Transportation is vital for promoting economic and social mobility within cities. Those living outside cities may assume that public transportation and ride-sharing options abound. But the reality is far less generous than that. The further that residents live from a city’s center, the more they are plagued by a lack of transportation options. This leads to significant amounts of commute time and sometimes high costs for those who need to go to and from work, school, or elsewhere on a daily basis. Transit deserts are present in every major city across the U.S. In these areas, transportation is the second-highest cost (behind housing) for the area’s residents.

In transit deserts, transportation options may exist. But they may be too expensive for residents to use regularly (like Uber or Lyft). Or they may be infrequent, like public busing or rail options. According to one source, in Douglaston, Queens 65% of commuters drive and only 25% use public transportation options. A big reason behind this stems from the fact that the average one-way commute for those driving is between 30 and 35 minutes. That’s less than half the 70 to 75 minute average for those utilizing public transport. This has led to the rise of dollar vans (also known as dollar buses). For a small fee, usually around $2 to $4 for a one-way trip, individuals can be ferried by a bus driver along a certain route to where they need to be. These dollar vans, though, operate in a rather disorganized manner currently. They also often operate along routes that do a lot to address cost-consciousness but little to alleviate the transit desert issue.

The management team at Dollaride hopes to address this shortcoming in the market. Their approach to handling the problem is conceptually simple. Through their app, they allow dollar van drivers to sign up as transportation providers. Users can then download the app, submit a request to be picked up, and hop on the van when it comes their way. Payment for services can be made directly through the app. This feature alone increases revenue transparency for the transportation service providers.

In exchange for using the app, Dollaride plans to charge most riders a fee of around $2 per trip (from which they will collect a service fee of $0.50-$1). However, the company plans to give its drivers freedom to raise the ride charge when appropriate (according to season or time of day). Additionally, some routes can be more expensive due to distance or demand for them. This can result in ride charges of up to $5 or $6. Dollaride plans to maintain margins of around 30% on ride charges with the rest going to the drivers. Dollaride also hopes to land corporate enterprise contracts that will help them to finance new routes. Another future offering involves delivery courier services. While the delivery courier service is still in the works, COVID-19 has accelerated Dollaride’s acquisition of corporate enterprise contracts. 

As of today, Dollaride has seen its over 200 drivers provide more than 800 rides. The company currently has over 2,200 individual riders on its waitlist. Management believes that 120,000 commuters use dollar vans in New York City. They calculate this as an $86 million opportunity from ride charges alone. All operations to-date have occurred within New York City, with a special emphasis on the outer boroughs. Presently, it has LOIs (Letters of Intent) with New York City’s Department of Transportation, the Mayor’s office, and some New York State members of Congress. Dollaride also has plans to expand to 51 other major cities over time.

Although service fees on rides are the primary method of revenue generation, Dollaride has also secured paid contracts with New York-based government offices and organizations. These contracts account for much of the company’s claimed revenue for 2019 and 2020. The company’s Form C does not reflect these amounts (due to generally accepted accounting principles — or GAAP). In early 2020, Dollaride began collecting money for a contract acquired in 2019 (while the contract was finalized in 2019, no money was collected that year). The work for the 2020 contract is scheduled to begin in Q3 of this year. Including those contracts, the company booked $102,000 in sales in 2019 and $465,000 so far for this year. Dollaride generated a net loss in 2019 of $133,859, up from a loss of $20,167 in 2018. Its operating cash outflows were similar at $133,853 and $12,541, respectively.

Some markets are more challenging to assess than others. Currently, there is no formal estimate by analysts regarding Dollaride’s obtainable market. However, Dollaride’s total addressable market falls under the umbrella of the global shared mobility market. According to one estimate, this market is worth about $383 billion today. With an 8% annualized growth rate, it should expand to around $608 billion by 2026. This market is a massive umbrella for a myriad of opportunities. It covers everything from traditional forms like public transportation to ride-sharing services like Lyft and Uber. According to Deloitte, micro-mobility (e-scooters and dockless bikes) is a further recent addition to the shared mobility market.

These options should help to address transportation issues faced by millions of city-dwellers. However, the affordable options often fail to tackle the transit desert issue. One option historically used to close the gap has been adding to existing public transportation, but that cost is quite high. In cities across the globe, the average cost per mile of extra rail is around $300 million. In a city like New York, it can be as high as $2.5 billion. Even busing options like the express busing in Queens are costly. Despite an average cost per trip of $6.50 for each rider, the subsidies necessary to maintain those operations can be as high as $52 per rider per day. These costs make it unlikely for public transportation to be expanded to the degree needed to eliminate transit deserts.

One source we found suggests that in 52 cities across the US, 4.5 million individuals live in transit deserts. The management team at Dollaride uses this number to estimate a market opportunity of $4.32 billion for the firm. While it is unlikely that Dollaride will retain all of those customers all the time, there is still significant opportunity for the company. As long as the ride charges are cheaper than competitors like Uber and Lyft while covering more routes than current public transit, Dollaride is poised to capture an attractive market share.

In order to keep growing, the management team at Dollaride is seeking additional capital. Their goal right now is to raise another $1.07 million. The smallest amount they will accept in a round, though, is $25,000. In exchange for investment, with a minimum commitment per participant set at $100, the firm is issuing SAFEs. These will convert upon the next capital raise for the firm, subject to an $8 million valuation cap and factoring in a 20% discount to the value of the firm. As of this writing, Dollaride has $31,192 committed to its raise.

Though there’s a sizable team behind Dollaride, the two key individuals in charge of it are its founders. The first of these is Su Sanni, Dollaride’s CEO. At present, he is also the President of Technology Solutions at Allegiance Fundraising. In the past, he served as the co-founder and CEO of WeDidIt (which was acquired by Allegiance Fundraising last year). Prior to WeDidIt, Sanni did sales and account management at the Meltwater Group. Sanni is active with multiple philanthropic groups, including New York Needs You (the founding chapter of America Needs You) and the Boys’ Club of New York. Sanni has also been named as a finalist for The David Prize, an award for New York residents who are transforming and improving the city.

Chris Coles is Dollaride’s other founder and its CTO. He is currently employed as a Technical Lead at Truss. In the past, he held the role of Consulting Software Engineer at Supportful and before that he was a Venture Engineering Fellow at 645 Ventures. Coles also has engineering experience with other venture-backed startups (Simplifeye and Lover.ly).  

Our team has rated Dollaride as a Deal To Watch. This high-level ranking reflects our belief that there could be an interesting opportunity for the firm. The company is working to address a big problem in cities across the globe. Not only that, but as cities grow, this issue could become even more pressing. Traction generated by the team is encouraging, and its monetization strategy makes sense. This is not to say that everything is great about the business though. The valuation does appear lofty for where the firm is. There is also the question of competition as the advent of more options could one day lead to a race to the bottom in terms of pricing. However, we believe that the significant opportunity paired with the social impact and early adoption traction make Dollaride worthy of investors’ consideration.