NICE RIDE MINNESOTA

FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2018 AND 2017

NICE RIDE MINNESOTA TABLE OF CONTENTS YEARS ENDED DECEMBER 31, 2018 AND 2017

INDEPENDENT AUDITORS’ REPORT 1

FINANCIAL STATEMENTS

BALANCE SHEETS 3

STATEMENTS OF ACTIVITIES 4

STATEMENTS OF FUNCTIONAL EXPENSES 5

STATEMENTS OF CASH FLOWS 7

NOTES TO FINANCIAL STATEMENTS 8

INDEPENDENT AUDITORS’ REPORT

Board of Directors Nice Ride Minnesota Minneapolis, Minnesota

We have audited the accompanying financial statements of Nice Ride Minnesota (a nonprofit organization), which comprise the statements of financial position as of December 31, 2018 and 2017, and the related statements of activities, functional expenses, and cash flows for the years then ended, and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

(1) Board of Directors Nice Ride Minnesota

Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Nice Ride Minnesota as of December 31, 2018 and 2017, and the changes in net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

CliftonLarsonAllen LLP

Minneapolis, Minnesota May 23, 2019

(2) NICE RIDE MINNESOTA BALANCE SHEETS DECEMBER 31, 2018 AND 2017

2018 2017 ASSETS

CURRENT ASSETS Cash $ 123,958 $ 80,104 Accounts Receivable 4,063 3,278 Grant Receivable - 300,000 Inventory 47,199 250,829 Prepaid Expenses and Other Assets 6,093 17,561 Total Current Assets 181,313 651,772

PROPERTY AND EQUIPMENT, NET 2,782,888 3,827,487

Total Assets $ 2,964,201 $ 4,479,259

LIABILITIES AND NET ASSETS

CURRENT LIABILITIES Accounts Payable $ 3,458 $ 36,141 Accrued Expenses 6,719 22,483 Current Maturity of Note Payable 173,742 198,858 Deferred Revenue 58,805 9,116 Total Current Liabilities 242,724 266,598

LONG-TERM LIABILITIES Note Payable - 40,097

Total Liabilities 242,724 306,695

NET ASSETS Without Donor Restrictions: Undesignated 112,331 196,248 Designated for Property and Equipment 2,609,146 3,588,532 Total Net Assets Without Donor Restrictions 2,721,477 3,784,780 With Donor Restrictions - 387,784 Total Net Assets 2,721,477 4,172,564

Total Liabilities and Net Assets $ 2,964,201 $ 4,479,259

See accompanying Notes to Financial Statements. (3) NICE RIDE MINNESOTA STATEMENTS OF ACTIVITIES YEARS ENDED DECEMBER 31, 2018 AND 2017

2018 2017 Without Donor With Donor Without Donor With Donor Restrictions Restrictions Total Restrictions Restrictions Total SUPPORT AND REVENUE Sponsorship Contracts$ - $ - $ - $ 118,000 $ - $ 118,000 Contributions 1,325 125,000 126,325 180,834 320,000 500,834 Grants 96,195 - 96,195 206,554 - 206,554 Subscription Income 907,924 - 907,924 1,054,583 - 1,054,583 In-Kind Revenue 120,329 - 120,329 282,193 - 282,193 Product Sales 80 - 80 816 - 816 Loss on Sale of Property and Equipment (948) - (948) (6,550) - (6,550) Miscellaneous 52,856 - 52,856 5,022 - 5,022 Net Assets Released from Restriction 512,784 (512,784) - 861,226 (861,226) - Total Support and Revenue 1,690,545 (387,784) 1,302,761 2,702,678 (541,226) 2,161,452

EXPENSES Program Services 2,365,586 - 2,365,586 2,741,559 - 2,741,559 Support and Administrative 368,104 - 368,104 398,189 - 398,189 Fundraising 20,158 - 20,158 67,077 - 67,077 Total Expenses 2,753,848 - 2,753,848 3,206,825 - 3,206,825

CHANGE IN NET ASSETS (1,063,303) (387,784) (1,451,087) (504,147) (541,226) (1,045,373)

Net Assets - Beginning of Year 3,784,780 387,784 4,172,564 4,288,927 929,010 5,217,937

NET ASSETS - END OF YEAR $ 2,721,477 $ - $ 2,721,477 $ 3,784,780 $ 387,784 $ 4,172,564

See accompanying Notes to Financial Statements. (4) NICE RIDE MINNESOTA STATEMENT OF FUNCTIONAL EXPENSES YEAR ENDED DECEMBER 31, 2018

Bike Share Outreach Total General and Operations and Other Program Administrative Fundraising Total In-Kind Services$ 42,418 $ - $ 42,418 $ 77,911 $ - $ 120,329 Salaries, Payroll Taxes, and Benefits 350,163 44,033 394,196 123,417 12,740 530,353 Depreciation 714,093 182,968 897,061 - - 897,061 Operational Bike Costs 520,523 5,269 525,792 - 5,934 531,726 Supplies 1,408 388 1,796 1,893 65 3,754 Professional Fees 8,957 779 9,736 57,305 - 67,041 Marketing 23,997 1,350 25,347 65,439 1,305 92,091 Miscellaneous 4,899 226 5,125 14,617 - 19,742 Insurance 10,744 503 11,247 14,121 - 25,368 Vehicle 8,688 306 8,994 - - 8,994 Meals and Entertainment 1,445 179 1,624 3,237 42 4,903 Rent 13,736 488 14,224 6,096 - 20,320 Telephone 4,358 653 5,011 2,101 72 7,184 Interest 7,040 405 7,445 1,967 - 9,412 Transfer of Assets to Motivate 188,942 - 188,942 - - 188,942 Operating Fee 125,000 - 125,000 - - 125,000 Donations 89,201 - 89,201 - - 89,201 Rochester Program 52 6 58 - - 58 Neighborhood Program - 6,636 6,636 - - 6,636 Greater Minnesota 5,160 573 5,733 - - 5,733

Total Expense$ 2,120,824 $ 244,762 $ 2,365,586 $ 368,104 $ 20,158 $ 2,753,848 . Percentage of Total Expenses 77% 9% 87% 12% 1% 100%

See accompanying Notes to Financial Statements. (5) NICE RIDE MINNESOTA STATEMENT OF FUNCTIONAL EXPENSES (CONTINUED) YEAR ENDED DECEMBER 31, 2017

Bike Share Outreach Total General and Operations and Other Program Administrative Fundraising Total In-Kind Services$ 172,138 $ 2,822 $ 174,960 $ 76,192 $ 31,041 $ 282,193 Salaries, Payroll Taxes, and Benefits 794,312 119,670 913,982 219,370 24,986 1,158,338 Depreciation 766,493 217,018 983,511 - - 983,511 Operational Bike Costs 381,953 13,443 395,396 - 9,972 405,368 Supplies 3,116 747 3,863 3,175 107 7,145 Professional Fees 6,500 3,525 10,025 45,987 - 56,012 Marketing 33,983 2,889 36,872 - 758 37,630 Miscellaneous 17,682 541 18,223 7,479 21 25,723 Insurance 18,827 880 19,707 16,916 - 36,623 Vehicle 20,452 720 21,172 - - 21,172 Meals and Entertainment 2,078 126 2,204 3,232 3 5,439 Rent 12,159 432 12,591 5,396 - 17,987 Postage and Printing - - - 754 - 754 Travel 234 79 313 11,703 - 12,016 Telephone 10,036 1,605 11,641 5,534 189 17,364 Interest 8,773 504 9,277 2,451 - 11,728 Rochester Program 4,025 447 4,472 - - 4,472 Neighborhood Program - 115,447 115,447 - - 115,447 Greater Minnesota 7,113 790 7,903 - - 7,903

Total Expense$ 2,259,874 $ 481,685 $ 2,741,559 $ 398,189 $ 67,077 $ 3,206,825 . Percentage of Total Expenses 70% 15% 85% 13% 2% 100.00%

See accompanying Notes to Financial Statements. (6) NICE RIDE MINNESOTA STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2018 AND 2017

2018 2017 CASH FLOWS FROM OPERATING ACTIVITIES Change in Net Assets$ (1,451,087) $ (1,045,373) Adjustments to Reconcile Change in Net Assets to Net Cash Provided by Operating Activities: Depreciation 897,061 983,511 Loss on Disposal of Property and Equipment 948 6,550 Transfer of Property and Equipment 146,590 - (Increase) Decrease in Assets: Accounts Receivable (785) 21,911 Grant Receivable 300,000 250,000 Inventory 203,630 (23,645) Prepaid Expenses and Other Assets 11,468 3,975 Increase (Decrease) in Liabilities: Accounts Payable (32,683) (66,194) Accrued Expenses (15,764) 4,783 Deferred Revenue 49,689 (9,712) Net Cash Provided by Operating Activities 109,067 125,806

CASH FLOWS FROM INVESTING ACTIVITIES Purchases of Property and Equipment - (303,803)

CASH FLOWS FROM FINANCING ACTIVITIES Payments on Note Payable (65,213) (24,015)

NET INCREASE (DECREASE) IN CASH 43,854 (202,012)

Cash - Beginning of Year 80,104 282,116

CASH - END OF YEAR $ 123,958 $ 80,104

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash Paid for Interest $ 9,412 $ 11,728

See accompanying Notes to Financial Statements. (7) NICE RIDE MINNESOTA NOTES TO FINANICIAL STATEMENTS DECEMBER 31, 2018 AND 2017

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organizational Purpose Nice Ride Minnesota (the Organization) was founded in December 2008. Its mission is to enhance quality of life by providing a convenient, easy-to-use bike sharing and fleet programs that will provide residents and visitors a healthy, fun, different way to get around town. In compliance with a funding agreement with the city of Minneapolis, the Organization is obligated to operate the bike sharing program for 10 years in the city of Minneapolis. See Note 9 for further information related to changes in the Organization’s day-to-day operations during the 2018 year.

The Organization believes the benefits of alternative transportation include:

 Avoiding vehicular congestion  Reducing our carbon footprint  Less dependence on fossil fuels  More efficient movement from place to place  More opportunities for healthy physical activity  More interesting personal experiences interacting with the city  A growing affinity to make other changes in all modes of transportation  A sense of civic pride

Financial Statement Presentation Net assets and revenues, gains, and losses are classified based on donor-imposed restrictions. Accordingly, net assets of the Organization and changes therein are classified and reported as follows:

Without Donor Restrictions – Represent that portion of expendable funds that are available for support of the operations of the Organization. With Donor Restrictions – Those resources subject to donor-imposed restrictions, which will be satisfied by actions of the Organization or passage of time. Net assets may be subject to donor-imposed restrictions that they be maintained permanently by the Organization.

Inventory Inventories are valued at lower of cost or net realizable value based on first-in-first-out and consist of parts inventory for bikes, helmets and other merchandise.

(8) NICE RIDE MINNESOTA NOTES TO FINANICIAL STATEMENTS DECEMBER 31, 2018 AND 2017

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Property and Equipment The Organization capitalizes all expenditures for property and equipment in excess of $500. Property and equipment purchases are recorded at cost. Contributed items are recorded at fair market value at the date of donation. Depreciation is computed using the straight-line method over estimated useful lives for the following classes:

Building 39 Years Bicycles and Kiosk Equipment 5 to 10 Years Vehicles and Trailers 5 Years Website and Telecommunication 3 to 5 Years IT Equipment 3 Years Furniture and Equipment 7 Years

Revenue Recognition Contracts Sponsorship contracts are recognized when earned either through the passage of time or by incurring expenses for sponsored kiosks.

Deferred revenue consists of $-0- and $4,875 as of December 31, 2018 and 2017, respectively, and relates to deferred sponsorship payments for future years.

Additional deferred revenue of $58,8050- and $4,241 existed as of December 31, 2018 and 2017, respectively, consisting of unredeemed discount codes purchased by customers.

Subscriptions Subscription income is recorded as earned based on subscription activity through kiosks.

Grants and Contributions Grants and contributions, unconditional promises to give (grants receivable and pledges receivable), and other assets are recognized at fair value and are recorded as made. All contributions are available for unrestricted use unless specifically restricted by the donor. All receivables are reviewed for collectability and are considered collectible gifts and no allowance has been recorded as of December 31, 2018 and 2017.

Contributions that are restricted by the donor are reported as increases in unrestricted net assets if the restrictions expire (that is, when a stipulated time restriction ends or purpose restriction is accomplished) in the reporting period in which the revenue is recognized. All other donor-restricted contributions are reported as increases in net assets with donor restrictions, depending on the nature of the restrictions. When these restrictions expire, net assets with donor restrictions are reclassified to net assets without donor restrictions and reported in the statement of activities as Net Assets Released from Restriction.

(9) NICE RIDE MINNESOTA NOTES TO FINANICIAL STATEMENTS DECEMBER 31, 2018 AND 2017

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Grants and Contributions (Continued) The following concentrations exist for the years ended December 31:

2018 2017 Government Grant Revenue 100% from 1 source 100% from 1 source Sponsorship Contract Revenue 100% from 2 sources 42% from 1 source Contribution Revenue 100% from 1 source 93% from 1 source

Functional Allocation of Expense Salaries and related expenses are allocated based on employees’ and management’s direct time spent on program or support activities or estimates of time spent. Expenses, other than salaries and related expense, which are not directly identifiable by program or support services, are allocated based on management’s estimates.

Advertising and Marketing Advertising and marketing costs are expensed when incurred. Advertising expenses were $26,652 and $37,630 for the years ended December 31, 2018 and 2017, respectively.

Tax-Exempt Status The Organization is exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Service Code and from Minnesota income taxes. In addition, the Organization has been determined by the Internal Revenue Service (IRS) not to be a private foundation within the meaning of Section 509(a) of the Code. Therefore, charitable contributions are tax deductible.

The Organization follows an accounting standard that clarifies the accounting for uncertainty in income taxes recognized in an organization’s financial statements. The policy prescribes a recognition threshold and measurement principles for the financial statement recognition and measurement of tax positions taken or expected to be taken on a tax return that are not certain to be realized. No liability has been recorded related to the adoption of this standard.

Estimates and Assumptions Management uses estimates and assumptions in preparing financial statements in accordance with accounting principles generally accepted in the United States of America. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Although the estimates and assumptions are considered to be fairly stated at the time they are made, actual results could vary from the estimates and assumptions that were used.

(10) NICE RIDE MINNESOTA NOTES TO FINANICIAL STATEMENTS DECEMBER 31, 2018 AND 2017

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Fair Value Measurements The Organization categorizes its assets and liabilities measured at fair value into a three- level hierarchy based on the priority of the inputs to the valuation technique used to determine fair value in accordance with accounting standards. This standard on fair value measurement emphasizes that fair value is a market-based measurement, not an entity- specific measurement. The Organization currently does not measure any of its assets or liabilities at fair value.

Subsequent Events The Organization has evaluated events and transactions for potential recognition or disclosure in these financial statements through May 23, 2019, the date the financial statements were available to be issued.

Change in Accounting Principle The Organization has adopted the accounting guidance in Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2016-14, Not-for-Profit Entities (Topic 958): Presentation of Financial Statements of Not-for-Profit Entities, which changes presentation and disclosure requirements for nonprofit entities to provide more relevant information about their resources (and the changes in those resources) to donors, granters, creditors, and other users. These include qualitative and quantitative requirements in the following areas: net asset classes, investment return, expenses, and liquidity.

NOTE 2 PROPERTY AND EQUIPMENT

Property and equipment consists of the following at December 31:

2018 2017 Bicycles and Kiosk Equipment$ 8,889,386 $ 9,259,632 Building and Building Improvements 289,496 289,496 Vehicles and Trailers - 162,855 Website and Telecommunication - 135,431 IT Equipment - 48,277 Furniture and Equipment - 39,654 Total Property and Equipment 9,178,882 9,935,345 Less: Accumulated Depreciation (6,395,994) (6,107,858) Property and Equipment, Net$ 2,782,888 $ 3,827,487

(11) NICE RIDE MINNESOTA NOTES TO FINANICIAL STATEMENTS DECEMBER 31, 2018 AND 2017

NOTE 3 NOTES PAYABLE

Notes payable consist of the following as of December 31:

Description 2018 2017

Note payable to a bank, annual interest of 4.47%, monthly principal and interest payments of $1,113.98 paid through maturity on August 16, 2019. Secured by the property purchased with the note. $ 173,742 $ 179,058 Note payable to a bank, annual interest at 4.24%, monthly principal and interest payments of $534 paid through maturity on June 3, 2020. Secured by the equipment purchased with the note. - 10,061 Equipment loan payable to a bank, annual interest at 5.99%, monthly principal and interest payments of $614 paid through maturity on May 1, 2020. Secured by the equipment purchased with the note. - 15,623 Equipment loan payable to a bank, annual interest at 5.39%, monthly principal and interest payments of $909 paid through maturity on June 25, 2021. Secured by the equipment purchased with the note. - 34,213 Subtotal 173,742 238,955 Less: Current Maturities (173,742) (198,858) Long-Term Notes Payable$ - $ 40,097

Maturity requirements of notes payable are as follows:

Year Ending December 31, Amount 2019$ 173,742 Total $ 173,742

(12) NICE RIDE MINNESOTA NOTES TO FINANICIAL STATEMENTS DECEMBER 31, 2018 AND 2017

NOTE 4 NET ASSETS

Net assets with donor restrictions as of December 31 consist of the following:

2018 2017 Purpose Restrictions: Transition $ - $ 87,784 Time Restrictions - 300,000 Total$ - $ 387,784

Releases of net assets with donor restrictions were for the following purposes as of December 31:

2018 2017 Releases: Purpose Releases: Minneapolis/St. Paul Expansion $ - $ 11,436 Project Improvement - 262,285 Transition 87,784 6,400 PeopleForBikes Grant - 31,105 Time Releases 425,000 550,000 Total$ 512,784 $ 861,226

NOTE 5 OPERATING LEASE

The Organization leases vehicles and space under various operating leases that expired at various times through December 31, 2018. Total rental expense was $390,150 and $21,688 for the years ended December 31, 2018 and 2017, respectively.

(13) NICE RIDE MINNESOTA NOTES TO FINANICIAL STATEMENTS DECEMBER 31, 2018 AND 2017

NOTE 6 IN-KIND DONATIONS AND SERVICES

The Organization records various types of in-kind support, including certain professional services. The amounts reflected in the accompanying financial statements as in-kind support are offset by like amounts included in expenses.

The Organization received in-kind contributions for the years ended December 31 as follows:

2018 2017 Accounting and Legal$ 78,351 $ 77,150 Marketing and Branding - 92,837 Rent 41,978 83,955 Public Relations - 28,251 Total In-Kind Contributions$ 120,329 $ 282,193

Certain members of the Organization’s board of directors are employees, officers, or owners of companies from which the Organization received the above in-kind services. The value of these donated services from board members was approximately $75,851 and $105,401 for the years ended December 31, 2018 and 2017, respectively.

NOTE 7 BENEFIT PLANS

During 2014, the Organization started a simple individual retirement account (IRA) plan. The plan is available for any employees receiving more than $5,000 in compensation during a year. Participating employees may defer any part of their salary, up to $12,000 per year or $14,500 if the employee is over 50 years old. The Organization will provide matching contributions up to 3% of employees’ salary. Matches made to the plan during the years ended December 31, 2018 and 2017 were $15,126 and $15,285, respectively.

NOTE 8 LIQUIDITY AND AVAILABILITY

Management recommends maintaining a cash flow reserve of approximately $25,000 at any given time to cover the following anticipated monthly expenses: (1) insurance expense, (2) holding costs of the building (these costs are reimbursable by Motivate), and (3) payroll for two periods.

The following assets are considered liquid and available to meet cash needs for general expenditures within one year:

Cash and Cash Equivalents$ 123,958 Accounts Receivable 4,063 Total$ 128,021

(14) NICE RIDE MINNESOTA NOTES TO FINANICIAL STATEMENTS DECEMBER 31, 2018 AND 2017

NOTE 9 TRANSITION

In May 2017, the board of directors of the Organization evaluated changes in the global bike share industry, particularly the shift toward privately-funded business models deploying dockless technology. At that time, the board of directors instructed staff to move proactively to seek a method of transition that would enable the Organization to continue to meet its obligations to public-grantors for operation of the grant-funded bikes and stations while (seamlessly, for customers) delivering a privately-funded dockless expansion meeting public goals for quality, reliability, equity, and order. The Organization published a Request of Proposals for Transition of the Twin Cities Bike Sharing System (RFP) in August of 2017. In December of 2017, following the recommendation of a local stakeholder group and public presentations by finalists, the Organization selected Motivate as its for-profit transition partner. On June 4, 2017, the Organization entered into a Third Amendment to its Grant Funded Agreement with the city of Minneapolis, which bound the Organization to a set of assurances contained in the Organization’s 2018 Update to Nonprofit Business Plan, authorized the Organization to subcontract with Motivate to operate the grant-funded equipment, and made the Organization the sole licensee of the city of Minneapolis for the duration of the Grant Funded Agreement. The Organization obtained written approval of its updated business plan from all of its public grantors in the spring of 2018. In addition to publishing the RFP, business plan, and contracts, the Organization retained a third party to complete a transition analysis and published a report of that analysis. On June 14, 2018, the Organization entered into a Program and Pilot Agreement with Motivate Minnesota LLC (Motivate), which included a service level agreement, an Equity Plan, a Grant Funded Equipment Operating Agreement, and Lease/Option (Transition Agreements). A closing on the Transition Agreements occurred on July 2, 2018. The Organization and Blue Cross and Blue Shield of Minnesota also mutually terminated their title sponsorship agreement, and the Organization returned $125,000 unspent funds restricted under that agreement.

The Transition Agreements have aspects of a transfer of assets and a subcontract. Motivate acquired the Organization’s tools, spare parts, and brand. Motivate leased the shop space from the Organization with an option to purchase for the outstanding principal on the building loan after five years. All of the Organization’s operations employees in Minneapolis were offered employment with Motivate. Motivate committed to operate the older grant funded bikes and stations until they are taken out of service at a future time. The Organization continues to own the grant-funded equipment. Motivate collects the revenue from the grant-funded equipment on behalf of the Organization; the Organization pays Motivate an operating fee for the grant-funded equipment. Motivate will fund and own the dockless bike pilot (at least 3,000 bikes, an e-bike pilot, and a winter bike pilot). The Organization remains obligated to public grantors and public landowners; the Organization has subcontracted with Motivate to fulfill those obligations. Motivate pays the Organization $65,000 each year; these funds correspond to actual expenses of the Organization to staff its contract oversight function and to maintain insurance. There is also a revenue share option based on program revenues collected by Motivate.

(15) NICE RIDE MINNESOTA NOTES TO FINANICIAL STATEMENTS DECEMBER 31, 2018 AND 2017

NOTE 9 TRANSITION (CONTINUED)

In November 2018, Motivate was acquired by Lyft. Motivate is now a subsidiary of Lyft. Most of the Organization’s former employees now work for a separate company, Motivate LLC, which is a bike share operations contractor to Lyft and Motivate.

In January 2019, the City of Minneapolis and the University of Minnesota approved a proposed change to the dockless bike pilot through a master planning process, authorizing Lyft to deploy 1,800 docked electric pedal-assist bikes in 2019 in lieu of expanding with 1,500 additional dockless bikes. The Organization and Motivate entered into a First Amendment to the Program and Pilot Agreement implementing this proposal.

The Organization continues to fulfill its mission and vision, now functioning as a “mobility manager” rather than an operator. Core functions including overseeing the service level agreement and Equity Plan with Motivate to assure compliance and serve as a “bridge” between our public right of way owners and public transit operators and the private entrepreneurs at Lyft. Critical goals will include strengthening our public-private partnership to enhance quality, reliability, equity, and order. Near term focus will include integration with Metro Transit user-interfaces, creating new tools to make equity incentives “automatic,” and innovating in regional expansion with e-bikes to develop commuting use-cases. The Organization continues to employ its executive director to perform these roles. The Organization has contracted with a firm to manage the accounting for the nonprofit going forward.

The Board of Directors of the Organization held a strategic planning workshop in December of 2018. At the workshop, the Board of Directors reached the following decisions:

The mission and vision statement of Nice Ride Minnesota continue to express our goals and guide our work. In 2010, our nonprofit stood as a working example of public/private partnership to operate a bike sharing system to achieve public goals. By sharing our results and learning, we helped cities across North America to develop similar partnerships and nurtured a new industry. Our role in that industry has changed. Today, we do not operate a system. We oversee contracts and facilitate collaboration between right-of-way owners and entrepreneurs to encourage private investment and innovation while assuring that public goals are achieved. We are excited by early results and are hopeful that our results over the next three years will again stand as a working example that is useful to other cities and will strengthen our industry during a period of rapid growth. We will continue to share our results and learnings. We will advocate that the principles underlying our approach be applied to other privately-funded shared mobility services. Those principles include: (1) joint action by right-of-way owners, (2) public benefit in exchange for the right to operate in the public right-of-way, and (3) continuous collaboration through a cycle of development. We will act as a convener, advocate, and standard-setter.

(16) NICE RIDE MINNESOTA NOTES TO FINANICIAL STATEMENTS DECEMBER 31, 2018 AND 2017

NOTE 9 TRANSITION (CONTINUED)

The expertise of our Board of Directors has served the nonprofit well for nine years, while we worked as a system operator. In the coming years, we will have less need for operational expertise on the Board of Directors and greater need for expertise in contract oversight, program measurement, and governance of privately-funded shared services. We envision a board composed of approximately 10 people, including experienced directors and new directors, with backgrounds in public service, private business, and advocacy.

In 2019, the composition of the Board of Directors of the Organization is changing in line with these decisions. The Organization’s website is managesharedmobilitymn.org. Additional information about the transition is available at that website in the History & Resources section.

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