It’s important to understand the business model behind the companies we support. FRED wishes to set an example by offering total transparency…
When you reserve a ride on the FRED platform
This is how your money is distributed:
95% – Goes straight to your driver
The remaining 5% ?
Covers bank transaction fees, 3% referral commission for our Sponsors and VAT on that commission.
In the event of Sponsorship referral
When a client is referred by one of our driver Sponsors, the driver receives 3% commission on all rides reserved by that client. The commission is paid into the driver’s bank account.
When a client is referred by another Fred user, that user becomes a Sponsor and receives 3% of all rides reserved by that client in the form of credits. These credits will remain available and deductible from the Sponsor’s rides for one month.
Unused credits at month-end
So what do we do with the unused credits at the end of the month?
These credits will be donated to local non-profit associations.
Check out our Solidarity page to find out more.
So the logic behind this idea…
By month’s end, if our Sponsors have unused credits, this means that the credits accumulated by their referral members have exceeded their own transportation needs. The Sponsor travelled for the free all month.
March 1st: The Sponsor receives the credits accumulated by his/her referrals members during the month of February: let’s say 200€ of credits
March 31 – His/her monthly reservations come to a total of 170€. (so he/she has traveled for free all month)
April 1st – The remaining 30€ of unused credits are transferred to the solidarity fund and the Sponsor receives the credits accumulated by his/her referral members during the month of March, which will remain available until month’s end, and so on.
The value of referral portfolios
This is equal to 6 months worth of credits.
Total credits for referrals over 6 months = 1080€
Therefore, the value of the portfolio = 1080€
Modalities of portfolio sale
All Sponsors (both drivers and users) will be able to sell their portfolio to Fred as long as they comply with the following conditions:
- Member’s accounts will only become “sellable” 365 days after the account was first created.
- Only business accounts will be able to receive the funds (the French status of “auto-enterprise” is accepted)
- A referral agent contract between the Sponsor and Fred will be signed before the funds can be released
- Funds will be paid out 6 months after the sale request
- During the 6 month sale procedure, no credits will be received for the referral members being sold. (The Sponsor will continue to receive the credits accumulated by other referral members in his/her portfolio)
- The Sponsor accepts to be interviewed by Fred (either written or filmed) to share his/her intended use for the funds : pay bills, a family holiday, financing an advertising campaign for your company…We want to know how the money will help you.
(Fred aims to provide far more that a transport service, we believe that we can positively impact the lives of the people who support us and inspire other companies to give back, which is why your feedback will be very important).
So how does FRED make money?
Our drivers pay a monthly fee of 100€ NET to use our platform. This arrangement was made after consultation with the drivers. The fixed rate caps our commission and allows them to reap the reward of their hard work without having to pay excessive commission on each ride.
What do you think of our business model? Do you have any other ideas or suggestions?