Please correct me if I'm wrong, but you drop people into randomly assigned groups of people who live within a certain distance without giving the user a chance to screen that group for people they already may know and need to avoid?
This is such an obvious potential problem that it didn't occur to me that your service wouldn't account for it. In my case it's at least not a dangerous situation, although I'm betting the other person in my new group is really not going to be pleased to get this particular notification email. But I imagine overlap will be a problem, particularly when your userbase is still small.
I have to ask--are there any women working at your company? Anyone over 25?
This may seem like a nuisance question to you, but for many women I know (and for myself), the inability to screen potential groups is an immediate dealbreaker. It's a safety issue at it's most extreme, but it's also just common sense. For many women this is an absolute dealbreaker in a way men might not understand.