In 2007, Drexel University graduate Timothy Ericson launched Zagster first as a consultancy, bringing the idea of bike sharing to the U.S. before there was even a single bike share program available in North America. Soon thereafter, Zagster was born and shifted into a full service bike share provider. Tim’s passion to find more eco-friendly options for transportation in urban areas has since grown into a thriving fleet management platform for “micro-mobility” business with pedal bikes, e-bikes, and scooters in 250 sites across 35 US states.
Today Zagster has more than 650 employees and contractors. And it is the job of Kyla Hanaway, the company’s head of HR, to hire, train and engage them all to accomplish Zagster’s mission to “help people fall in love with where they are.”
At the end of 2018, Zagster made a sharp turn on its bike-sharing business strategy. Packaging its technology and unique operations know-how from 11 years in the bike-sharing business, the company decided to partner with other micro-mobility providers as their one-stop fleet management platform. This operational outsourcing includes: finding and equipping a warehouse space, hiring and training staff, identifying key deployment zones to maximize ridership for each location, and managing deployment, retrieval, and maintenance of the assets. The company’s first partnership, with Spin (a scooter sharing provider owned by Ford), proved the new fleet management model.
As a result, Zagster grew from 40 employees at the end of 2018, to more than 500 employees less than a year later. The HR and operations teams needed to quickly and drastically scale their own internal operations in order to manage this rapid growth in distributed team members.
In 2015, Zagster had adopted Zenefits to help with its HR and benefits management. But changes in leadership prioritized payroll, and the company briefly shifted to ADP in 2018 for its payroll and HR support. When the business started its hyper-growth, Zagster’s leaders recognized that the 3-4 disparate systems in ADP’s model didn’t talk to each other and could not support the type of scale that Zenefits all-in-one People Platform could. They moved back to Zenefits to consolidate HR, onboarding, benefits, time & attendance and payroll.
We had to rebuild our processes to hire and train 30-40 people at a time in 4-5 week time frames for each location. Zenefits helped us scale everything.
Director of People Operations
“We powered a new process and saved time with Zenefits on everything from offer letters to verifying I-9 compliance: all critical for high volume hiring at the front end. This, in turn, allowed us to train managers on self-service requests for hires or changes to their teams, reducing the need for HR to manage all of that workflow. At the back end, the T&A tracking and flow of information from benefits to payroll saves us 8-10 hours with each hourly payroll run. For a team of four, that is significant.”
The Huge Business Opportunity for Smaller Travel
Since 60% of all trips in the US are less than 5 miles long, micro-mobility options are improving air quality, easing traffic congestion and benefitting the safety, health, and well-being of their riders. Bike and scooter-sharing options have been quickly adopted across urban areas, university campuses and corporate complexes.
But, if not well managed, electronic bike and scooter share programs have also had the downside of theft, and uncharged or broken equipment scattered across roads, yards, and sidewalks. With fleet management being Zagster’s full focus, we’re able to dedicate focus to providing best in class operations, yielding lower loss of fleet and higher customer and city satisfaction.
“We recognized that our new business model also required a different staffing model to meet the sustainable vision we had,” adds Kyla. “For each 500-scooter operation, we needed to hire and train a team that could ensure —consistently — that the electronic bikes and scooters are ridden, fixed, taken off the street at night and recharged.
“In a gig-staffed model, you lose consistency and there is also a difference in ‘incent vs. instruct’ roles to ensure quality. Battery-operated vehicles require more frequent attention that pedal bikes don’t, which motivated our shift from a workforce primarily made of 1099 contractors to more reliance on W2 employees”
Today, Kyla is part of a team of four people that make all of this happen. For example, in about 9 months, the team’s full-time recruiter has hired 700 people. The HR generalist leads all the training and development for those people: teaching the Zagster way — from micro-mobility vocabulary to the devices they use, the safety checks performed, internal communication guidelines, and mastering operational apps from Zagster and its partners.
“We went from not having an employee handbook to supporting 500 employees and needing that handbook and all the related processes to cover staffing compliance requirements from 35 states.”
With all that scale, Kyla and the Zagster executive team also recognize the impact of building a culture in caring for the staff that is caring for their customers.
“It is challenging to ensure a consistent level of employee care across different locations, given the range of localized views on an employer/employee relationship,” says Kyla. “So, we ensure that the first hire we make in each location —the operations manager— is carefully vetted. This role has a profound impact on employee satisfaction, which in turn impacts customer experience, employee experience, and financial performance. In addition, we do a lot of behavioral interviewing for all hires to ensure we make the right hire from the jump.”
Considering the massive shift in business and subsequent change in the organization, Kyla relies on Zenefits to help provide real-time measurement on the impact of their people’s strategies.
“Big picture, with Zenefits business intelligence, we are more in tune with diversity by location, and we are working to ensure our team is representative of the communities where we work. On a quarterly basis, we use Zenefits reporting for the board reports on growth. And, bi-weekly with each pay run, we look at labor —our biggest cost— and ensure it’s aligned with our spend in each location.”
Kyla recognizes that pedaling harder is not a strategy to support a growing business: she uses strategy, technology, and regular measurement to manage smarter.
Yet, it is still surprising to learn that with all of this, Kyla has made time for a “side hustle.” Midway through Zagster’s biggest growth in its history, she bought a neighborhood bakery and runs the back end operations. And she’s chosen Zenefits to help her manage that business too.