Dive Brief:

• San Diego's downtown development agency has voted to expand its Free Ride Everywhere Downtown (FRED) shuttle service, according to The San Diego Union-Tribune. The city will spend $5.7 million over five years to increase the number of shuttles from 17 to 30.
• The all-electric shuttle program functions like a ride-share service except that it's free, funded through advertising on the vehicles. The vehicle expansion project will be funded through parking meter and downtown public parking garage revenue.
• Proponents of the service want the expansion because demand for FRED has grown so much that users now get a "no drivers available" message up to 50% of the time they request a ride.

Dive Insight:

New York-based The Free Ride launched its shuttle service in 2011 and brought it to San Diego in 2014. At that time it had five shuttles that were paid for by advertising on billboards on the sides of the vehicles, and it increased service last summer.

In addition to nearly doubling the number of FRED vehicles in downtown, the $5.7 million in project funding includes upgrading about a dozen of the existing shuttles to run on longer-lasting lithium ion batteries. Thus far, the electric vehicles have logged about 200,000 miles, which reportedly has saved approximately 12,000 gallons of gas. Funding the expansion through parking meter and parking garage revenue is a unique plan, although it's unclear how that will work long term as the number of drivers and parking spaces both decrease in cities.

Providing this free service benefits residents but questions are circling about whether the model is sustainable. City leaders cautioned that the model of funding FRED through advertising alone isn't working. Advertising only makes up about $212,000 of the current $1.6 million budget. That is expected to increase to $1.2 million by 2020 when the extra vehicles become operational, which would cover about half of the expenses. City leaders are seeking supplemental funding, such as applying for more than $7 million in various grants. They're also looking into possible partnerships that would allow FRED to expand outside of the downtown and into other parts of the city.