Free rides should be easier to come by in downtown San Diego this year if the city’s subsidized shuttle service continues down the road it traveled in 2018.
Free Ride San Diego, or FRED as it’s called, currently operates 22 all-electric vehicles that pick up and drop off passengers in the downtown region. It does so Uber-style, albeit at no cost to the rider. The cars have been cruising about the city’s core since July 2014; they’ve even had the blessing and financial backing of downtown’s planning agency Civic San Diego since August 2016. But only recently has FRED become a semi-reliable, app-based transit option for area workers and visitors.
FRED is kicking off the new year by only showing its dreaded “no drivers available” response 33 percent of the time during peak hours, compared to as high as 50 percent of the time during those same periods a little more than a year ago, according to data shared with the Union-Tribune. That’s because the service has improved tremendously in the last 12 months with major updates to its mobile apps and more cars on the road, said Ben Verdugo, who is FRED’s program manager at Civic.
“We started out the program with a big issue around supply and demand,” he said. “Today, we run pretty lean, pretty efficiently.”
As proof, Verdugo cited the service’s much-improved rider numbers. At the beginning of 2018, the shuttle service was used by 12,500 people per month, on average. It closed the year with an average of 17,500 riders per month, marking 40 percent growth.
All told, FRED transported 194,600 riders in 2018 compared to 132,000 riders in 2017. At the same time, advertising revenue doubled from $220,000 in 2017 to $440,000 in 2018.
The achievements are notable given FRED’s prior reputation as an unreliable friend to downtown commuters.
FRED is part city project, part startup. It is the San Diego-specific offshoot of The Free Ride, which was started by co-founders James Mirras and Alex Esposito in 2011. The pair have planted their electric, open-air vehicles in 15 markets with varying schedules and business models. They continue to operate and update The Free Ride ride-hail apps, as well as handle marketing and advertising efforts in all of their markets. Civic, meanwhile, is responsible for running the program at the local level. And the agency helps cover the $1.1 million annual operating costs using downtown parking revenue. Civic San Diego has agreed to spend up to $5.7 million over a five-year period on the program.
That makes glitches and supply constraints even more difficult to stomach, especially since the cost per rider comes out to a little less than $6. For comparison, the operating expense per passenger on across MTS vehicles in 2017 was $3.05, according to a report from the National Transit Database.
“We would like to see the service closer to $4 per rider,” Verdugo said, who added that forth-coming app updates should help reduce the city’s subsidy.
One such enhancement is a pooling feature slated for release in March. The function would allow FRED drivers to pick up multiple parties per trip in much the same way Uber and Lyft can with their carpool options. Currently, passengers who book a ride through the app have exclusive use of the vehicle from the time they’re picked up to the time they’re dropped off — unless their driver is hailed by a person on the street. It’s an operational inefficiency that often leaves seats unfilled in the six-person cars.
The pooling feature would let The Free Ride double its business without doubling costs, Mirras said. He also believes co-founder Esposito, who handles sales, can help secure bigger, better sponsors for San Diego in the new year. But that doesn’t mean the ride-hail system will ever turn a profit, let alone break even.
“A lot of transit programs are heavily subsidized by public funds,” Mirras said. “What’s important here is that it’s not tax dollars. I think it’s a great use of funds that are available, and a great example of what those funds should be used for.”
FRED operates downtown daily from 7 a.m. to 9 p.m., with hours extended through midnight on Friday and Saturday. Civic expects to grow its fleet by three for a total of 25 vehicles before the end of 2019.