Immigrant-owned rideshare company Hich says it’s ready to launch service in Minneapolis

As the fight over a Minneapolis rideshare ordinance heated up in 2023, Mustafa Sheikh followed the debate from a bustling city in the Ethiopian highlands.

The Somali refugee had spent more than two years as an Uber driver in San Diego. He was working in Jijiga, Ethiopia, to get a new rideshare service, Hich, off the ground.

And he and his partners saw an opportunity for an app that would give the largely immigrant and East African drivers in Minnesota a bigger piece of the pie.

On August 15, Hich will roll out service in Minneapolis, St. Paul and, if it completes the permitting process, at the Minneapolis-St. Paul International Airport.

Hich is one of three smaller rideshare companies to launch in the Twin Cities since early May. All three face a changed landscape since the Legislature approved an end-of-session deal that will keep Uber and Lyft from leaving the state.

Sheikh said he and his five business partners have spent as much as $400,000 to get up and running in Minnesota. After eight months, he has 300 drivers prepared for background checks and expects to have at least 250 available by launch day.

Hich initially planned to charge drivers $200 a month, or $9.99 per day to use the app. But the company now plans to give drivers three months of free access while it sorts out pricing.

Drivers would keep all passenger fares. And they would have a chance to buy ownership shares in the company.

It’s part of a model that Sheikh calls “conscious capitalism.”

“There’s a way I can make money,” Sheikh said. “And I can make my investors money without stepping on the workers.”

A cold welcome

A serial entrepreneur with a scholarly bent, Sheikh has a habit of quoting history, philosophy and business tomes and starting texts with book recommendations.

But when he arrived in Minnesota last December to open a Hich office in Bloomington, he found a chilly reception.

Drivers laughed in his face. City officials discouraged him from spending the thousands required for a transportation network company (TNC) license.

“A lot of people were laughing at us, even in my community,” Sheikh said.

Drivers couldn’t believe someone like them — Black and Muslim — wanted to compete against “multi-billion-dollar giants” like Uber and Lyft, Sheikh said.

To combat this, Sheikh faced drivers head on. He met many of them while they were out taking rides at the airport. His experience driving for Uber in California from 2016 to 2018 proved pivotal to connecting with them.

He understood both the flexibility that attracts rideshare drivers and the way they often had to be strategic to unlock bonuses for a decent hourly wage.

“I’m a morning person so I’d get up in the morning before I go to work. I do like 4 a.m. to 7 a.m. and then I will make a good wage for those hours,” Sheikh said, describing his time as a driver.

After months of meeting drivers and talking to some of them in their native languages, some began to come on board.

Abdisalan Alinur, a full-time rideshare driver for the past six years, said his earnings have dwindled in recent years even though he’s working 80 to 90 hours a week.

“Mustafa came to me, so that’s something different,” said Abdisalan, who has signed up to drive for Hich.

The second challenge Sheikh faced was what he referred to as “city bureaucracies” when applying for licenses.

“You’re talking to a government official that makes you feel like they’re discouraging you from even coming in,” Sheikh said. “I have to joke like ‘if I lose money, don’t lose money it’s not really for you to tell me.’”

Hich was approved to operate in Minneapolis in early July, but Sheikh said he wanted to wait to get clearance to operate at the Minneapolis-St. Paul International Airport and St. Paul before taking the first rides.

While Hich Minnesota has done very little marketing so far, Mustafa said the company, which has five full-time employees and five interns, plans to work with a local marketing company once the app goes live.

“Projections are very conservative. You know, the first month if we do 30 rides [a day], we’re happy. Second month if you double that, we’re happy,” Sheikh said.

As he builds a passenger base, Sheikh said he knows drivers will continue using other apps.

“I welcome it, because if I tell the drivers to turn your Uber app off how are they going to pay their living?” Sheikh said. “If Uber retaliates, it will test this whole concept that they’re independent drivers.”

Kafi Ali, a nursing student turned rideshare driver, said he’s appreciated the transparency and features he’s seen from Hich and hopes to grow with the company.

One of the features he hopes to take advantage of is the feature that could see passengers pick their favorite drivers for trips.

According to Kafi, ever since the debate about driver pay came up, the number one question he fields from passengers is about how much he is getting paid, and in return they’re showing him how much they’re paying.

“So the riders are more interested in the drivers especially because the driver is the one who’s getting them home,” Kafi said.

Sheikh said there’s room in the market for the rideshare giants as well as smaller players like Hich. And he said some of the smaller apps could see a bump in December, when the statewide pay floor goes into effect — if drivers aren’t satisfied with the results.

“My idea is the cake is here, it’s enough, we know you can share this cake in a way that sustains the market and the people,” he said.

Two other alternatives

Two other rideshare alternatives are already up and running in the Twin Cities.

MyWeels has been approved for an TNC license in Minneapolis, St. Paul and the airport.

Owner Elam Baer, said his business now has more than 300 drivers, which is in line with the conservative approach he initially planned to take .

“If you get too many drivers in relation to your riders, the drivers don’t have enough business to pay attention to you,” Baer said.

According to him, MyWeels gets about 75 ride requests per day and that number has been growing each week. His goal is to reach 300 rides a day by next summer.

“Shareholders are looking at it and saying, if we can get to that point, by June of next year, we’re all going to be happy,” Baer said.

That figure would represent a “break-even” point for shareholders, according to Baer, who said the business isn’t expected to turn a profit for its first two years.

Texas-based Wridz was licensed to offer rides in Minneapolis in mid-May. It recently received approval in St. Paul and is working towards approval at the airport.

Owner Steve Wright said the company has between 500 and 1,000 drivers but he said the company does not track how many rides the drivers deliver per day.

“We don’t make any money from the fares so why would we track the rides?” Wright said.

Wright said driver sign-ups have slowed recently. He expects there to be an increase in December once the new minimum-pay law goes into effect.

“So far we’re very happy with what’s going on in the Twin Cities region,” Wright said.

Wright said Wridz representatives would be in Minneapolis in the next few weeks to recruit more drivers.

On the horizon

Moov, owned by Murid Amini, was the first company after Uber and Lyft to apply for a TNC license in Minneapolis. Amini signed the application for Moov on March 16. However, he never paid the associated fee and thus was not approved.

Funding has been an issue for the local startup company, but not driver buy-in. According to Amini, more than 700 drivers have begun inputting their information into the app to begin driving.

Out of those, only about 200 have completed a full background check. Amini said funding via a local “venture capital firm” could be secured soon, but he declined to disclose more details.

His new goal is to launch his rideshare company by the start of the fall.

According to him, Moov has applications in place at St. Paul and at the airport but both also need application fees paid. The funding he’s seeking would pay all fees.

The last rideshare organization in the market, is a possible driver’s co-op owned and run by Minnesota rideshare drivers.

According to a news release in early July, nonprofit Nexus Community Partners and the Metropolitan Consortium of Community Developers are supporting a group of drivers as they establish their organization and create a long-term business plan.

The drivers are also being funded by a grant from the Bush Foundation. However a request for additional comment to the drivers committee by Sahan Journal was not returned. A spokesperson for the group said they’ve taken a pause on media engagements.

The post Immigrant-owned rideshare company Hich says it’s ready to launch service in Minneapolis appeared first on Sahan Journal .