Rideorama Business Plan

Casey George Ogheneovo Dibie Abdoul Gobitaka Kamal Sabi

Rideorama 1

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 2

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 youre 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 competitors 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 coopting 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 intrametropolitan area travel that bridges the gap between public and private transportation. In

Rideorama 3

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. Rideoramas 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 4

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 5

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 members 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 arent answered elsewhere in a chat interface. Direct contact information (full names,

Rideorama 6

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 7

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 passengers request. Payment is released to the driver 24 hours after the rides 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 Rideoramas 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 Rideoramas 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 8

Figure 6: Total US Airport Trips (in Millions)

1550.0 1500.0 1450.0 1400.0 1350.0 1300.0 1250.0 1200.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
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,

Rideorama 9

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
80.0% 73.0%
70.0%

60.0%

50.0%

40.0%

30.0%

20.0%
9.8%

10.0%

7.7% 3.7% 2.7% 3.1%

0.0%
Private & Rental Cars Taxicabs/ Town cars Charter Buses/ Prearranged Limos Shared Ride Vans Express Bus Other

Source: TCRP Report 62, TCRP Report 83, Rideorama Analysis

Figure 8A: Ground Access Mode Market Share by Airport

Private & Rental Cars 100.0% Taxicabs/Town cars Charter Buses/ Prearranged Limos Shared Ride Vans Express Bus Other

80.0%

60.0%

40.0%

20.0%

0.0%

Source: TCRP Report 62, TCRP Report 83, Rideorama Analysis

Rideorama 10

Figure 8B: Ground Access Mode Market Share by Airport

Private & Rental Cars 100.0% Taxicabs/Town cars Charter Buses/ Prearranged Limos Shared Ride Vans Express Bus Other

80.0%

60.0%

40.0%

20.0%

0.0%

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 groups likelihood of patronizing public transportation services. However, this increases the resident groups propensity to be the driver in a ridesharing transaction as airports are usually sited proximally to higher density areas [3].

Rideorama 11

Table 1: Percentage of air travelers who are local residents

More than 55% Atlanta Reagan National Dallas/Ft. Worth Kansas City New Orleans 66% 64% 57% 57% 56% 45% to 55% Boston Baltimore/Washington Seattle Washington Dulles Chicago O'Hare Oakland San Jose Denver Sacramento 54% 54% 54% 52% 50% 50% 48% 47% 46% 35% to 44% San Francisco San Diego Tampa Chicago Midway Phoenix Portland Salt Lake City 41% 40% 37% 37% 36% 36% 36% Less than 35% Los Angeles Las Vegas Orlando Ft. Lauderdale 32% 30% 23% 23%

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
More than 55% Sacramento Boston Seattle 45% to 55% 69% Dallas/Ft. Worth 59% Chicago O'Hare 57% Oakland Atlanta 54% 54% 52% 50% 35% to 44% San Jose Baltimore/Washington Salt Lake City San Francisco Los Angeles Fort Lauderdale Denver Portland San Diego 49% 47% 45% 43% 42% 41% 41% 40% 40% Less than 35% Phoenix Tampa Washington Dulles New Orleans Reagan National Orlando Las Vegas 38% 38% 33% 28% 29% 27% 17%

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, Rideoramas 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].

Rideorama 12

Competition Rideoramas 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, OnDemand 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 11th 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 Multi-Stop Bus & Rail Private Vehicles (Drop-off/Pickup) Express Buses and Vans Shared-Ride Vans Private Vehicles (Parked Remote) Taxicabs and On-demand Limousines Private Vehicles (Parked Airport) Rental Cars Prearranged Limousines Pain Fragmented Travel/Slowest Begging Friends Fragmented Travel/Slow Unpredictable Fragmented Travel Expensive Expensive Even More Expensive Even More Expensive

Rideorama 13

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 onsite 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 14

Table 4: Time From Downtown To Airport (min)

Car Taxi Parking (Terminal) Parking (Remote) Bus/Rail Super Shuttle
Source: Rideorama Analysis

SFO 20 20 30 50 54 80

DEN 36 36 46 66 80 144

IAH 30 30 40 60 64 120

LAX 23 23 33 53 100 92

ORD 27 27 37 57 60 108

ATL 19 19 29 49 31 76

BWI 19 19 29 49 46 76

MSP 19 19 29 49 25 76

Table 5: Price From Downtown To Airport ($)

Car Taxi Parking (Terminal) Parking (Remote) Bus/Rail Super Shuttle SFO $3.17 $50.00 $63.17 $26.96 $1.50 $17.00 DEN $6.46 $75.00 $60.46 $24.46 $2.25 $22.00 IAH $5.10 $52.00 $56.10 $26.10 $4.50 $22.00 LAX $4.61 $70.00 $94.61 $23.89 $1.25 $16.00 ORD $4.39 $43.00 $97.39 $31.39 $2.25 ATL $2.68 $36.00 $50.68 $20.65 $2.00 BWI $4.47 $24.00 $34.47 $24.36 $2.00 $23.00 MSP $3.03 $43.00 $57.03 $27.02 $2.25 $18.00

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

Rideorama 15

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 Operators of

transaction when you can just give your ridesharing friends cash in person?

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 dont 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 16

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
US Market Enplanements Car Access Non Business Resident (2010) Percentage Travelers Travelers 37,826,570 73.3% 34% 50% 23,021,935 77.7% 53% 41% 24,280,162 75.2% 43% 54% 13,974,969 82.0% 46% 57% 17,636,575 79.1% 64% 38% 26,058,041 65.3% 50% 54% 14,427,820 84.1% N/A N/A 20,141,377 67.6% 68% 42% 15,452,628 79.7% N/A N/A 9,679,761 85.6% 64% 45%

Rank 1 2 3 4 5 6 7 8 9 10

Code ATL DEN DFW SEA PHX ORD MSP LAX IAH SLC

Airport Atlanta Hartsfield Denver Dallas/Fort Worth Seattle-Tacoma Phoenix Sky Harbor Chicago O'Hare Minneapolis-St Paul Los Angeles Houston Bush Int'l Salt Lake City

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

Rideorama 17

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 18

To further target university students, we reach out to student organizations that would be interested in Rideorama. At CU Boulder, we identified the Collegiate Entrepreneurs

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 LaunchRocks 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 dont crystallize until about a week before travel. There will be limited opportunities to capture college students outside of these periods. Our websites 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 Rideoramas platform and are logged into Facebook, their post is shared with

Rideorama 19

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 dont 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 20

Boulder Easts email letter for marketing. In addition, we will be doing a guest blog post in EGo Carshares 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 isnt 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 Rideoramas 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 dont yield immediate losses. Our payment platform will initially use PayPal to process transactions as PayPal allows

Rideorama 21

chained payments for businesses our size. Credit card fees will be paid by Rideorama as we strive for transparency in payments. We dont 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. Denvers 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 sharedride vans are expensive versus other transportation options, the central business district is far from the airport, and the populace is environmentally conscious. Additionally, our teams

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
Distance (miles) Distance (min) Cost (miles) Cost (min) Boulder, CO (A) Westminster, CO (B) 43.8 27.1 50.0 35.0 $10.29 $6.37 $7.05 $4.94 A-B (C) 20.2 26.0 $4.75 $3.67 Deviation (D) 3.5 11.0 $0.82 $1.55

Source: Rideorama Analysis

Rideorama 22

Table 10: Average and Marginal Cost Driver Analyses

Average Cost Driver Price/Seat $20.00 Revenue $20.00 Cost $11.12 CC Fees $0.88 Rideorama Fees $4.00 Profit $4.00 Profit Margin 20.0% People Rideorama Taxi SS P/P Cost 1.0 $20.00 $115.00 $35.00 Marginal Cost Driver Price/Seat $20.00 Revenue $20.00 Cost $1.55 CC Fees $0.88 Rideorama Fees $4.00 Profit $13.57 Profit Margin 67.8% Seats Rideorama Taxi SS P/P Cost 1.0 $20.00 $115.00 $35.00

Source: Rideorama Analysis

Under our assumptions (Cost per mile equals IRS variable cost reimbursement rate of $0.235/mile) the scenarios 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 Rideoramas 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. Amazons EC2 cloud service provides a scalable and

Rideorama 23

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. Rideoramas 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 24

Table 11: Rideorama Pro-Forma Income Statement

Rideorama Income Statement

Income Statement Revenue Total Revenue COGS Server/Bandwidth Costs Credit Card Fees Total COGS Gross Profit Operating Expenses Marketing (Online & Travel) Engineering D&A SG&A Office Rental Insurance Legal/Accounting Other Personnel Total Operating Expenses Operating Income Interest Expense (Income) Income Tax Expense Net Income
Source: Rideorama Analysis and Estimates

2012E 32,480 2,400 5,116 7,516 24,964

2013E 547,120 5,000 86,171 91,171 455,949

2014E 6,019,680 7,500 948,100 955,600 5,064,080

2015E 28,294,800 10,000 4,456,431 4,466,431 23,828,369

20,000 40,000 11,000 120,000 0 25,000 10,000 0 226,000 ($201,036) (41) (70,362) ($130,632)

150,000 250,000 14,200 300,000 7,000 30,000 10,000 60,000 821,200 ($365,251) (694) (127,838) ($236,719)

300,000 350,000 18,800 600,000 12,000 60,000 20,000 200,000 1,560,800 $3,503,280 (2,666) 1,226,148 $2,279,799

700,000 700,000 26,400 1,350,000 14,000 100,000 30,000 500,000 3,420,400 $20,407,969 (9,720) 7,142,789 $13,274,900

Risks There are several outstanding risks for Rideorama as an enterprise. People are risk averse and may hesitate to share rides with people they dont 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 25

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 26

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 27

References 1. Research and Innovative Technology Administration (RITA) Air Carrier Statistics (20002010) 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 28

Appendix Table 12: Rideorama Pro-Forma Income Statement

Rideorama Income Statement

Income Statement Revenue Total Revenue COGS Server/Bandwidth Costs Credit Card Fees Total COGS Gross Profit Operating Expenses Marketing (Online & Travel) Engineering D&A SG&A Office Rental Insurance Legal/Accounting Other Personnel Total Operating Expenses Operating Income Interest Expense (Income) Income Tax Expense Net Income Ratios & Assumptions Revenue Growth Gross Margin SG&A Margin Operating Margin Net Margin Effective Tax Rate 2012E 32,480 2,400 5,116 7,516 24,964 2013E 547,120 5,000 86,171 91,171 455,949 2014E 6,019,680 7,500 948,100 955,600 5,064,080 2015E 28,294,800 10,000 4,456,431 4,466,431 23,828,369

20,000 40,000 11,000 120,000 0 25,000 10,000 0 226,000 ($201,036) (41) (70,362) ($130,632)

150,000 250,000 14,200 300,000 7,000 30,000 10,000 60,000 821,200 ($365,251) (694) (127,838) ($236,719)

300,000 350,000 18,800 600,000 12,000 60,000 20,000 200,000 1,560,800 $3,503,280 (2,666) 1,226,148 $2,279,799

700,000 700,000 26,400 1,350,000 14,000 100,000 30,000 500,000 3,420,400 $20,407,969 (9,720) 7,142,789 $13,274,900

76.9% 695.8% (619.0%) (402.2%) 35.0%

1,584.5% 83.3% 150.1% (66.8%) (43.3%) 35.0%

1,000.2% 84.1% 25.9% 58.2% 37.9% 35.0%

370.0% 84.2% 12.1% 72.1% 46.9% 35.0%

Rideorama 29

Table 13: Rideorama Pro-Forma Balance Sheet

Rideorama Balance Sheet

Balance Sheet Current assets: Cash and cash equivalents Accounts receivable, net Total Current Assets Property and equipment, net Intangible and other assets, net Total Assets Current liabilities: Accounts payable Income taxes payable Other accrued expenses Total current liabilities Total liabilities Shareholders' equity: Paid-in capital Retained earnings Total shareholders' equity Total liabilities and shareholders' equity 2012E 424,361 178 424,539 4,000 40,000 468,539 2013E 203,848 2,998 206,846 9,400 36,400 252,646 2014E 2,839,026 32,985 2,872,011 18,800 31,200 2,922,011 2015E 17,582,197 155,040 17,737,237 37,200 24,400 17,798,837

2,192 (17,591) 14,570 (829) (829)

13,699 (31,959) 38,258 19,997 19,997

19,178 306,537 83,848 409,563 409,563

38,356 1,785,697 187,436 2,011,489 2,011,489

600,000 (130,632) 469,368 468,539

600,000 (367,351) 232,649 252,646

600,000 1,912,448 2,512,448 2,922,011

600,000 15,187,347 15,787,347 17,798,837

Rideorama 30

Table 14: Rideorama Pro-Forma Cash Flow Statement

Rideorama Cash Flow Statement

Cash Flow Statement Cash flows from operating activities: Net income Adjustments to reconcile net income: Depreciation and amortization Changes in assets and liabilities: Accounts receivable Accounts payable Income taxes payable Other accrued expenses Net cash provided by operating activities Cash flows from investing activities: Purchases of property and equipment Purchases of intangible assets Net cash used in investing activities Cash flows from financing activities Proceeds from preferred stock Net cash provided by financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year 2012E (130,632) 11,000 (178) 2,192 (17,591) 14,570 (120,639) 2013E (236,719) 14,200 (2,820) 11,507 (14,369) 23,688 (204,513) 2014E 2,279,799 18,800 (29,987) 5,479 338,497 45,590 2,658,178 2015E 13,274,900 26,400 (122,055) 19,178 1,479,160 103,588 14,781,170

(5,000) (50,000) (55,000)

(8,000) (8,000) (16,000)

(15,000) (8,000) (23,000)

(30,000) (8,000) (38,000)

600,000 600,000 $424,361 0 $424,361

0 0 ($220,513) 424,361 $203,848

0 0 $2,635,178 203,848 $2,839,026

0 0 $14,743,170 2,839,026 $17,582,197

Rideorama 31