Dining with friends at a restaurant can be a hassle when it comes time to sort out who ordered the shepherd’s pie, but an app from New York-based Cover lets people instantly split the bill, pay, and go. The app launched at the beginning of the month after a year-long private beta in the city, and the startup has its eyes on other metropolises for potential expansion.
At the end of most meals at restaurants, there can be a wait while servers bring over the checks and then groups have to coordinate the way they want to split the bill. When users of Cover sit down to eat, they setup a virtual table in the app for everyone in the group, as long as they are also users of Cover, and tell the restaurant staff they will pay with the app. Through the app, the bill gets automatically split among the people at the table; payments and tip are doled to the restaurant. Users can leave the restaurant when they are ready.
The app currently can only be used at select New York restaurants such as Estela, Carbone, and Charlie Bird. Cover is available for iPhone with an Android version pending. Scaling up availability at more restaurants across New York and nationwide is crucial to the team, says co-founder Andrew Cove, who wants to make Cover as ubiquitous as using major credit cards. “In order for us to reach our goals and for the product to live on, we need to reach that level of penetration,” he says.
In the spring, one-year-old Cover raised $1.5 million to help it ramp up with a seed round led by O’Reilly AlphaTech Ventures. Lerer Ventures and angel investors such as Dave Eisenberg and Ed Zimmerman also participated in the round.
On Tuesday night, Cove and fellow co-founder Mark Egerman demoed the app at New York Tech Meetup. The duo told the crowd that Cover caters to full-service, dine-in restaurants, in contrast to other mobile payment apps TabbedOut in Austin, TX and Israel’s MyCheck, which are used in bars and quick service establishments.
Cove and Egerman met in 2001 while computer science students at Carnegie Mellon University. After graduation, Cove dabbled in the startup and venture world, most recently as a “venture hacker” with AngelList and earlier as an intern with IA Ventures. Egerman went to law school, studying under Elizabeth Warren, now a U.S. senator from Massachusetts. After law school, Egerman went to work for Warren as she led the formation of the Consumer Financial Protection Bureau and then served as special advisor to the agency.
Egerman says during his time with Warren, from 2010 to 2012, he studied how people use technology to make payments. He was surprised to learn that while mobile payment technology saw active use overseas, U.S. consumers had yet to embrace it. “Here in New York, you could pay with your phone in a taxicab or in a Duane Reade [pharmacy] yet people don’t,” Egerman says.
He believes one of the reasons why people in the U.S. shy away from mobile payments is that they want a better user experience. A few companies, though, seem to have gotten it right. “Uber has a great mobile payment experience,” Egerman says, even though most people don’t think of Uber as payment app. When users of Uber arrive at their destination, they get out and go, because the payment has already been handled. Cove and Egerman believe their app brings that experience to dining out.
The next trick for Cover is to show consumers that the app actually simplifies paying bills. Oftentimes, mobile payments can require taking out a smartphone, activating an app, and typing in a password in order to make each payment—a process the team at Cover thinks is no more efficient than using a credit card. Paying for dinner gets especially complex, Egerman says, when dividing a check among several people. “Looking at payment experiences in the real world, restaurant payments are one of the worst,” he says.
The Cover app can change the cadence of the evening, Cove says, by doing more than merely replacing one type of transaction with another. “It’s not like you’re swiping an NFC (near-field communication) chip or scanning a QR code,” he says. “We get rid of the transaction entirely.”
That means Cover users don’t have to hand over credit cards, then wait while the server brings back a signature slip. An Uber-like model for making payments, Egerman says, streamlines the hullabaloo. “When you’re done with the meal, you can go,” he says. “It’s kind of hard to beat that.”
At the moment Cover is only available at restaurants in Manhattan. The company plans to approach restaurants in Brooklyn then consider other metropolitan areas for potential expansion.
After founding their startup in September 2012, Egerman and Cove were quick to get the app into the real world. “Three and a half weeks later we had our first table in a restaurant using Cover,” Cove says.
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