Three years ago, a startup called Miles launched a free app with the goal of becoming a kind of rewards program for all trips, with a focus on clean transportation. Cover enough ground by bike, bus, metro, or even on foot, and you’ll be rewarded with “miles” (aka points) that could be redeemed for perks at Starbucks or discounts on services like Audi Silvercar.
I was curious, so I used Miles for a little over a year. I was living in New York at the time and did a lot of walking and subway rides every day, with occasional trips by bike and bus. I was in a great place to rack up miles without having to change my habits, so I shook off the nasty feeling of letting another app know my location to see if that occasional free coffee was worth it.
It never was for me. While Miles had teased gift cards from places like Amazon, Target, and Starbucks, the rewards I saw were always far less appealing or tangible. Know all kinds of introductory offer announcements you hear in the middle of podcasts? These seemed to dominate the Miles app. I racked up thousands of miles but had next to nothing to spend them other than temporarily free or discounted subscriptions to services like Hello Fresh.
Now Miles says he’s about to change some of that. On Wednesday, he will announce a $ 12.5 million Series A fundraising round led by Scrum Ventures that includes Japan Airlines, TransLink Capital and a host of others. The funding will help the startup to create “Miles 2.0”, which will offer many new rewards and types rewards – like, possibly, PayPal credits, airline miles, or even cash.
First, however, Miles CEO Jigar Shah said The edge in an interview the company has already made many changes to the app, especially since early last year, when it was forced to reshuffle during the pandemic. With people all over the world isolating themselves, and both using public transport and as kilometers traveled by vehicles are decreasing, Shah says Miles began tweaking his rewards system to encourage outdoor activities he already followed where social distancing was possible (like walking, running and biking) . The Miles team also worked on creating new rewards that didn’t require going to physical stores. They brought in new partners, including streaming services like Disney Plus and FandangoNOW, as well as home delivery startups like wine company Winc.
“We went from almost 40 to 60 different partnerships in 90 days in March, April and May of last year,” says Shah. The Miles team has also started pulling other levers, like the number of miles it costs to redeem certain rewards. It also added a charity feature, where miles can be donated to nonprofits on the platform. If these nonprofits collect enough miles, they receive payment directly from the startup. (Thresholds and payouts vary by charity and are negotiated with Miles.)
All of these changes accelerated Miles’ overall growth last year and through 2021, Shah says. More and more people used the app and more of their miles were redeemed. Of the 12 billion miles collected by users to date, 3.5 billion have been redeemed for around 7 million rewards, he says. Miles also claims to have generated more than $ 200 million in revenue to date for its rewards partners. While it can be difficult to gauge these numbers, it is evident that they were at least good enough to convince investors to come together for a Series A round.
The miles have attracted new reward partners along the way, which Shah says may help resolve the issue I encountered with the app. On Wednesday it will announce even more, including Lego, Buffalo Wild Wings, Garmin, Sam’s Club, Chewy, Wayfair, Rover and HP. However, it still offers plenty of subscription services, as some of its more recent offerings include ButcherBox, Harry’s Razors, and Craftsy.
Shah admits that the balance was probably not right at the start. “I think [in the] early days we were building the market, and it all depended on the quality of the market [versus] the amount of the market, and I think we couldn’t fight both, ”he said. “And we chose quantity at that point over quality. “
The Miles pitch initially made in 2018 of constant location tracking in exchange for rewards raised eyebrows, to say the least. In theory, this idea was After heavy over the past three years as reports of Motherboard and The New York Times discovered how much of a black market there is for the precise location data created by our phones.
Miles maintains that he does not share any location data with his reward partners, and Shah takes his company’s position as an intermediary seriously in this regard. “They are not getting any data at the moment,” he said emphatically. “Even at the aggregate level, even at the anonymized level, they just don’t get anything. The only thing they get is to put a reward on our platform. As Shah explained in 2018, the selling point is that Miles created a “predictive marketing AI platform” that is supposed to match users with appropriate offers based on their behaviors – kinda as a smarter version of ad tags.
What Miles comes closest to sharing information about the actual movements of people is in dealing with cities and transit agencies, Shah says. Even then, it is offered in aggregate and abstract form. “[Say] 14% of San Francisco residents walk after taking a train trip, and their median walking distance is 0.7 miles. It’s the data formation “that cities or transit agencies get in a dashboard created by Miles,” he says.
(Cities and transit agencies don’t necessarily have merchandise to sell, so Miles may create “challenges” in its app that encourage, for example, metro use. For example, the Miles app may encourage users to take the subway to work instead of driving in exchange for a reward from another partner.)
If you want to be optimistic about all of this, you can think of Miles as some kind of avant-garde in trying to deliver some sort of compensation for being tracked – something other apps are probably already doing without your knowledge. A $ 5 Target gift card isn’t as progressive an idea as a federal law requiring tech companies to pay people for the work of generating data while using their services. But that’s more than what we’re getting right now.
“It’s more than what we’re getting right now” is a pretty dark place, too. So it will be up to Miles users to decide whether the tradeoff is worth it, as the company adds new rewards and continues to tweak the platform to change the underlying balance. With that in mind, the best we can hope for might not necessarily be that users get free coffee every now and then, but the promise of one gets a few more people to experience the. driving a bus for the first time.