment option like Apple Pay. Once they pay, the driver gets a notification on his or her phone that the transaction is complete, and then passes the items back to the passenger. Drivers get a cut for each of the products sold in their cars.

Cargo says it's one of few startups with access to Uber's driver API, and that its gives preferred access to drivers who sign up using their Uber profile. Its software tracks orders as they're distributed in real time and automatically adjusts inventory to align with top sellers in the next shipment sent directly to the driver.

"We look at the performance over time for each driver and what is turning, and what we are testing that's new and distributing for free," Cripe explained. "Over time, we know what's best suited to the part of the city and time of day they drive. They never have to make the merchandising decision or reorder in time; we deliver what they need when they need it. They focus on being a driver and we do the heavy lifting. It's just like an extra business in a box for them."

Cripe and fellow former Birchbox employee Jasper Wheeler founded Cargo last year in New York City. Birchbox, also based in the Big Apple, pioneered the subscription sampling-box concept to connect brands, and inspired Cargo's founders to take the concept on the road.

Two of members on Cargo's advisory board are vending and micromarket industry figureheads, Vistar chief executive Pat Hagerty and 365 Retail Markets' chief executive Joe Hessling. The company is venture-backed by Techstars Ventures, Fontinalis Partners, Detroit Venture Partners and Rosecliff Capital.