0

Briefing on GoPass Go-To-Market StrategyAdministration CommitteeMay 26, 2020

Greg ElsborgVice President & Chief Innovation Officer

1

Introduction• Since 2013, DART has offered the GoPass app as a mobility solution for Service Area

riders.

• Regional and national interest has emerged to license GoPass to multiple agencies.

• On July 9, 2019, DART awarded a contract to KPMG to complete a feasibility study evaluating scalability of GoPass to a national platform. This contract value was $673,801 and all deliverables have been completed on this project. This study comprised of 3 phases:– Product & Market Feasibility– Organizational & Financial Feasibility– Technical Review & Analysis

• DART has internalized and developed a Go-To-Market strategic approach to GoPass scalability to a national platform.

2

Alignment with mobility and innovation goals

1. Be a leader in Mobility as a Service (MaaS)innovations to support the transit system andenhance the customer experience.

2. Advance pilot programs to test new ideas and technology to generate data and supportdecision-making.

3. Integrate public and private mobility optionsat DART facilities to reduce reliance on the automobile and enhance connectivity.

4. Continue to enhance GoPass and other tools with innovative features to enhance customer information.

5. Explore fleet options and facility enhancements that support local and regional air quality and climate action goals.

Presented to Board by Kay Shelton – May 12 2020

3

GoPass role as a tool for DART riders

Travel Planning and BookingTicketing and Funds ManagementSourcing of Contextually Relevant Information

The core functions of GoPass application are:

The new mobility ecosystem is being defined by technologies and operators. GoPass is a gateway technology to connecting riders with mobility choices.

Additional future core functions of GoPass include:

Mobility as a Service ConnectionsEncouraging / Rewarding Mobility Behaviors

4

GoPass has unique strengths that support expected agency requirement shiftsdue to COVID-19 and digital mobility needs.

Trip Planning and Booking• Fixed route augmentation with microtransit / desire for microtransit integration• New requirements expected through TNC & micro-mobility consolidation

Ticketing and Funds Management• Cashless and contactless ticketing• Reluctance towards spend on validation hardware installation/upgrade costs

Rider Sourcing of Contextually Relevant Information• Communication to riders en-masse regarding service impacts and safety messaging

GoPass is uniquely positioned for emergent agency COVID-19 needs

5

Regional - GoPass has always supported multiple agencies at a ‘regional’ capacity. DART has secured funding from Trinity Metro to develop features that support specific services.

GoPass scalability methods

DFW Region Tulsa Region New Regions

New Apps

Multi-Regional - GoPass App developer, Unwire, has funded expansion to operate at a ‘multi-regional’ capacity. Multiple regions may be presented with localization of features and experience within GoPass.

White-Label - Unwire has also funded creation of a ‘white-label’ variant of GoPass that may be re-branded, configured, and launched in App stores as a unique app, but a shared code-base with GoPass.

Opportunity has emerged to scale GoPass to beyond our region to new markets. The product is built to support this, and a significant market exists for GoPass.

6

GoPass Go-To-Market (GTM) Strategy

7

1. Assess the market opportunity

2. Revenue streams & funding

3. Product development requirements

4. Financial model & scalability

GoPass Go-To-Market (GTM) Strategy in 4 steps

8

GTM Strategy : Step 1GoPass Market (US)

FTA NTD Reporting Data - 2018

A sizable market for GoPass exists in North America. US market data is presented below.GoPass target agencies are “XS“ , “S“, “M“, “L”

COVID-19 Impact on Mobile Ticketing RevenuesCOVID-19 is impacting Fare Revenues. A US wide impact projection has been applied to modelling:

Year FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027Projected COVID-19 Impact -50% -50% -40% -30% -20% -10% 0%

Agency Size

Agency Count

Agency AnnualFares Range

Average Annual Fare Revenue Per Agency

DART Annual Revenue Range per Agency from GoPass

XXL 1 $1bn+ $4.4bn N/A

XL 6 $500m - $999bn $730m N/A

L 14 $100m - $499m $232m $474k - $872k

M 38 $25m - $99m $48m $140k - $320k

S 58 $10m - $24m $15m $50k - $139kXS 259 $1m - $10m $3m $30k - $75k

XXS 1870 Under $1m $0.1m N/A

9

GTM Strategy : Step 1Interest in GoPass from AgenciesDART continues to see strong interest in GoPass from agencies and is performing favorably in a highly competitive market.

• Multiple agencies are seeking to enter into licensing agreements with DART for GoPass

• DART recently placed 2nd of 9 vendors competing forOrange County Transit Authority Mobile App Contract

• Current list of active opportunities in DART GoPass pipeline: Large ($100 - $499m) : 3 Medium ($25 - $99m) : 7 Small ($10 – $24m) : 2 Extra-Small ($1 – $10m) : 9

10

GTM Strategy : Step 2GoPass revenue streams to DART

DART charges an onboarding fee to bring new agencies to GoPassOnboarding Fee

DART charges a program management fee and ticketing revenue share.Licensing Fees for Agency operation

DART charges a premium on Unwire’s fees for new feature developmentFeature Development

DART charges for activation of premium feature or operational fee for usage of premium feature. (EX: Microtransit)Feature Activation

Development and licensing of wider MaaS ecosystem capabilities, plus GoPass key features and tools may bring incremental revenue to DART.Platform Extension

Man

dato

ryO

ptio

nal

GoPass has multiple current revenue stream opportunities, and with additional appearing as product development continues.

11

GTM Strategy : Step 2GoPass scalability funding sources

Platform Roadmap Development Funding

Licensee AgenciesDART

Federal Grants

Hosting, Licensing & Operational Funding

Licensee AgenciesDART

External Sources

To remain on-pace with market demand, investment must be made to enhance GoPass and introduce a wider mobility ecosystem.

Licensing GoPass to agencies accelerates and enhances the GoPass product roadmap and facilitates wider Mobility Ecosystem development.

Funding Sources

DART Product Management and Business Development Costs

Software Licensing Software Development

Mobility Ecosystem Development / Licensing

12

GTM Strategy : Step 3Evolved DART MaaS Ecosystem

Adapting the emerging mobility requirements of our ridership requires we evolve at the pace of the market and continue to enhance our digital technology offering.

GoPassBack

Office

Rider Engagement and Account Management Tools

MaaSProviders

APIGateway

GoPass Platform

Business Intelligence& Analytics

13

GoPass Development AreasTravel Planning and Booking

Ticketing and Funds ManagementContextually Relevant Rider Information

Mobility BehaviorMobility as a Service Connections

GTM Strategy : Step 3GoPass / MaaS Development Cost

• KPMG Analysis guidance - MaaS Ecosystem Capex Development Spend• GoPass Developer Analysis guidance - GoPass Capex Development Spend

MaaS Ecosystem Development AreasAPI Gateway and OrchestrationMass Data ManagementCustomer Relationship ManagementLoyaltyData Analytics

$5.3m CAPEX / 7 Years $4.6m CAPEX / 7 Years

GoPassBack

Office

14

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

$5,000

FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027

Thou

sand

s

GTM Strategy : Step 4GoPass / MaaS Ecosystem Costs

3Additional Staff(Cumulative)

57

810 11

13

GoPass Licensing & Revenue Share – This cost is incurred regardless of GTM strategyGoPass Development Capex – Incurrence of this cost is accelerated by GTM strategyMaaS Ecosystem Development Capex – Incurrence of this cost is accelerated by GTM strategyOperating Expenses – Incurrence of this cost scales with GTM strategy

15

GTM Strategy : Step 4Agency Onboarding Rate

Agency profiles as modelled using FTA data and taking COVID-19 impact into account.

Rate of Agency Onboarding:X-Small +4 Per Year Small +3 Per Year Medium +2 Per Year Large +0.5 Per Year

Rate of Agency Attrition: A 20% annual attrition to Agencies on platform is calculated beginning in FY’24.

Agency Revenue Model: Agencies have been modelled to bring in Revenue for 50% of their first year on GoPass

Agency ProfileAnnual Fare

Revenue FY21 FY22 FY23 FY24 FY25 FY26 FY27

X-Small $1m - $10m 4 8 12 16 20 24 28Small $10m - $25m 3 6 9 12 15 18 21

Medium $25m - $99m 2 4 6 8 10 12 14Large $100m - $499m 0 0 1 1 2 2 3

Total agencies on GoPass 9 18 28 37 47 56 66

Attrition Rate 0% 0% 0% -20% -20% -20% -20%

16

GTM Strategy : Step 4Financial Model and ScalabilityDART Staff (Innovation + Finance) 7-year scalability model for GoPass & MaaS Ecosystem

($5)

($4)

($3)

($2)

($1)

$0

$1

$2

$3

$4

$5

$6

$7

FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027

Mill

ions

GOPASS GROSS INCOME GOPASS NET INCOME GOPASS RUNNING BALANCE

FY21 FY22 FY23 FY24 FY25 FY26 FY27

Gross Income $0.7m $2.5m $2.7m $4.4m $4.7m $5.6m $6.8m

Expenses $4.3m $3.3m $3.0m $2.6m $3.0m $3.0m $3.5m

Net Income ($3.6.m) ($0.7m) ($0.2m) $1.8m $1.7m $2.6m $3.2m

Running Balance ($3.6m) ($4.3m) ($4.6m) ($2.8m) ($1.1m) $1.5m $4.8m

17

Enhanced digital experience for DART Service Area riders

Leading Mobile App maintained with competitor beating features

Broader MaaS technology ecosystem developed focused on rider experience

Robust and technical staff supporting GoPass and MaaS ecosystem

Multiple robust revenue streams that support continued growth

Strong peer network of agencies using and advocating GoPass

Increased influence across national transit market

Net positive contribution to DART finances of $4.8m

What do we get from 7 years?

18

Summary / RecommendationA market leading mobile app solution is a key contributor to DART’s Mobility as a Service ambitions and has a major positive impact on our riders’ experience.

Working with KPMG, we have built models that support the premise of launching a national expansion strategy for GoPass and a broader MaaS Ecosystem.

A successful national expansion rollout brings net positive revenue to DART and brings benefits to DART ridership from diversified funding sources for development and new feature integration.

Modeling seven years of operation and scalability, GoPass initiative becomes profitable in FY24, achieves break-even in FY26, and has a positive net balance of $4.8m in FY27.

DART riders will gain greater benefit from DART pursuing a national expansion approach than they would from DART not pursuing this approach.

Staff recommends pursuing and investing in an expansion strategy for GoPass. A future ask will be made to Board to consider extending and expanding GoPass contract, with future additional requests for Contracts related to MaaS Ecosystem technology as those come to fruition.

19

Questions?