The best things in life really are free—especially when it can get you from the office to your favorite post-work happy hour. The Free Ride Everywhere Downtown (affectionately known as FRED) in San Diego has become a staple vehicle (literally) for getting San Diegans and visitors where they need to go. And it’s not hard to see why. The friendly drivers and open-air experience fit right in with the relaxed style characteristic of Downtown San Diego.
With garages in multiple cities, FRED co-founders Alex Esposito and James Mirras each spend about a quarter of their time in America’s Finest City. We caught up with Alex when he was in town to chat about everything from new lithium batteries that will double drive time around the urban core, to fostering an employee culture in which people want to participate.
Q: How did FRED first get started?
Alex: It started with James Mirras,and it actually started more of a hometown pet project. It’s been a micro-transit solution since the beginning, and initially started as beach shuttle. We found that there was an overcrowded beach parking lot and a ton of traffic caused by people driving around in circles looking for parking spots, burning gas, causing congestion, frustration — all the joys of limited parking. At the same time, there was an underutilized parking lot about a mile away and the parking lot was owned by the town of East Hampton. The problem was that it was a little bit farther than someone would walk. We eventually asked, what if you made it free? And, how do you make it free? We worked with advertisers and the city to fund the service and decided to use electric cars to cut the cost of fuel and create sort of a fun open-air experience that advertisers would want to be a part of. It took off pretty quickly—giving away free rides isn’t the hardest sell. From there, we were able to expand to South Florida, Santa Monica, Venice, Marina Del Rey, and then San Diego.
Q: What challenges have come from operating in the startup scene?
Alex: The unknown is always a concern. A lot of entrepreneurs get hung up on small concerns. Focusing on how to solve them and not adding them up has helped us deal with the unknown. Instead of figuring out how many problems you have this week, focus on how to fix them. Our corporate motto is, “we’ll figure it out.” That’s not to say that you shouldn’t pre-plan — things are still going to come up that are unknown and you have to be ready to deal with them and not let them deter you from the ultimate goal of growing a business. The number of cars has also been a challenge. We’re working through our technology and finding different ways to improve that. We’ve had some great local sponsors, but I think combating the idea that it’s a totally city-run service has also been a little tough.
Q: What about the startup process has been rewarding?
Alex: We’ve received great feedback. We had 26,000 people sign up for the app in the first six weeks without spending a dollar on advertising. We’ve shuttled more than 140,000 people without burning an ounce of fuel in San Diego. I don’t think there’s too many programs in the whole country that could speak to that. One challenge is certainly the demand – there are a lot of people requesting rides and only a limited number of cars, so the more cars we can add, the better. I think that from a city’s perspective, what we’re doing is a lot less expensive than a lot of other alternatives. Not only the operating expenses but also the infrastructure investment. When you put in a bus, you need to put in a bus stop, you have to buy a quarter million dollar bus, you have to insure. There’s a lot of big up-front costs we are able to avoid.
Q: Civic San Diego recently approved increased funding for FRED – how do you anticipate this will change your operations in San Diego?
Alex: In the short term, a few things we’re going to do is swap out some of the old cars with newer lithium cars which will double the range of the vehicle. Doing so will increase the number of rides considerably without increasing the number of cars. In addition to that, we’re also working on some other modifications to the app. The long term goal is more cars, more jobs, less greenhouse gases. It was great at that meeting because people realized, hey look, this is a public utility, it’s not going to be free. And when you compare it to alternative forms of transportation, we’re way ahead of the game.
Q: What opportunities have come from running a zero-emissions product?
Alex: It’s opened up the interest from a lot of public groups, a lot of civic leaders, and also a lot of advertisers. Advertisers are getting smarter and I think that brands are trying to invest their money in ways that are benefiting people.
Q: What’s important to you in terms of fostering a quality job and employee culture at FRED?
Alex: Responsibility is the first thing. The drivers are the face of the business in a lot of ways so we are very conscious of who we hire and how we train. It’s not like a normal bus system where someone hops in the bus and doesn’t talk to the driver. There are great conversations that go on with our drivers, which is something we are proud of in the sense that we’re able to provide local knowledge. We’re also able to keep in contact with residents and improve through those conversations. All of the drivers have clean driving records. Safety is a top concern. We’ve also had a low turnover rate mainly because we’re hiring right and the job has a feel-good nature to it. When your employees are happy doing what they’re doing, it makes life a lot easier.
Q: When you’re dreaming big, what are your hopes for FRED down the road?
Alex: Certainly more cars, more rides, less greenhouse gases. In the long term, we’d like to increase the features on the app in ways that not only increase efficiency but also help the brands that we work with. We want to better understand how people are moving from a transportation side, but also better understand how people are interacting from an advertising side. We want to make it more of a 360 experience. Building the app from a data perspective really helps with our operational efficiency, but also really helps how we can make the app more interactive for the consumer, and therefore more beneficial for the brands.
Q: What do you love about San Diego?
Alex: I like the fact that there’s so much going on Downtown and there’s an exciting growth culture. It’s almost inspirational to be in an environment where things are on the up-and-up. We have a great crew here, so it’s exciting to work with people who really love their jobs, indicated by our low turnover rate. Overall, working with a more innovative city is a breath of fresh air. Whenever I’m in town, there’s always something new going on or a new idea.
Q: What’s your favorite coffee shop in Downtown?
Alex: Copa Vida because it’s close to the garage!