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Rideorama 1 Rideorama Business Plan Casey George Ogheneovo Dibie Abdoul Gobitaka Kamal Sabi
Rideorama 1
Rideorama Business Plan
Casey George
Ogheneovo Dibie
Abdoul Gobitaka
Kamal Sabi
Rideorama 2
Table of Contents
1. Executive Summary .……………………………………………………………...……......... 3
2. Overview ..…………………………………………………………………………...………. 4
3. Market Opportunity ……………………………………………………………………...….. 8
4. Competition…………………………………………………………………………………. 13
5. Marketing Strategy ………………………………………………………………...……….. 18
6. Business Model ………………………………………………………………………...…... 21
a. Denver Case Study ...…………………………………………………………...…... 22
7. Financials ……………………………………………………………………………...…… 23
8. Risks ……………………………………………………………………………..………..... 25
9. Management Team ………………………………………………………………....………. 26
10. References …………………………………………………………….……………………. 28
11. Appendix …………………………………………………………………………………… 29
Rideorama 3
Executive Summary
People hate commuting to and from the airport. You either wait on buses or shared-ride
vans for hours, pay an arm and a leg for parking or taxis, or beg your friends for a ride. Whether
you’re catching a flight or going home, you want to get to your destination quickly and cheaply.
Rideorama is a ridesharing community focused on airport ground access that matches
drivers and passengers through easy to use web and mobile applications. The platform consists
of three core sections: the Matching Marketplace, where drivers and passengers offer and accept
rides; the Ridesharer Profiles, where ridesharers learn about the people they share rides with; and
the Payment Platform, where ridesharers transact. We will initially target adult, non-business air
travelers by marketing at colleges during times of high airport patronage, hiring campus
ambassadors, partnering with metropolitan planning organizations, previewing our service with
travel blog writers, and promoting our service at tech and green events.
The airport ground access market is a $20B, unexploited opportunity for ridesharing.
Excluding airport employees, there were over 1.4 billion trips to and from US airports in 2010.
Correcting online competitor’s strategic missteps as well as complementary customer behavior in
our target segment, will allow our platform to reach scale and generate network effects. In
addition, drivers’ base case unit economics compete effectively on price and service against real
world transportation options. These factors enable our team to bootstrap marketing costs by co-
opting the Rideorama platform as part of our multifaceted marketing strategy.
Rideorama charges ridesharers a 20% fee for transactions on our platform and will
initially use PayPal to process its chained payments. While any peer to peer community faces
challenges converting risk-averse people into customers and reputational risk from wrongdoers,
our marketing strategy as well as our transparent product serve to mitigate those risks.
Our vision is to create a mobile, real-time ridesharing community focused on intra-
metropolitan area travel that bridges the gap between public and private transportation. In
Rideorama 4
striving towards that goal, Rideorama will service high volume locations where bringing a car is
undesirable or expensive. Long term, our actions will reduce greenhouse gas emissions, increase
the capacity utilization of cars, and reduce expenses for car owners.
Overview
Rideorama is a ridesharing platform that matches drivers going to and from the airport
with paying passengers. Rideorama’s core functions are its Matching Marketplace, Ridesharer
Profiles, and Payment Platform.
Matching Marketplace – The Matching Marketplace is an exchange that allows drivers to view
passenger requests for rides and allows passengers to view drivers’ posted destinations and
routes. Members search the Matching Marketplace by providing their status as a driver or
passenger, origin, destination, departure time, departure date.
Figure 1: Rideorama Search Interface
The resulting search brings up the Matching Marketplace where members can view rideshare
matches that are travelling to or near their desired destinations. These listings contain their
rideshare match name, origin, destination, departure time, cost per seat or willingness to pay as
well as notes and further details on the individual trip. Additionally, these listings contain links
Rideorama 5
to the Ridesharer Profiles (where you can learn more about your Rideshare Matches) as well as
to the Payment Platform (where Ridesharers can pay for their trip).
Figure 2: Matching Marketplace Listings
Members are able to sort rideshare partners by their distance from origin/destination, price,
rating, and time of departure. Eventually, we will employ a routing algorithm that uses origin
and destination information to match passengers and drivers based on convenience; measured in
duration of deviation from original route for drivers and projected time of pickup/drop off for
passengers. If drivers and/or passengers are unavailable at the requested time, members will be
prompted to post a request to the matching marketplace. In order to post to the Matching
Marketplace, members will provide the date, departure time, departure location, destination
location, cost per seat/willingness to pay, and the amount and size of luggage.
After drivers/passengers select their rideshare matches, their counterpart must confirm
that they accept their prospective driver/passenger. Notification of matching proceedings is sent
through email. Rideshare partners will be prompted to leave feedback after every transaction
through email as well.
Rideorama 6
Figure 3: Ride Posting Interface (Driver)
Ridesharer Profiles – Ridesharer Profiles give our members additional information about each
other before deciding to accept potential drivers/passengers. Profiles are split into five sections:
Profile, Car, Trip Info, Reviews, and Contact. The Rideshare Match Details contain the name,
age, location, sex, profession, along as well as pictures of Rideorama members. The Car section
contains the make, model, year, as well as pictures of a member’s car. The Trip Information
section contains more detailed information on the trip than found in the Matching Marketplace
and the Reviews section lists all feedback and ratings drivers/passengers have received from
previous transactions. The Contact section allows drivers as well as passengers to discuss any
issues that aren’t answered elsewhere in a chat interface. Direct contact information (full names,
Rideorama 7
email addresses, and phone numbers) is not released to Rideshare Matches until after rides have
been paid for.
Figure 4: Trip Information Details
Members will be able to “verify” their profile by providing information and service
above and beyond what is necessary. There are three levels of verification: Bronze, Silver, and
Gold. Members are Bronze level verified if their profile is completely filled out. Silver level
verification is attained after attaining Bronze certification while linking your Rideorama profile
to a LinkedIn or Facebook profile and having 5 transactions and a rating above 4.5. Gold level
verification is attained after meeting Silver verification standards as well as paying for a criminal
background check. Verification features will be implemented in the next version of our web and
mobile applications.
Payment Platform – Our payment platform enables ridesharing partners to engage in
simple and seamless transactions. PayPal will be initially used to process all transactions and no
credit card information will be stored on our website.
Rideorama 8
Passengers purchase seats in drivers’ cars directly from listings in the matching
marketplace. The agreed upon fare is held by Rideorama only after the driver accepts the
passenger’s request. Payment is released to the driver 24 hours after the ride’s expected time of
completion. There is currently no minimum cancellation time, but the feature must be added.
The minimum cancellation time will be specified by the driver and payment is transferred to the
driver in the event of passenger no show. The shortest minimum cancellation time that can be
would set is 12 hours before the scheduled trip. This policy will have to remain flexible as the
system moves towards a real-time system.
Passengers have the option to dispute payment before money is transferred out of
Rideorama’s account (24 hours after the transaction has been completed). Arbitration will be
handled personally by Rideorama personnel and we make the final decisions on all disputes.
Problem passengers and drivers can and will be banned from using Rideorama’s community.
Market Opportunity
Use of airport infrastructure has changed considerably over the last decade. Network
carriers utilizing traditional hub-and-spoke transport models have lost market share to low cost
airlines that fly point-to-point on more cost effective routes. Air travelers have reaped the
benefits of increased competition and air travel demand has been bolstered by the decrease in
ticket prices. For example, the first full year Southwest Airlines began offering service at
Philadelphia International Airport (PHL), originating passenger traffic increased 24%, while
average domestic airfares decreased 19% [5].
Rideorama 9
Figure 6: Total US Airport Trips (in Millions)
Source: Research and Innovative Technology Administration (RITA) Air Carrier Statistics, Rideorama Analysis
Low cost operators originally chose to operate through the secondary, lower volume
airports in metropolitan areas without direct access to the most efficient public transportation
modes. Although they have begun to offer service at major airports, this trend has increased the
average duration of ground access travel passengers undertake to patronize these low cost
airlines [2]. As a result, it is less convenient for passengers to use public transportation or other
high occupancy vehicles to access airports. In this regard, municipalities face a significant
challenge.
Remarkably, the use of public transportation modes to get to US airports is even lower
than expected. Bus, van, limousine, and rail transit options only capture 8% of commuting
airline passengers in the US [4]. The most efficient public transit system, that surrounding San
Francisco International Airport (SFO), only has a 23% market share of airport commuters [4].
Airport travelers have a wide variety of ground transportation services to choose from. Airport
ground access mode choices include private vehicles, rental cars, courtesy vehicles, airline crew
vehicles, taxicabs, on-demand limousines, prearranged limousines, chartered buses and vans,
1200.0
1250.0
1300.0
1350.0
1400.0
1450.0
1500.0
1550.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Rideorama 10
shared-ride vans, scheduled buses, and rail services. Even with such broad selection, ground
access to airports remains dominated by passenger car travel.
Figure 7: US Airport Ground Access Mode Market Share
Source: TCRP Report 62, TCRP Report 83, Rideorama Analysis
Figure 8A: Ground Access Mode Market Share by Airport
Source: TCRP Report 62, TCRP Report 83, Rideorama Analysis
73.0%
9.8%
3.7% 2.7% 3.1%
7.7%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
Private & Rental Cars Taxicabs/ Town cars Charter Buses/ Prearranged Limos
Shared Ride Vans Express Bus Other
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
Private & Rental Cars Taxicabs/Town cars Charter Buses/ Prearranged Limos Shared Ride Vans Express Bus Other
Rideorama 11
Figure 8B: Ground Access Mode Market Share by Airport
Source: TCRP Report 62, TCRP Report 83, Rideorama Analysis
Market share for each transportation mode depends upon demographic and geographic
factors. The proportion of resident/non-resident and business/non-business airport passengers
influences the market share for transit mode choices. Resident travelers show high use of
personal automobiles while non-residents have to purchase some form of transportation for the
airport ground trip. In many cases, the density patterns of residential areas are lower than the
density patterns of the major destination areas for visitors. This negatively influences the
resident group’s likelihood of patronizing public transportation services. However, this increases
the resident group’s propensity to be the driver in a ridesharing transaction as airports are usually
sited proximally to higher density areas [3].
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
Private & Rental Cars Taxicabs/Town cars Charter Buses/ Prearranged Limos Shared Ride Vans Express Bus Other
Rideorama 12
Table 1: Percentage of air travelers who are local residents
Source: TCRP Report 62
Non-business passengers are less time sensitive and more price sensitive than business
passengers. As a result, business travelers are more likely to purchase premium transportation
service services (taxis, limousines) [3].
Table 2: Percentage of air travelers on business
Source: TCRP Report 62
Geographic factors that affect mode choice are trip-end density as well as the distance to
chosen airport. Higher density areas have greater access to public transportation options and
public transportation market share is higher as a result [3]. Therefore, Rideorama’s primary
demographic target is US, non-business air passengers. In the US airport ground access market,
there were approximately 1.43 billion total US passenger market enplanements in 2010. Each
market enplanement represents a trip to the airport and implies a market size greater than $20B
[Rideorama Estimates].
Atlanta 66% Boston 54% San Francisco 41% Los Angeles 32%
Reagan National 64% Baltimore/Washington 54% San Diego 40% Las Vegas 30%
Dallas/Ft. Worth 57% Seattle 54% Tampa 37% Orlando 23%
Kansas City 57% Washington Dulles 52% Chicago Midway 37% Ft. Lauderdale 23%
New Orleans 56% Chicago O'Hare 50% Phoenix 36%
Oakland 50% Portland 36%
San Jose 48% Salt Lake City 36%
Denver 47%
Sacramento 46%
More than 55% 45% to 55% 35% to 44% Less than 35%
Sacramento 69% Dallas/Ft. Worth 54% San Jose 49% Phoenix 38%
Boston 59% Chicago O'Hare 54% Baltimore/Washington 47% Tampa 38%
Seattle 57% Oakland 52% Salt Lake City 45% Washington Dulles 33%
Atlanta 50% San Francisco 43% New Orleans 28%
Los Angeles 42% Reagan National 29%
Fort Lauderdale 41% Orlando 27%
Denver 41% Las Vegas 17%
Portland 40%
San Diego 40%
More than 55% 45% to 55% 35% to 44% Less than 35%
Rideorama 13
Competition
Rideorama’s platform is entering into an industry with many incumbents. Our
competition includes all airport ground access modes as well as potential competition from US
focused online ridesharing platforms. Real world incumbent competition includes: Taxis, On-
Demand Limousines, Express Buses, Shared-Ride Vans, Rail, Public Transportation Buses,
Remote and On-Site Parking Garages, and “Free Rides” With Friends.
While there are many incumbents serving the airport ground access market, consumers
are left to choose between the least painful of terrible solutions. Multi-stop buses are cheap, but
very slow. Express buses and vans are faster and thus more expensive than multi-stop buses, but
are still slow compared to passenger car travel. Shared-ride vans are unpredictable. Customers
could be anywhere from the 1st to the 11
th person dropped off (slower than express buses in the
worst case) while paying a premium to public transportation ground access modes. Taxis,
limousines, and parking at the airport are fast but are very expensive. The best option for many
people is begging friends and family for rides, but it is difficult to find people with time to pick
you up when you arrive. There is not a cheap and fast ground access mode currently available
for airport commuters.
Table 3: The Problems With Incumbents
Ground Access Mode Pain
Multi-Stop Bus & Rail Fragmented Travel/Slowest
Private Vehicles (Drop-off/Pickup) Begging Friends
Express Buses and Vans Fragmented Travel/Slow
Shared-Ride Vans Unpredictable
Private Vehicles (Parked Remote) Fragmented Travel
Taxicabs and On-demand Limousines Expensive
Private Vehicles (Parked Airport) Expensive
Rental Cars Even More Expensive
Prearranged Limousines Even More Expensive
Rideorama 14
Figure 9: Airport Ground Access Competitive Landscape
Source: TCRP Report 62, Rideorama Analysis
To further analyze airport ground access mode options, we gathered roundtrip time and
price data to airports from downtowns across many municipalities. These 12 markets were
selected because these metropolitan areas have varying degrees of proximity to the airport as
well as population density. A number of conservative assumptions were made while compiling
this data: average capacity of a shared-ride van is 5 people, it takes 10 minutes to get from on-
site parking to the terminal, 30 minutes to get from remote parking to the terminal, and average
costs of operating a car are $0.23 per mile (variable cost rate of IRS tax reimbursement). The
estimated cost per mile takes into account the variable costs for operating commercial vehicles in
the US fleet and may overstate the actual variable cost for operating privately owned passenger
vehicles. Friends and family gift their car operating and maintenance costs to their passengers.
The time and cost data is compiled below.
Rideorama 15
Table 4: Time From Downtown To Airport (min)
Source: Rideorama Analysis
Table 5: Price From Downtown To Airport ($)
Source: Rideorama Analysis
At a minimum, Rideorama users will be able to provide a service superior to shared-ride
van and on par with taxis at maximum while dominating both options on price. Rideorama
cannot compete with public transportation options on price, but can on convenience. This
observation highlights the need for Rideorama to enter into markets where public transportation
options are unavailable or extremely time consuming versus other ground access modes.
Existing online ridesharing marketplaces represent potential new entrants. A non-
exhaustive list of domestic ridesharing communities include: Zimride.com, Ridejoy.com,
Ridefrog, Craigslist.org, Zebigo.com, Goloco.com, Carticipate, Pickride.com, iCarpool.com,
ShareTheTaxi, Rideshare.us, Rideshare-Directory.com, and other legacy bulletin board based
competitors. Existing ridesharing communities target commuters travelling intercity, to and
from work, to and from events, and around colleges. These commuter segments present a more
fragmented and complex ridesharing problem that makes it difficult to generate network effects;
the only potential competitive advantage for an online marketplace. A general ridesharing
SFO DEN IAH LAX ORD ATL BWI MSP
Car 20 36 30 23 27 19 19 19
Taxi 20 36 30 23 27 19 19 19
Parking (Terminal) 30 46 40 33 37 29 29 29
Parking (Remote) 50 66 60 53 57 49 49 49
Bus/Rail 54 80 64 100 60 31 46 25
Super Shuttle 80 144 120 92 108 76 76 76
SFO DEN IAH LAX ORD ATL BWI MSP
Car $3.17 $6.46 $5.10 $4.61 $4.39 $2.68 $4.47 $3.03
Taxi $50.00 $75.00 $52.00 $70.00 $43.00 $36.00 $24.00 $43.00
Parking (Terminal) $63.17 $60.46 $56.10 $94.61 $97.39 $50.68 $34.47 $57.03
Parking (Remote) $26.96 $24.46 $26.10 $23.89 $31.39 $20.65 $24.36 $27.02
Bus/Rail $1.50 $2.25 $4.50 $1.25 $2.25 $2.00 $2.00 $2.25
Super Shuttle $17.00 $22.00 $22.00 $16.00 $23.00 $18.00
Rideorama 16
platform is tasked with a very difficult issue. It must solve a problem with essentially infinite
origins and infinite destinations in addition to uncertain demand in the time domain. There are
many more places of work, study, and general entertainment than there are airports in the US.
By initially focusing on airports, we simplify the matching problem by reducing the degrees of
freedom in the ridesharing problem.
At first glance, the recurring nature of commuter behavior would make that segment
more attractive. However, the recurring contact between commuters breeds familiarity that
incentivizes users to circumvent payment platforms. Why pay a 10-15% fee for every
transaction when you can just give your ridesharing friends cash in person? Operators of
commuter segment ridesharing platforms focused on frequent trips must constantly fight
attrition. Thus, the ideal segments for a ridesharing marketplace are those where specific trips
are common in the general population, but infrequent for individuals. It is peculiar that none of
these potential competitors have chosen to target our market segment as the behavior of
commuters to and from airports is ideal compared to other ground access markets.
Further, it is strange to focus on friends and coworkers instead of “strangers” in your
business model. Many of our potential competitors use social networking functions to limit
potential rideshare partners to friends, friends of friends, and people in your network. This adds
an additional constraint onto an already complex matching problem and limits the scale you can
achieve in any single locale. Marketplaces create value when they connect people who don’t
know one another for transactions. By correcting the strategic missteps of our competitors, the
Rideorama marketplace will generate network effects and create a barrier to entry as we expand
nationwide.
Rideorama 17
We used factors discussed in our previous analyses to determine the attractiveness of the
40 largest airport markets in the United States. The quantity of market enplanements, ratio of
cars to other nonpublic transportation modes for ground access, percentage of non-business
travelers, percentage of resident travelers, and the respective competitive landscapes, have been
taken into account when determining the most desirable markets for entry. We will supplement
our analyses with “on the ground” surveys in each of the most attractive markets to empirically
determine willingness to pay as well as the likelihood to accept rides through our platform.
Based upon our most recent efforts, we have listed the top ten markets for Rideorama below.
Table 6: Most Desirable Markets for Rideorama Entry
Source: RITA Air Carrier Survey, TCRP Report 62, TCRP Report 83, ACRP Report 4, Rideorama Analysis
Incumbents that provide airport ground access services will lose market share as result of our
successful entry. Our product is most competitive with shared-ride van services as Rideorama
drivers offer superior service to shared-ride vans at a lower price per person. Shared-ride van
customers will be our primary vector of acquiring market share. Consumers of other airport
ground access modes face a choice when switching to Rideorama; they will either to pay more
for better service (Express Buses and other Public Transportation) or trade some convenience for
Rank Code Airport
US Market
Enplanements
(2010)
Car Access
Percentage
Non Business
Travelers
Resident
Travelers
1 ATL Atlanta Hartsfield 37,826,570 73.3% 34% 50%
2 DEN Denver 23,021,935 77.7% 53% 41%
3 DFW Dallas/Fort Worth 24,280,162 75.2% 43% 54%
4 SEA Seattle-Tacoma 13,974,969 82.0% 46% 57%
5 PHX Phoenix Sky Harbor 17,636,575 79.1% 64% 38%
6 ORD Chicago O'Hare 26,058,041 65.3% 50% 54%
7 MSP Minneapolis-St Paul 14,427,820 84.1% N/A N/A
8 LAX Los Angeles 20,141,377 67.6% 68% 42%
9 IAH Houston Bush Int'l 15,452,628 79.7% N/A N/A
10 SLC Salt Lake City 9,679,761 85.6% 64% 45%
Rideorama 18
lower prices (Taxis and Prearranged Limousines). Consumer price sensitivity is a key
determinant of how much market share we can acquire from other ground access modes.
Marketing Strategy
Our initial demographic target is adult, non-business travelers. These customers fall
under two archetypes: price sensitive travelers and environmentally conscious travelers. These
customers are less time sensitive and more price sensitive than business travelers. More
specifically, our marketing strategy focuses on attracting drivers and passengers, and tactics are
focused on specific subgroups of those segments. The passenger subgroup targets are college
students, young professionals, the environmentally conscious, and people without families.
Driver subpopulations are college students, young professionals, as well as high volume drivers
(salespeople, consultants, etc.). The tactics for marketing to these subgroups are diverse, local,
and varied.
Our primary way of marketing pre-launch is old-fashioned face to face selling. The
entire team evangelizes our service to everyone we meet. Our objective in doing so is to gather
emails from prospective customers and add them to our email list. Since January, we have
focused on CU Boulder as you can easily run into students at the UMC or on the fields/quads
around the university. By getting these emails, secure a base number of marketing targets to
email following launch and in concert with subsequent marketing pushes. By the time we
launched our alpha site, we secured over 1100 emails. We additionally promote to friends,
family, and people in our social networks. Although everyone we know is not in our test case
area, friends of friends will be. The more people we tell, the higher the probability of second
order referrals.
Rideorama 19
To further target university students, we reach out to student organizations that would be
interested in Rideorama. At CU Boulder, we identified the Collegiate Entrepreneur’s
Association, the CU Marketing Association, the CU Finance Club, the ENVS club, multiple
fraternities and sororities, amongst other student groups to market to pre-launch. We will use
LaunchRock’s splash page platform to incentivize students to sign others up for our service. We
are currently running a competition offering $100 to the person who signs the most users up for
Rideorama. We will continue to use competitions and incentive to drive use of our platform.
After Rideorama launches, our collegiate marketing strategy focuses on campus ambassadors,
seasonal marketing, and promotions. Campus ambassadors are university students that help
management identify opportunities to market to their fellow students. Pre-launch competition
participants and others who show high interest in Rideorama will be tapped to fill this role.
Campus ambassadors drive the detail of our seasonal marketing strategy. College students rarely
patronize the airport outside of Orientation, Thanksgiving Break, Winter Break, Spring Break,
and Graduation. The marketing push will begin about 1.5 weeks before these events as students
begin to finalize their travel plans. During our face to face marketing, we have found that
travel/airport ground access plans don’t crystallize until about a week before travel. There will
be limited opportunities to capture college students outside of these periods.
Our website’s blog and social media sites (Facebook, Twitter, and Tumblr) will allow us
to keep users engaged and promote the successful use of our platform by the executive team and
early users. Testimonials, helpful hints, contests and our expansion plans will be communicated
through this medium and will give customers insight on how to best use our product.
Additionally, Rideorama uses Facebook to spread notice of rides on our platform. When
ridesharers post to Rideorama’s platform and are logged into Facebook, their post is shared with
Rideorama 20
their friends as a post on their timeline. This has been very successful in driving people to
Rideorama. More than 20% of the visits to our site have come from Facebook so far. Facebook
and Twitter will be used to distribute links in peer to peer marketing campaigns. We are also
investigating other methods for spreading Rideorama through social media channels. We can
include links within Ridesharer Profiles allow users to share this service with friends in exchange
for Rideorama credits. These credits would be earned after a person signs up through a shared
link and either provides or shares a ride through the Rideorama platform.
Our press strategy is a key component of our marketing. We want to construct a good net
to convert casual visitors to platform users. Our press strategy is executed in phases like our
product strategy, as we don’t want to waste any attention we garner. We will initially target
Colorado media outlets for our press kit. We aim to get articles written in Boulder city and
university newspapers as well as coverage in Colorado blogs focused on technology, green
enterprise and entrepreneurship. Upon expansion, we will also target national tech and green
blogs as well as travel bloggers.
Metropolitan Planning Organizations have not thoroughly explored ridesharing to and
from airports as a solution to ground access issues. It is not economic to build a public
transportation system in areas where there is low trip density. Those public works projects are
an unnecessary cost for municipalities with already stretched budgets. These MPOs are another
way to notify businesses as well as environmentally conscious community members about
Rideorama. The MPOs in the Denver metropolitan area are particularly focused on any
alternative modes of transportation that reduce vehicle-miles driven and therefore reduce
greenhouse gas emissions. We have received lots of support from these MPOs as well as other
organization that have a similar mission. We have secured a spot in Boulder B-Cycle and
Rideorama 21
Boulder East’s email letter for marketing. In addition, we will be doing a guest blog post in E-
Go Carshare’s blog. This adds 5000-6000 additional people to our reach. We also intend to
begin relationships with airport managers and offer them our platform as a ground access
solution where public transportation isn’t feasible. We hope to gain further understanding of
challenges ground access presents and ways that our platform will help them. Ideally, we will
garner support in small markets as a preferred method of ground access as well as get a dedicated
location at terminals where members can meet. We can use information from these partnerships
as case studies to demonstrate our concept and enter larger markets.
Our marketing strategy also includes online advertising through Google as well as
Facebook. We would target airports with ideal characteristics by advertising on travel websites
(Priceline, Travelocity, Expedia, Kayak, etc.) when their customers look to book travel at
airports where our services are available. We have also investigated advertising through the
Google AdWords platform. Keyword auctions focused on airport ground access tend to be
expensive (>$1.00 per click) and will not be a large part of our early marketing spend. Taxis and
Shared-Ride Van companies appear to acquire users through this channel as these high costs can
be serviced through their business model.
Business Model
Rideorama’s sole source of revenue is transaction fees. We will charge 20% for every
transaction processed through our website and mobile applications. We will implement a $1
transaction fee for passengers that book seats on our platform. This revenue model would mirror
the structure of our credit card fees in order to ensure low cost transactions don’t yield immediate
losses. Our payment platform will initially use PayPal to process transactions as PayPal allows
Rideorama 22
chained payments for businesses our size. Credit card fees will be paid by Rideorama as we
strive for transparency in payments. We don’t want customers to feel nickel and dimed in
dealing with charges one by one. Credit card fees are one of our largest expenses. We will
continue to evaluate credit card processors and payment methods in order to be as cost efficient
as possible.
Case Study: Denver International Airport
We intend to prove our business model and marketing strategies in the Denver
metropolitan area. Denver’s geographic and demographic characteristics made it ideal for our
test case market. In addition to factors previously discussed, Denver International Airport is one
of the fastest growing in the US, its single terminal layout reduces complexity, taxis and shared-
ride vans are expensive versus other transportation options, the central business district is far
from the airport, and the populace is environmentally conscious. Additionally, our team’s
network within local universities and businesses will help keep costs low while marketing our
product.
The following examples display the unit economics of a trip from Boulder to Denver
International Airport. We outline scenarios for both the marginal and average cost driver that
pick up a ridesharer from Westminster, CO along the way.
Table 9: Test Case Distance and Cost
Source: Rideorama Analysis
Boulder, CO (A) Westminster, CO (B) A-B (C) Deviation (D)
Distance (miles) 43.8 27.1 20.2 3.5
Distance (min) 50.0 35.0 26.0 11.0
Cost (miles) $10.29 $6.37 $4.75 $0.82
Cost (min) $7.05 $4.94 $3.67 $1.55
Rideorama 23
Table 10: Average and Marginal Cost Driver Analyses
Source: Rideorama Analysis
Under our assumptions (Cost per mile equals IRS variable cost reimbursement rate of
$0.235/mile) the scenario’s economics are favorable for the average cost driver and very
attractive for the marginal cost driver. This finding reinforces the need for drivers and explains
why percentage of local resident air travelers was used as a test market selection criterion. After
testing and fine tuning our marketing strategy in Denver, we will launch nationwide in phases.
The next nine target markets are outlined in Table 5, while the subsequent phases will focus on
airports with the largest number of market enplanements.
Financials
Rideorama’s revenue growth is driven by geographic expansion. We aim to expand to
two airports after spending 2012 in serving cities in Colorado that use Denver International
Airport. Afterward, we will enter US airport ground access markets in 3 phases until we are in
the top 100 airport markets in the US. Longer term, we will gain incremental market share as
our marketing strategy drives airline passengers to our platform. Our business model has a
significant amount of operating leverage. Amazon’s EC2 cloud service provides a scalable and
Price/Seat $20.00 Price/Seat $20.00
Revenue $20.00 Revenue $20.00
Cost $11.12 Cost $1.55
CC Fees $0.88 CC Fees $0.88
Rideorama Fees $4.00 Rideorama Fees $4.00
Profit $4.00 Profit $13.57
Profit Margin 20.0% Profit Margin 67.8%
People 1.0 Seats 1.0
Rideorama $20.00 Rideorama $20.00
Taxi $115.00 Taxi $115.00
SS P/P Cost $35.00 SS P/P Cost $35.00
Average Cost Driver Marginal Cost Driver
Rideorama 24
inexpensive solution for hosting our website and G&A expenses will be kept low as our current
team will execute near term marketing strategy.
The speed of our expansion is predicated on the success of our platform as well as our
capitalization. Rideorama’s current team is staffed appropriately to handle the product launch
and marketing strategy execution in the first three targeted markets. Further expansion requires
hiring additional engineering and sales/marketing talent. We anticipate spending 2012 in the
Denver metropolitan area gaining traction and formalizing our sales/marketing processes. We see
Thanksgiving and Christmas 2012 as being the litmus test for further expansion. We have
already had success in testing our product during Spring Break and we will learn more as we
progress through the graduation and summer travel seasons. We aim to process 1000
transactions per month in Denver before expanding to other markets. This represents .02% of
the monthly trips to and from Denver International Airport. Rideorama does not have to gain a
large market share of the ground access market to be extremely successful. Airport ground
access represents a $200M revenue opportunity in with 3% of the marketshare in the US
(Shared-Ride Van businesses current marketshare).
Projections do not include broadening the scope of the Rideorama product. Our team has
identified other attractive ground access niches that are smaller opportunities for ridesharing.
These other opportunities provide real options we could exercise to attain greater economies of
scale.
Rideorama 25
Table 11: Rideorama Pro-Forma Income Statement
Source: Rideorama Analysis and Estimates
Risks
There are several outstanding risks for Rideorama as an enterprise. People are risk averse
and may hesitate to share rides with people they don’t know. A failure to gain market share
early could be fatal if competition from well capitalized new entrants emerges. We face
significant reputational risk from bad users as any person to person platform does. Rideorama
also faces challenges navigating legal differences in statutes between municipalities. Differences
in statutes could hinder the effects of some of our proposed marketing strategies.
Rideorama Income Statement
Income Statement 2012E 2013E 2014E 2015E
Revenue
Total Revenue 32,480 547,120 6,019,680 28,294,800
COGS
Server/Bandwidth Costs 2,400 5,000 7,500 10,000
Credit Card Fees 5,116 86,171 948,100 4,456,431
Total COGS 7,516 91,171 955,600 4,466,431
Gross Profit 24,964 455,949 5,064,080 23,828,369
Operating Expenses
Marketing (Online & Travel) 20,000 150,000 300,000 700,000
Engineering 40,000 250,000 350,000 700,000
D&A 11,000 14,200 18,800 26,400
SG&A 120,000 300,000 600,000 1,350,000
Office Rental 0 7,000 12,000 14,000
Insurance 25,000 30,000 60,000 100,000
Legal/Accounting 10,000 10,000 20,000 30,000
Other Personnel 0 60,000 200,000 500,000
Total Operating Expenses 226,000 821,200 1,560,800 3,420,400
Operating Income ($201,036) ($365,251) $3,503,280 $20,407,969
Interest Expense (Income) (41) (694) (2,666) (9,720)
Income Tax Expense (70,362) (127,838) 1,226,148 7,142,789
Net Income ($130,632) ($236,719) $2,279,799 $13,274,900
Rideorama 26
Fortunately, these risks can be mitigated. Information provided in Ridesharer Profiles,
potential monetary gain and/or costs savings, and enhanced verification options provide users
with data about rideshare partners which allows them to select people they are comfortable with.
Our multifaceted marketing strategy, allow us to bring best practices to subsequent markets in
order to quickly gain market share. We are investigating products to offer/sell our customers that
insure against varied unfavorable outcomes in order to hedge reputational risk. Finally, working
through local laws and statutes with our legal counsel in Denver will give us a template for
navigating issues in other municipalities.
Management Team
Casey George – CEO – Mr. George will be responsible for the strategic direction of
Rideorama and will focus on the marketing initiatives and business partnerships needed to
establish this new airport ground access mode. After working for four years as a Chemical
Engineer, Casey decided to go back to business school to turn his hobby of investing into his
profession. Along the way, he fell in love with startups and is applying what he's learned about
investing to entrepreneurship. He loves analyzing businesses and sees ridesharing as an efficient,
practical, and overlooked opportunity that makes too much sense not to do. Casey received his
BS in Chemical Engineering from Howard University and graduated with his MBA from
Columbia Business School.
Ogheneovo (Ovo) Dibie – CTO – Mr. Dibie will manage the construction, rollout, and
maintenance of the Rideorama web and mobile applications. In addition, he will source and
manage technical talent and resources of the company. Ovo is very passionate about building
things that make impacts in peoples’ lives and he sees Rideorama as a platform for doing just
Rideorama 27
that. You often hear of ways to reduce your carbon footprint but most methods are too expensive
for the general populace. By allowing people to share rides to and from the airport, you can
reduce carbon emissions today and save people money simultaneously. Ovo received a BS in
Computer Science from the University of Maine and is a PhD Candidate at the University of
Colorado-Boulder.
Kamal Sabi – Community Manager – Mr. Sabi is responsible for the user experience,
design, and process flow of the web and mobile applications. A year ago, Kamal took a break
from earning his Masters at CU to visit Germany and France with family. During his stay, he
took advantage of the vast ridesharing network Europe had to offer. Ridesharing made perfect
sense to him--it brought back memories of his upbringing in Togo where the community shared
resources. He wondered why this fun, sensible way of commuting hadn't taken hold in the US
and decided to do something about it. Kamal received his BS in Electrical and Computer
Engineering at the University of Colorado-Boulder where he is currently pursuing his Masters in
Electrical Engineering.
Abdoul Gobitaka – Community Manager – Mr. Gobitaka will focus on financial planning
and will work closely with the management team to execute the stated marketing strategy. After
emigrating from Togo, Abdoul put himself through college by driving a taxi in New York City.
He noticed how empty cars were when traveling to and from airports and he sees Rideorama as
the solution to this problem. He knows Rideorama will change the way we commute in the US.
Abdoul received his BA in Finance & Investments from Baruch College.
Rideorama 28
References
1. Research and Innovative Technology Administration (RITA) Air Carrier Statistics (2000-
2010)
2. Airport Cooperative Research Program (ACRP) Report 4 – Ground Access to Major Airports
by Public Transportation (2008)
3. Transportation Cooperative Research Program (TCRP) Report 83 – Strategies for Improving
Public Transportation Access to Large Airports (2002)
4. Transportation Cooperative Research Program (TCRP) Report 62 –Improving Public
Transportation Access to Large Airports (2000)
5. S&P Ratings Services – Philadelphia, Pennsylvania Philadelphia International Airport;
Airport; Joint Criteria (2010)
Rideorama 29
Appendix
Table 12: Rideorama Pro-Forma Income Statement
Rideorama Income Statement
Income Statement 2012E 2013E 2014E 2015E
Revenue
Total Revenue 32,480 547,120 6,019,680 28,294,800
COGS
Server/Bandwidth Costs 2,400 5,000 7,500 10,000
Credit Card Fees 5,116 86,171 948,100 4,456,431
Total COGS 7,516 91,171 955,600 4,466,431
Gross Profit 24,964 455,949 5,064,080 23,828,369
Operating Expenses
Marketing (Online & Travel) 20,000 150,000 300,000 700,000
Engineering 40,000 250,000 350,000 700,000
D&A 11,000 14,200 18,800 26,400
SG&A 120,000 300,000 600,000 1,350,000
Office Rental 0 7,000 12,000 14,000
Insurance 25,000 30,000 60,000 100,000
Legal/Accounting 10,000 10,000 20,000 30,000
Other Personnel 0 60,000 200,000 500,000
Total Operating Expenses 226,000 821,200 1,560,800 3,420,400
Operating Income ($201,036) ($365,251) $3,503,280 $20,407,969
Interest Expense (Income) (41) (694) (2,666) (9,720)
Income Tax Expense (70,362) (127,838) 1,226,148 7,142,789
Net Income ($130,632) ($236,719) $2,279,799 $13,274,900
Ratios & Assumptions
Revenue Growth 1,584.5% 1,000.2% 370.0%
Gross Margin 76.9% 83.3% 84.1% 84.2%
SG&A Margin 695.8% 150.1% 25.9% 12.1%
Operating Margin (619.0%) (66.8%) 58.2% 72.1%
Net Margin (402.2%) (43.3%) 37.9% 46.9%
Effective Tax Rate 35.0% 35.0% 35.0% 35.0%
Rideorama 30
Table 13: Rideorama Pro-Forma Balance Sheet
Rideorama Balance Sheet
Balance Sheet 2012E 2013E 2014E 2015E
Current assets:
Cash and cash equivalents 424,361 203,848 2,839,026 17,582,197
Accounts receivable, net 178 2,998 32,985 155,040
Total Current Assets 424,539 206,846 2,872,011 17,737,237
Property and equipment, net 4,000 9,400 18,800 37,200
Intangible and other assets, net 40,000 36,400 31,200 24,400
Total Assets 468,539 252,646 2,922,011 17,798,837
Current liabilities:
Accounts payable 2,192 13,699 19,178 38,356
Income taxes payable (17,591) (31,959) 306,537 1,785,697
Other accrued expenses 14,570 38,258 83,848 187,436
Total current liabilities (829) 19,997 409,563 2,011,489
Total liabilities (829) 19,997 409,563 2,011,489
Shareholders' equity:
Paid-in capital 600,000 600,000 600,000 600,000
Retained earnings (130,632) (367,351) 1,912,448 15,187,347
Total shareholders' equity 469,368 232,649 2,512,448 15,787,347
Total liabilities and shareholders' equity 468,539 252,646 2,922,011 17,798,837
Rideorama 31
Table 14: Rideorama Pro-Forma Cash Flow Statement
Rideorama Cash Flow Statement
Cash Flow Statement 2012E 2013E 2014E 2015E
Cash flows from operating activities:
Net income (130,632) (236,719) 2,279,799 13,274,900
Adjustments to reconcile net income:
Depreciation and amortization 11,000 14,200 18,800 26,400
Changes in assets and liabilities:
Accounts receivable (178) (2,820) (29,987) (122,055)
Accounts payable 2,192 11,507 5,479 19,178
Income taxes payable (17,591) (14,369) 338,497 1,479,160
Other accrued expenses 14,570 23,688 45,590 103,588
Net cash provided by operating activities (120,639) (204,513) 2,658,178 14,781,170
Cash flows from investing activities:
Purchases of property and equipment (5,000) (8,000) (15,000) (30,000)
Purchases of intangible assets (50,000) (8,000) (8,000) (8,000)
Net cash used in investing activities (55,000) (16,000) (23,000) (38,000)
Cash flows from financing activities
Proceeds from preferred stock 600,000 0 0 0
Net cash provided by financing activities 600,000 0 0 0
Net increase in cash and cash equivalents $424,361 ($220,513) $2,635,178 $14,743,170
Cash and cash equivalents at beginning of year 0 424,361 203,848 2,839,026
Cash and cash equivalents at end of year $424,361 $203,848 $2,839,026 $17,582,197
