City commissioners ask staff to work with Gotcha Group to try to plug the hole
Because the service began at the end of high tourist season in 2017, and tips were not as plentiful as anticipated, the Gotcha Group had to end up paying the drivers of its i-Ride electric vehicles in downtown Sarasota, the firm’s CEO explained to the Sarasota City Commission on March 19.
As a result, the Gotcha Group spent $85,273 more this year than it had budgeted for drivers, CEO Sean Flood told the board.
However, with advertising revenue almost 75% higher than expected — $122,450 for the initial year — and the company having anticipated only $70,000, the i-Ride ended up costing just $37,280 more to operate than budgeted, Flood said.
Based on that first year of experience in the city, he continued, i-Ride is expected to see a funding shortfall of $77,469 by the end of the Gotcha Group’s two-year contract with the City of Sarasota.
On the positive side, the service has counted 47,286 riders so far, Flood noted, with a total of 29,605 trips to-date. The average number of riders per month is 4,749, he said, and the total mileage year-to-date is 79,891. Flood called the numbers “some pretty impressive stats.”
The vehicles began operating on March 29, 2017.
On Feb. 6, 2017, the City Commission at that time approved the two-year operating agreement on a unanimous vote. Gotcha Group, which is based in Mt. Pleasant, S.C., would operate six regular “circulators” and one designed to comply with the Americans with Disabilities Act (ADA), according to the contract. Each regular electric vehicle is able to transport six people. The general boundaries for the service are 14th Street to the north, Mound Street to the south, the old railroad line and School Avenue to the east, and the bayfront to the west.
Because of their low speed, the vehicles cannot operate on U.S. 41.
The total projected subsidy the City Commission agreed to provide Gotcha was $338,747.50. The expense for the first year was pegged at $293,496. The city also agreed to cover the $19,347.50 cost for the ADA vehicle.
The majority of the current commissioners voiced support for the service after Flood’s presentation on March 19. However, several agreed that the city deserved financial credit in the contract because the app Gotcha Group launched in conjunction with the i-Ride did not function properly. “I’m sure that affected the bottom line,” Mayor Shelli Freeland Eddie said.
The new app the Gotcha Group created for i-Ride has been usable for only about 20% of the time the vehicles have been roaming city streets, she pointed out.
“I think the app not working the first year is big,” Commissioner Jen Ahearn-Koch concurred.
Commissioner Hagen Brody repeatedly voiced anger over the fact that the first-year financial report and Flood’s comments on March 19 indicated the service never would become self-sustaining in Sarasota. Referring to the app problems, he added at one point, “The frustration I have is that we’re not more incensed about that bait and switch.”
“I think ‘bait and switch’ is a little harsh,” Ahearn-Koch replied, noting that in February 2017, no one anticipated problems with it, nor did anyone foresee the driver pay situation, as Flood had explained it. “We agreed to this experiment over two years,” she reminded her colleagues.
Although they took no formal vote on the request, Freeland Eddie asked staff to undertake research into potential ways to reduce the total deficit anticipated by the end of the second year of i-Ride’s operation. Further, she called for staff to provide details about how continuing city subsidies to the service would affect the overall city budget.
Additionally, at Brody’s request, City Manager Tom Barwin said staff would check with Sarasota County Area Transit (SCAT) to learn as much as possible about the expense of operating the free Siesta Key Breeze open-air trolley, whose service began on March 20, 2017.
Flood told the city commissioners that the daily expense of running a vehicle such as a trolley typically runs from $85 to $105.
Finally, Barwin reported that City Engineer Alex DavisShaw already has been talking with representatives of the Florida Department of Transportation (FDOT) about the potential for i-Ride-type shuttles to operate between downtown Sarasota and the barrier islands.
A year in review
“The feedback has been nothing but positive,” Flood said of riders’ comments about i-Ride.
People may hail the vehicles, call them (941-444-2585) or use the Gotcha Ride app to catch them, he said. The new app was launched about 2 1/2 months ago, he added, and updates are being provided approximately every 30 days in an effort to continue to improve it.
“That’s kind of news to me,” Deputy City Marlon Brown responded after Flood mentioned the new app.
Most of the problems with the original app, Flood explained, were related to Android devices. Nonetheless, he said, the Gotcha Group chose to “build a new app from scratch … at a cost just shy of $100,000.”
When Vice Mayor Liz Alpert said she had heard the app still was not working well, Flood replied, “The app today is fully functional … I probably used it three times today.”
John Moran, operations manager for the city’s Downtown Improvement District, confirmed that Mark Lyons, manager of the city’s Parking Department, and Patrick Gannon, president of the Downtown Sarasota Condominium Association, had assured him they, too, had used the app successfully.
Flood indicated that the original problem was rooted partly in the fact that the i-Ride has boundary restrictions in the city.
Then Flood noted that the idea from the outset was that the city would provide a subsidy to the Gotcha Group for two years to get the system up and running; the goal was for the service to be self-sustaining by the end of that period.
With tips proving lower than expected in the early days, he said, “we had a lot of turnover.”
He and his staff decided they needed to pay the drivers to ensure the “high standard” of employee the city should have in that position.
“It sounds like you’re going to be asking for more money,”
Mayor Freeland Eddie interjected at one point.
Flood then explained that the Gotcha Group has been working on strategies to lower its expenses. It has been able to reduce drivers’ pay from $10 to $5 per hour in high season, thanks to much better tipping and higher ridership, he said. It also has been working to reduce the number of vehicles on the road at certain times to adjust to demand.
Another option is to reduce the operating hours on certain days of the week, he noted, but commissioners opposed that idea.
When Commissioner Brody asked whether the Gotcha Group already had cut the hours, Flood replied that it had not. “Our goal is to keep [i-Ride] going as late as we need it to.” However, Flood pointed out, ridership late at night “wasn’t as high as we’d hoped it would be.”
When Brody asked if Flood had statistics about the number of riders who call for the service and do not get it, Flood told him that perhaps 40 calls are missed in a three-hour shift.
Freeland Eddie told Flood, “There shouldn’t be any significantly missed calls.”
“Pickup time has all been very good,” Lyons, the parking manager, told the commissioners. The wait for a passenger typically is 5 to 10 minutes, Lyons added.
Debating the finances
Even with adjustments, Flood said, a shortfall still would be foreseen in the budget by the end of the initial two years.
When Freeland Eddie asked whether more advertising sales could cover the funding gap, Flood was skeptical that they would make up all of the extra expense. Nonetheless, he added, “What we think is that ad revenue will continue to grow.”
Flood suggested his staff work with the city staff on a monthly basis, providing details about expenses and ridership. Some months, the service might see a shortfall, he said, but other months might show a surplus.
“Are you asking for 77,000 more dollars?” Brody asked Flood at one point. “Why are you here today?”
“We’re very proud of the service we have provided over the last year,” Flood said, but it has proven different from what was contemplated “two, three, five years ago [in Sarasota] because the market has shifted.”
He and his employees have been holding monthly meetings with city staff, Flood added, to keep them apprised.
After Flood proposed the city pay the gap between revenue and expenses, Brody asked about the potential that i-Ride would break even after the city stopped the initial subsidy to which it agreed in the two-year contract.
“I don’t know that there’s a model that’s 100% advertising-based,” Flood replied, referring to what he called “micro transit” options such as the i-Ride.
Lyons told the commissioners that staff had asked the Gotcha Group team to come up with more marketing ideas for the service for the second year of operation, to help reduce expenses.
Commissioner Ahearn-Koch said she did not like the idea of the service failing to be self-sustaining after the first two years. Nonetheless, she pointed out, “I think that the City of Sarasota going out on this limb and trying this has been a little bit more progressive than I ever would have expected from the city.”
She and Brody were elected to the commission in May 2017, after the i-Ride contract was approved.
Commissioners also disagreed with whether the i-Ride has decreased the number of vehicles on the road. Brody told his colleagues he does not believe it has, but Ahearn-Koch said, “I do think you’re taking cars off the road and out of downtown.”
“Sometimes this is the investment so people don’t bring their car [to an area],” Flood pointed out. While he does not have figures that can prove an actual decrease in vehicles on city streets, he told the commissioners he believes that that has been the result. Moreover, Flood said, the i-Ride “has reduced a lot of [carbon dioxide].”
“I definitely see the value of this,” Freeland Eddie told Flood. Still, she made it clear she was not happy about the request for additional city funding.
No board action was necessary that night, Vice Mayor Alpert reminded her colleagues. “Let’s just … see where it goes.”