Growing up in the Hamptons, Alex Esposito and James Mirras knew one thing to be true: The beach was great, but the parking sucked.
Between the crowds and the permit-required parking lots, there was rarely an easy — or cheap — way to enjoy a summer day on the sand.
In 2009, Esposito and Mirras, now both 30, finished their undergraduate studies at the University of Florida and Bentley University, respectively. They toyed with the idea of starting a shuttle bus company as a solution to their childhood grievance.
But there were vehicle costs, like insurance, maintenance, and fuel, to consider. Plus, the two were eager to begin their professional lives; Mirras was off to work at Morgan Stanley and Esposito was pursuing his MBA at Bentley.
“We ended up putting the idea on the back burner,” Esposito told Business Insider. That is, until a few years later when a discussion about using freebies as a tool to sell products came up in one of Esposito’s business school classes.
“So, Starbucks gives away internet to sell coffee, Gillette gives away razors to sell blades. James and I kind of scratched our heads and said, well, what if we made our beach bus free?” Esposito told Business Insider. “We decided to put together this model where, if electric cars can cut out the cost of fuel, and if advertisers can pay to sponsor the service, then we can provide a totally free service for this one-to-two mile gap.”
They ran with the idea — but kept at their day jobs — and founded the Free Ride in the summer of 2011, debuting with a few open-air, fully electric cars operating in East Hampton. Riders could either hail a shuttle from the app, or wave one down on the street for a ride to the beach or a local restaurant. The next summer, the network expanded to include routes in Montauk and Southampton.
In a crowded summer destination like the Hamptons, Esposito and Mirras found companies were willing to pay big for innovative and interactive advertising. Big enough, in fact, that it covers operating costs, and riders don’t have to pay a dime.
By the following summer, Mirras had left Morgan Stanley to run operations for the Free Ride full-time. They added additional routes in South Florida and Santa Monica, California, and were soon partnering with household brands like JetBlue, Corona, Coco-Cola, and, later, L’Oreal. Since then, ad revenues have surpassed seven-figures, nearly doubling every year, according to Esposito.
Not only are the cars wrapped in fun, cheeky advertisements, some of the companies provide freebies, like cold drinks, snacks, and beauty product samples, to riders. Plus, an iPad inside each car doubles as an interactive video advertisement and photo booth.
Esposito eventually quit his job at consulting company Accenture to join Mirras to bring the Free Ride to other cities around the country.
“I think a lot of people nowadays look at startups as a way to get away from a desk job, but you really need to create the startup before you can take that leap, and I think that’s something we both did well,” Esposito said.
They recently started expanding beyond beach-only routes. Late last year, they partnered with the city of San Diego to launch FRED, Free Ride Everywhere Downtown, an e-hailing service covering about a two-mile radius within the city.
Esposito calls it a “micro-transit solution” because it fills a gap that buses, trains, yellow cabs, and even Uber and Lyft don’t fill: short, free rides you can request via an app or hail from the street.
“The response was tremendous, we had over 20,000 people sign up for the app within the first six weeks of the program, and almost 4,000 rides a week in San Diego,” Esposito said.
Esposito envisions a more efficient, eco-friendly, and data-driven solution to public transit, and says other municipalities have reached out to bring the Free Ride to their cities as well. “The idea of having three buses that carry 25 passengers running all the time is just horribly inefficient,” he said. “That’s really where our eyes kind of opened up and we said, why have three caterpillars when we can have 20 ants?”
The Free Ride currently operates a fleet of 82 shuttles — all driven by Free Ride employees rather than contractors — operating throughout the Hamptons, South Florida, Southern California, and the Jersey Shore, each with its own operating hours and pre-determined route. Cars that aren’t being used in one market, like New York during the winter, are either transferred to a busier market, or used for private events.
To date, the company has given 1 million free rides.
“We haven’t burned an ounce of fuel doing it and it’s really been exciting seeing the business pivot from what was once a fun, little beach shuttle idea into now what we see as being a huge micro-transit solution that’s applicable in areas all over the country and all over the world,” Esposito said.