Transportation

City-Backed Trolley Trounces Ride-Share Competition

A ride-sharing service in Newport Beach, Calif., is closing down because of a recently approved trolley pilot.

by Louis Casiano, The Orange County Register / October 27, 2017
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(TNS) -- NEWPORT BEACH The Newport Downtowner, a free ride-sharing service that shuttles passengers around the Balboa Peninsula and Lido Isle, is shutting down because of competition from the new, city-backed trolley service that serves much of the same area.

The company’s last day of ridership will be Oct. 31, said Downtowner co-owner Jake Allsop, one day shy of its two-year anniversary in the city.

As of Thursday, Oct. 26, the small company has served 86,870 passengers, he said.

Ridership and advertising on the six electric-powered, golf cart-style vehicles immediately suffered once the Balboa Peninsula Trolley began operations in June for 12 summer weekends — the Downtowner’s busiest season, Allsop said.

The City Council approved the trolley system pilot program earlier this year in response to traffic and parking issues on the peninsula.

The trolley, which transported passengers on a fixed route for free from Hoag Hospital Newport Beach to the Balboa Pier, exceeded the expectations of city officials with more than 23,000 boardings.

Allsop said the trolley hurt the Downtowner’s efforts to retain advertising sponsors, which is how the company generates revenue.

“We approached the city multiple times with growing ridership figures and a cost-effective mobility plan,” he said in a statement to the Register. “Unfortunately, Newport Beach was more interested in a static trolley route, which we believe lacks the versatility to satisfy the dynamic needs of people on the peninsula and comes with a higher price tag.”

Councilwoman Diane Dixon, whose district encompasses the peninsula and who pushed for the trolley service, said advertising a rapidly-changing industry and companies such as Uber and Lyft could have had an impact.

“While I do not know exactly how the Downtowner’s balance sheet worked out, I am sure that advertising platforms change dramatically given social media,” Dixon said in a statement. “I know that all of us at the city would be sad to see them go, and I stand ready to hear their story to see how the community might be able to help them stay operating.”

Similar to other ride-sharing services, passengers on the Downtowner reserve rides to specific locations on the peninsula through an app and are grouped with others headed in the same direction.

The company will continue to do business in other markets, which include Tampa, Fla., Aspen, Co., Deray Beach., Fla. and Manhattan Beach, which began in February, Allsop said. Downtowner operations in Aspen are city-funded.

Allsop had been trying to bring the Downtowner service to Balboa Island and Corona del Mar, but red tape made the expansion nearly impossible, he said.

The bulk of the summer trolley program’s $116,910 price tag for the first year came from an Orange County Transportation Authority grant. The city contributed just over $14,000, which came from Balboa Village parking fees.

Mayor Kevin Muldoon, who voted against the trolley service earlier this year, said at the time that the ride-share service was meeting the transportation demand on the peninsula.

“I still feel that the public sector shouldn’t be doing what the private sector can do,” he said Thursday.

©2017 The Orange County Register (Santa Ana, Calif.) Distributed by Tribune Content Agency, LLC.