What do you do if you’re a cash-strapped Uber driver looking to make a few extra bucks without putting in extra hours? Why, you sell goods to passengers, of course. And that is exactly what New York-based Cargo is setting out to enable with its in-car commerce platform for the ride-hailing industry.

Cargo partners with brands across confectionery, electronics, cosmetics, and more to offer riders access to goods such as chocolate bars and USB cables. The company sends a transparent case to drivers, along with the goods, which they place in the vehicle’s front compartment, allowing passengers to see at a glance what’s on offer. The traveler can then make payment using PayPal, Apple Pay, Android Pay, or their credit card through Cargo’s mobile website, using a unique code to ensure payment goes to the right driver.

Though Cargo is available to most rideshare drivers, Uber represents the majority of Cargo’s fleet, followed by Lyft and Via. Indeed, Cargo actually has access to Uber’s driver API, which allows Cargo to collect insights on things like location and passenger count — data that could be used to inform future product decisions.

Above: Cargo: Transaction

The story so far

Founded in 2016, Cargo launched last summer in New York and Boston, and later expanded to Chicago before landing in Minneapolis last week. Today, the company announced a $5.5 million follow-on seed funding round from CRCM Ventures, Kellogg’s VC fund Eighteen94 Capital, Techstars Ventures, and a host of other VC firms.

Prior to now, Cargo had raised around $2 million, and with its latest cash injection it said that it plans to expand across the U.S., with a focus on the Midwest and West Coast. The company said that it also has global markets in its sights, having garnered 19,000 “signups” (interested parties) across 23 countries.

The ride-hailing industry is estimated to be a $285 billion market by 2030, and there is plenty of room for growth in this one segment for Cargo. However, there is nothing really stopping it from expanding into other transport verticals, including traditional taxis and maybe even buses or trains. And although its technology just now is based around drivers physically handing goods to passengers, there is surely nothing to stop this becoming an automated process — just in time for the self-driving car revolution.

“The rise of rideshare and fleets of autonomous vehicles create a new class of real estate,” noted Cargo founder and CEO Jeff Cripe. “Our mission is to develop that real estate for car owners and consumers, and to become their go-to provider for all in-car services.”

Above: Cargo CEO Jeff Cripe

Cargo earns money through selling the products, while paying drivers a flat 25% commission on each paid sale, plus a $1 base commission for every passenger that orders from a Cargo box. So this means that drivers can receive payment even when passengers order free samples. Indeed, the company also works with brands such as Mars and Wrigley, which pay Cargo to distribute their products and drive exposure. So Cargo is as much a marketing company as it is an auto-focused commerce upstart — this is evidenced with this year’s Super Bowl partnership, whereby Cargo is providing in-car product sampling on behalf of Red Bull.

“Cargo’s in-car and digital platform introduces a new consumer touch point for brands,” added Sabina Rahaman, director of brand partnerships and merchandising at Cargo. “Our goal is to identify brands and products that resonate with passengers so that we can deliver the best in-car experience.”

According to Cargo, drivers can earn up to $500 extra per month via commissions, referrals, and bonuses, though the average earned is closer to $130, it said. At a time when many Uber drivers reportedly struggle to make ends meet, any conduit that bumps up their pay will surely go down well. And for companies keen to get their goods front and center in passengers’ lines of sight, it’s a good way to market a brand, which is why Kellogg’s has elected to invest through its Eighteen94 Capital fund.

“Cargo represents Eighteen94 capital fund’s first channel investment,” said Simon Burton, managing director at Eighteen94 Capital. “We see huge potential in the new consumer touchpoint within the passenger economy that Cargo is developing. Cargo provides brands with innovative opportunities to connect to the consumer in their moment of need. This platform will allow us to gather useful transactional data and collect permission-based consumer insights in real time.”

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