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These days, I work from home, but it turns out I'm not the only one who considers carpooling to be a major inconvenience. People talk about walking, riding bikes, telecommuting, taking public transportation or buying hybrid cars, but aside from select local programs that let commuters hitch rides short distances like across the Bay Bridge into San Francisco, we give little attention to ride-sharing. As far as a broad nationwide solution to pollution and soaring gas prices, carpooling is an idea that seems to have gone out with the Carter Administration. This despite the fact that most people can't walk to work or afford a hybrid car. "Traditionally, carpooling has been almost like an arranged marriage: 'Meet Bill. He works down the hall from you and you will ride together forever,'" says Rick Steele, CEO and co-founder of NuRide, explaining why the old carpooling model is broken. Six years ago Steele and Thomas Murray, now the company's chairman, started work on a new system that would make use of the Internet to forge more connections between commuters and foster greater flexibility so that carpooling could be something drivers could elect to do when it suited them without having to lock in to a longterm commitment. Steele and Murray then spent the next few years fine tuning a business model that would not only attract a critical mass of riders but also generate enough revenue to allow it to expand nationwide. Today NuRide operates in five regional markets, including Minneapolis/St. Paul, Minnesota, New York metro and Connecticut, Washington DC, Hampton Roads, Virginia, and Houston, Texas, its largest market, where many participating riders come from the local offices of Chevron Corp., Exxon Mobil Corp. and other oil companies. The company hopes to eventually expand nationwide and to that end, Essex, Conn.-based NuRide, which has so far built its business with about $1.7 million in seed funding from the company's founders, angel investors and Contour Venture Partners, is weighing raising venture capital over the summer to help accelerate expansion. So far, NuRide says some 27,575 riders have used NuRide, collectively sharing 1.3 million trips, saving almost $10 million on gas and sparing the air 18,725 tons of emissions. Steele says the business will generate revenues of more than $1 million in 2008 and will operate at around break even. How do you make money from a carpooling operation? For NuRide, the same way you attract riders, by signing up corporate partners who will provide incentives for people to commute together. While NuRide lets people carpool as much or as little as they wish, it encourages more frequent sharing through a rewards system in which points are collected for each ride shared, and can be cashed in for things like tickets to local sporting events and discounts at local restaurants. NuRide collects a small fee attached to those awards which is sometimes paid by the commuter and sometimes paid by the corporate sponsor. A larger source of revenue, however, comes from the local governments in the communities it serves. These municipalities pay for NuRide's technology to replace their own, often very outdated carpooling databases, which in some cases are more than 30 years old. "Everyone wants to blame the power plant up the street, but the fact is that motor vehicles account for 30% of the world's CO2 emissions," says Steele, who adds that ride-sharing will remain important even as more hybrid cars are introduced, since those cars are not pollution free. While governments across the country reached that same conclusion decades ago, he says, they did not have the Internet to connect large numbers of people who might never meet offline. Just as the Internet can transform a dating service or a flea market, it can make carpooling much more effective by giving people a broader range of options. Steele says 60% of NuRide's members today had never previously commuted to work, and while some of these people commute every day, others use the service as little as once a week or once a month. To participate, members must be affiliated with a company or a university and have an email address that reflects this. Once in the program, they can arrange rides however they want, with co-workers,or other people they meet online, to go to work or to go somewhere on the weekend. "It took us almost a year to figure out the business model," he says. "It really took a lot of tweaking." Steele says the company plans to expand into two new markets by the end of summer and longer term would like to expand nationwide. -- Andrea Orr See April 27 story on NuRide from The New York Times
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