S1E28: Electric Last Mile Shuttles

Between the Lines S1E128: Electric Last Mile Shuttles

with Alex Esposito

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Why will Electric Last Mile Shuttles help save the planet?

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On this week's episode of Between the Lines, we chat with Alex Esposito. Alex is the Co-Founder and CEO of Circuit. In 2011, Alex Co-Founded Circuit with James Mirras, as a seasonal parking shuttle. Since then, Alex has worked to build successful EV services for cities and private companies around the US, creating valuable relationships, impactful results and a growing footprint. Since starting, Circuit has expanded to over 20 cities and provided over 5 million rides without burning an ounce of gas.

A Forbes Next 1000 Entrepreneur, Alex has participated in Urban-X, LACI, and CivStart Accelerators and been a featured speaker at events like Smart Cities NY, 20-20 Cities, ACT, Accelicity and Safe Streets Summit. Alex attended Bentley University, where he received his MBA. Prior to starting Circuit, Alex worked for Vistaprint (NASDAQ: VPRT) and at Accenture (NYSE: ACN) Alex is based between Circuit’s NY and FL offices.

And check out Alex's favorite commuting song on our exclusive commuter playlists on Spotify!

-Jessica, The Allman Brothers Band

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Episode Transcript

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-(Intro) Commutifi presents Between the Lines with Andy Keeton. Each week we explore the challenging issues transportation demand management professionals face on their journey to transition commuters from driving alone to more sustainable, shared and active commuting habits. Be sure to subscribe to hear next week's episode and check out our exclusive commuter playlists on Spotify. This is Between the Lines with Andy Keeton.

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-(Andy Keeton):  Hi everyone and welcome aboard to the Between the Lines podcast. I'm Andy Keeton and today we're joined by Alex Esposito, who's the co-founder and CEO of Circuit, which was originally founded in 2011 as a seasonal parking shuttle. But since then, Alex and his team have worked to build successful EV services for cities and private companies around the US. Since starting, Circuit has expanded to over 20 cities and provided over 5 million rides without burning an ounce of gas, which is really cool. We're going to get into what they're... what that means and what they're doing. Alex is a Forbes Next 1000 entrepreneur. He's participated in Urban X, LACI and Silstar accelerators and been a featured speaker at events like Smart Cities New York 2020, Cities, Act, which is where we met, Excelity and Safe Street Summit. So, we're excited to have you on Alex today, thanks for being here.

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-(Alex Esposito) Yeah, it's great to be here. I'll have to.... we'll have to add Between the Lines to the bio.

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- (Andy Keeton) I agree! I would be thrilled to do that, thank you. So, today we're talking about really what Circuit's doing, which is Electric Last Mile shuttles and why these Electric Last Mile shuttles will help save the planet. So, I think, to frame the whole conversation, it's probably important for us to actually understand what the problem is. So, Alex, you want to tell us what is this first-mile/last-mile problem? What does this mean?

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-(Alex Esposito) Yeah. So, it's interesting, because we... I could probably spend the whole time talking about the problems here and I think ultimately the problem is there is traffic and congestion in downtown areas and that's really the result of too many single-occupancy vehicles in our cities and so that creates problems with economic product productivity, problems with greenhouse gas emissions, quality of life, there's health issues related to those emissions. So, traffic, I guess, is the problem, but it's really caused by too many single-occupancy vehicles on the road. And so, when we think about the last-mile problem, I think that the typical answer is connecting people with a train, a bus or an existing transit hub. You can take a train or bus into a city, but how do you get to that bus or how do you get from that bus? And that's the textbook first/last-mile problem, as it relates to transportation, but I think we've also seen that short-range distances are really a big problem too and you have a lot of cities where people will drive their own car from one side of the city to the other or people will drive around in circles looking for parking spots and clogging up the streets because they don't want to park at that distant parking spot, because it's a mile away. And so, there's a lot of issues in the space, but the common theme is really short-range distances in overly congested areas.

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- (Andy Keeton) I think that makes sense. So it's going beyond the just... the traditional first/last-mile's problem, which is, like you said, a train, a bus works well to get you long distances, but maybe not that the last few blocks. But actually, going to short distances as well and it reminds me actually when I was in high school, growing up in the suburbs of Denver, when it was cold out, I lived less than a mile away from school, I would drive my car like across the street because it was too... I didn't want to walk and the school bus wouldn't pick anyone up within a mile of the school. So, it's pretty funny it's kind of like: hey, if we had a little shuttle for that, I could have taken that instead.

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-(Alex Esposito) Yeah, absolutely, and it's interesting. We were looking at something with the MTA in New York and they were looking at transit deserts and they were defining those as about 0.6 miles and it seems like a short distance, but if you're waking up in the morning and it's cold out, in your example, it's that 15-minute walk in cold weather and it's just not a comfortable experience. And so, unfortunately there's a lot of areas that face those issues and I think that's where we've seen a lot of declines in mass transit, which is really the best way to reduce cars on the road. But I think getting people to mass transit is where it gets a little trickier.

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-(Andy Keeton) Yeah. So, you all at Circuit have come up with a solution to this, which is these Electric Last Mile shuttles. Can you tell us a little bit more about what is this micro-shuttle? What is a shuttle like, that you guys have put together? And a little bit about how this actually helps kind of solve the problem?

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-(Alex Esposito) Yeah, sure so it's basically... it's a tech-enabled short-range shuttle service. So we sort of sit between the old about town trolleys, that would run around downtown areas and some of them still exist, that unfortunately the rideshare companies have really pulled people away from, because people want things at their fingertips, they want things on demand. So, we sit sort of between those legacy about town trolleys and now scooters and bikes, in the sense that we're both focused on short distances. But I think, what we've tried to do is take the user experience and the on-demand features, that riders have shown us that they like about the Ubers and Lyfts of the world, and set those up in more controlled environments, where we are focused on zero to three miles. So you can take out your phone request a ride just like a TNC, but both your pick-up and drop-off have to be within your geofence coverage area. We also use all W2 drivers, which is great for economic activity, job creation, but I think, frankly, it's made things a lot easier, because we have an awesome team of drivers that we can depend on and that the riders have gotten to know and enjoy. And then we work closely with cities to help them with their solutions and help reduce the cost of other antiquated options or help to drive more ridership to existing transit hubs, using the infrastructure that's already there. So, if you're a rider, it's great because it's a free or low-cost way to get around. if you're a city, it's a greener, a cheaper, easier alternative to some of the other options, and then, obviously, with everything being electric, there's an environmental impact as well.

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-(Andy Keeton) So, I think we'll get into it in just a second, because I think, maybe the most exciting thing to talk about is actual real-world examples of this. But before we get that, I'd like to key in on that last piece that you kind of mentioned, is the electric shuttle piece. So, first it'd actually be interesting to me, to understand a little bit more about why you chose electric shuttles versus maybe just a traditional gas-powered shuttle, and what are the benefits, maybe environmentally, maybe cost-wise as well, what are the benefits to this system, by having electric shuttles.

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-(Alex Esposito) Yeah, it's interesting you brought that up, because maybe we were a little naive at first, because running fleets of electric cars is definitely more difficult than we thought. But I started the business with an old friend, James Miras, and I was actually working for a consulting company and he was working in banking, and we had this idea to do a beach shuttle and we had kicked around the idea there was an overcrowded parking lot in East Hampton, New York, which is where we grew up. Overcrowded parking lot at the beach in this totally underutilized lot in town and there was about a 1.2-mile distance between the two. So we had thought about doing a beach bus and then we looked into the cost of fuel, the cost of insurance, what do you charge somebody to go a mile, what happens if it rains, and then we thought, well, if we made it electric that would eliminate the fuel costs, it would also reduce the emissions at the beaches caused by people driving around in circles looking for parking, and they're also noticeable. So our initial business was fully ad-supported, where we worked with different companies from Corona to JetBlue to wrap the cars and the electric vehicles were a little bit more noticeable, so it was really the... that was actually a factor initially, and then I think we opened up this can of worms, that is operating fleets of electric vehicles with range anxiety and have learned a lot along the way. But they've been... fortunately the vehicles have gotten better, there's now more vehicles available than there used to be. But we're about 95 % of our fleet is all GEM Global Electric Motors vehicles, that are made by Polaris, and then we have done some stuff with some vans and longer-range options, but yeah, sort of fell into this in the early days and now have realized that we... you've learned a lot, and a lot of those lessons learned we're now sort of passing on to our customers, as cities are now sort of ramping up their efforts towards electrifying fleets.

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-(Andy Keeton) Yeah, I mean if you started this back in 2011, that's pretty early on in the EV kind of lifecycle, I guess, so yeah, you were pretty pretty visionary there in picking that out, but certainly a lot to learn from. And these vehicles are really cool too. If people haven't seen them, I mean, just go to their website, go to Circuit's website and you can see. I mean they're pretty cool-looking. It's kind of fun, like it seems it'd be more fun to jump in one of these than just like a regular car or a regular bus or something. Does that help like people like "hey this is cool. I want to be in this car"?

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-(Alex Esposito) It's really funny you brought that up, because we... my business partner and I have spoken about this a lot. We survey our riders and we hear time and time again, like it's more fun than taking another service and we're like, well, what do we do with fun? How do you measure fun? What are the metrics here? And I think, ultimately, if you make the experience better for a rider, then more riders will use it, and I think what's overlooked a lot in transportation is really the cost per rider metric, which we focus on really heavily, which is, for those who are not familiar, what did the city spend on this transportation service minus what did they get back in fares or ad revenues, divided by how many people rode it and I think there's been such a focus on the numerator of that equation, of how do we make this cheaper, how do we get more revenues, how do we rise fares or how much do we raise fares. But really, if you focus on the denominator, you're leading to the same result. So, by making it more fun and getting more people to ride it, you can actually reduce the cost from a city's perspective.

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-(Andy Keeton) Yeah, that's really interesting absolutely. I mean, I've certainly been on a bus before as the only person on it, and sitting there going, this gotta be really expensive. I'm in like a stretch diesel limo here by myself, So yeah, it makes sense, fill up the vehicles you can actually get that cost per rider down.

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-(Alex Esposito) Yeah, exactly and I think... we're big fans of buses and transportation, but really, when they're full and it's not how many seats it has, it's how many butts are in those seats and I think if.. buses unfortunately have probably been impacted the most by the TMCs, but if you look at buses from getting from one city to another city, that's still a great solution. It's just a matter of getting people to the bus and reducing those stops, so there's shorter headways and a better passenger experience and ultimately more people on those buses and so we see ourselves as being a good first/last-mile connector to both trains and those bus routes.

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-(Andy Keeton) By working in tandem, not kind of against them, it helps them both. I mean, I think that's great, and that's kind of getting at this whole transportation demand management, TEM, how can we create a system that enhances every single aspect of it. I like this as a solution in that toolbox. So we've talked a little bit about the actual solution, we talked about the problem. Let's look at where this actually works and the people using it. Can you tell me at first, I guess, what types of markets are using it? You mentioned earlier, kind of downtown cores. Is that really who's benefiting most? Who is actually using this service?

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-(Alex Esposito) Yeah it's... so, again, we started as an ad-supported business that was a beach shuttle and then we kept our desk jobs for the first few years and it wasn't until about three years later that we started doing this full-time and then, shortly after that, we won our first contract with the city of San Diego. And the issue that they had was the demand for parking was really high and they're... it was causing a lot of traffic and congestion and there are also the major transit hub, specifically the train station was in the westernmost part of the city, so you have a lot of commuters coming down from North County, that aren't taking the train because it's a long walk from the train. So it was sort of a two-pronged approach to how can we reduce the demand for parking and also help, encourage people to use the train. But, if people are using the train they don't need to park, so the two kind of go hand in hand, and so that was our first step into working with cities and we deployed a program there in 2016 that has been a huge success and embraced by the community. It's called FRED, Free Ride Everywhere Downtown, and then that opened up... that's when we realized wait this beach shuttle idea is actually more of an urban last-mile transportation solution than a beach, a simple seasonal beach shuttle and it was really exciting and then we started to see more customers reach out with different but similar problems that could be remedied by very similar solutions. So, another example in New Rochelle, New York, which is a suburb of New York City, it's about a half hour by train from New York, they, like many other towns on that train line, had leased out the parking spots at the train stations, so they were out of... they had new developments coming online and out of spots at the train station. So, if you live a mile away and you can't park at the train station, it's not as attractive of a commuter city. So, instead of deploying a fixed route trolley that was going to be really expensive or building a new parking garage, we sort of became this commuter shuttle for the area and then that's evolved from there too So, yeah, common theme is short distance, but I think we've sort of seen similar but slightly different problems in a lot of different areas and geographies and more recently some disadvantaged neighbourhoods have become a bigger focus, where you see sort of this perfect storm of issues, where there are often times far from transit hubs, commuting costs make up a larger portion of those residents incomes, typically air quality is not as good because they're either near older industrial areas or nearby highways and electric vehicle adoption is the slowest, because when EVs first came out it was really looked at as more of a luxury and so, you know for all those reasons, we've been seeing a lot more of a focus both in some of the routes that were already in, but also from some of the inbound requests that we see for some of the disadvantaged communities that are in transit deserts.

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- (Andy Keeton) Yeah, I really like that equity piece. I mean, that's not something I thought about at first, but it makes a lot of sense. It's that this can really solve a number of problems in disadvantaged communities. It makes a lot of sense. So, you mentioned New Rochelle... I think people might recognize the name from the very start of the co-pandemic here in the U.S. I wonder how you all... How the project there evolved. Once Covid hit that community really hard at the start, you know, was this... Did the program just kind of fall apart? Like what is... Where is it now? What did it do?

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- (Alex Esposito) Yeah, I mean it was interesting, because when Covid hit we definitely felt an impact on the advertising side of the business, but at the same time we kept sort of growing the transit side of the business and so we kind of look at the business as, you know, we work with transportation customers to deploy these solutions and then we are able to work with our advertising partners and through a revenue share, reduce some of the cost for the transportation customers. So, anyway, back to New Rochelle, yeah. As I mentioned that was really designed to be a commuter shuttle and with work from home and then New Rochelle was impacted hard and fast by the pandemic, obviously you had a lot less people commuting. So, it was a big question for us. And then what we saw was, we actually work closely with the city who's just been amazing um in New Rochelle and very proactive and then 511NY Rideshare who I was with at the act conference and the problem they had was a lot of which there was a ton of visiting healthcare workers that were staying at a hotel. So the hospital there had just been bombarded with patients very early days of Covid in the U.S. and they were walking from the hotel that had put up a lot of these healthcare workers. Some came from as far as Georgia and it was about a mile away and so while we were slower on the commuter side of things, we were able to sort of shift that program to help get some of these visiting healthcare workers to and from the hospital. Then from there, we expanded the coverage area to include testing facilities and one of the grocery stores and so. The city ended up actually adding more cars to the location. Then we added vaccination sites and so. It sort of evolved from being this commuter shuttle to now, well this is lower occupancy and everyone gets their own doors, so it's better divided than a bus would be and so it became sort of this safer neighbourhood shuttle to help with things like visiting healthcare workers or getting people to vaccination sites.

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- (Andy Keeton) That's awesome. I really like that story. It really shows kind of the multi-use nature of this kind of solution, right; and the flexibility of it as well. Shifting from a first mile, last mile kind of commuter shuttle to actually bringing people all the way to work from their temporary, you know, homes and in hotels and to testing sites and grocery stores. I mean, that's really cool. That's a very cool project.

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- (Alex Esposito) Yeah, it was, you know, it was just great. I mean, the drivers were really the heroes there. I mean, being tested regularly, PPE, cleaning the vehicles...

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- (Andy Keeton) Sure!

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- (Alex Esposito) So, you know, hats off to them more than anybody, but you know, the city was excited to see us be able to be flexible with the service and a lot of... You know we spoke about that quite a bit at ACT where we are at, where we met, where you know, we should think about flexibility with our transportation planning, because if it's not a pandemic, you know, there's new innovations that come about and you know, I think in a lot of ways the scooters have woken up people to, you know... Things are coming fast and moving fast and we need to be agile in how we deploy our solutions.

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- (Andy Keeton)Yeah, so I wonder like... You've certainly mentioned public transit a lot and you've talked about working with cities who obviously have, you know, good relationships or hopefully good relationships with public transit systems in their area. If you're a city or you're a public transit agency and you're like, okay, this sounds cool. We want some flexibility in the future. We want to try this out as a, you know, last-mile solution. What is the process? Like, how does... How do you go about implementing this? Where do... Where should you think about doing it? Like, what should I be thinking about as a, you know, city planner transportation professional.

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- (Alex Esposito) Yeah, you know, we really custom design all of our solutions with our partners, so that means that they help us determine the operating hours. They help us determine how many vehicles are needed. We look at a number of other things. Census data, commuting habits, things like that, but we're there to help deploy the solution that they help us craft. And, you know, again those common use cases of... It really boiled down to how do we get people out of single-occupancy vehicles, out of their own cars and so. We normally work closely with local stakeholders to better understand the problem and then, what we've seen is, let's draft what we think the ideal solution might be. And then, that goes back and forth a few times and oh, "what about this" moments pop up and we start to come up with a solution that we think is going to work well, but you never really know until you do. Which is something we learned early on. Starting in our hometown, where we thought we knew exactly how this was going to work. In week one, "oh wait, what about that?" And so, we've been fortunate to win a handful of pilot programs. Some of those have been funded through grant money, others through cities directly. Some have even been funded from some of our corporate and advertising sponsors. And so, pilots are just a really great way to learn. I think you can analyze a ton in the onset and make that pilot more effective, but that pilot in a matter of weeks is probably going to teach you more than two months of analysis will.

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- (Andy Keeton) Sure! I think that's great. Pilots make a lot of sense for this kind of stuff. And yeah, I encourage anyone listening who's like : "Hey, this sounds pretty cool!" Reach out to Alex. I'll throw you out there. I'm sure you'll be happy to talk to people.

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- (Alex Esposito) Absolutely!

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- ( Andy Keeton) And feel free to reach out to us as well. We can connect you with Alex if you need to. This, I mean, this is great. This seems like a really interesting solution. I'm excited to see where this goes in the future, like, I want to travel to San Diego so i can take it. You know, go take the train and then take the shuttle the rest of the way. I don't really know if that would work. I don't know where I'd be going, but it's pretty stoked. That's pretty cool! But yeah, so we've run kind of close to the end of time here, so like we always ask, we have this question here to summarize everything. There's a lot here with electric last mile shuttles, but in a few sentences can you tell us : "Why will electric last mile shuttles help save the planet?"

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- (Alex Esposito) We might need more time for that one, but I think, you know, at a high level, globally, transportation is the largest contributed greenhouse gas emissions. Cities make up almost 70% of global greenhouse gas emissions and a third of all vehicle trips in the U.S. are two miles or less, so to us that just screams : "How do we reduce transportation emissions in cities?" And I think that electric vehicles are one thing, but if you're in your own electric car, that's a little bit better, but it's really not the long-term solution. The cement truck behind you is going to be burning fuel and there's traffic regardless of what type of car you're in, so shared electric vehicles is where that starts to make a lot more sense and we do believe that the future of downtown areas is made up and downtown transportation is made up of connected... Eventually autonomous and shared electric vehicles and we're trying to cross as many of those off as we can, as we look towards eventually an autonomous future, but I think that in the short term, getting people out of their cars and into shared vehicles is going to make a huge dent in both traffic and emissions; and that's a good thing for everybody.

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- (Andy Keeton) Yeah, that sounds great! I'm hoping that you bring it over to Montreal soon, because we've got a great public transit system, but there are some places that it doesn't reach. Get that last mile up to the canal or down to the canal from downtown sounds great! Well, this has been a great conversation. We have one last question for you, so stick around. It's everyone listening and watching. Thank you again for joining us this week. Make sure you hit that like button, subscribe, give us a rating. It all helps; And if you haven't yet, check out the video on YouTube. You can find where that is and learn more about the podcast and subscribe to our email list at : betweenthelines.io I really highly recommend subscribing to that email list as we send out more information about our guests and about the topics, each week, so you can dive a little bit more into what the conversation is about. So, that's said. We got this last question. We've been building this music playlist on Spotify for people's commutes and we've been filling that up with our guest's favourite songs so, do you have anything you'd like to add Alex?

- (Alex Esposito) Yeah, so you asked this question and it just immediately popped into my head and so, the song is Jessica by The Allman Brothers. So no lyrics to sing along to for the commuters out there, but it's funny, I was in college and I went to school in Boston; and my roommate at the time... Robbie and I were driving up to New Hampshire. It was like this nice sunny day and he had a sunroof; and we had all the windows down and this song came on; and he said : " I think this is like the best driving song!" Because it's very sort of upbeat and happy; and maybe it was just a sunny day and we were heading to New Hampshire for the weekend and the sunroof was open, but every time I hear that song, I always go : "Oh, this is the best driving song!" So, I hope others agree.

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- (Andy Keeton) That's great! I love it! I like the story behind it too. That's my favourite part about asking this question here. Hearing what people think about different songs. All right, well Alex, it's been a great conversation. I'm really excited to see where circuit goes and really the last mile kind of electric shuttle space as a whole. But, thanks again for being on and to our listeners and viewers, thanks for joining us again this week.

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- (Alex Esposito) Yeah, Andy, thanks for having me and I love what you guys are doing with the podcast and communify and everything; and I look forward to hearing more episodes.

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- (Andy Keeton) Awesome! Well, we'll see everyone again next week.

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- (Outro) Thanks for joining us on this week's episode of Between the Lines with Andy Keeton.Be sure to subscribe to hear next week's episode and check out our exclusive commuter playlists on Spotify!

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