Verra Mobility: Government Solutions Economics & NYDOT Contract

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That's helpful. If we walk through the typical economics, let's say you need to bid for a mid-sized city contract. At a high level, what is typically the monthly fee per camera, and what cost items do you need to consider?

I'll discuss the fee structure, which was one of their questions. Typically, the city dictates the fee structure. One option is a fixed fee contract, which is a flat rate every month per camera, making it straightforward. Other cities use a variable fee tied to the number of citations, where we charge either a certain dollar amount per citation or a percentage of the citation amount. Some cities have a mix of both, with a partial fixed fee and a variable fee on top. When bidding for these contracts, several factors must be considered. First, what does the city want? Red light cameras, speed cameras, and school bus cameras all differ in pricing structure, camera placement, and photo enforcement type. The location is also crucial. Some intersections are very busy with many violations, while others might be on side roads with fewer violations. If bidding on a contract with a percentage of the citation, you need to calculate the expected revenue based on the anticipated number of citations at that intersection to determine pricing.

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With California, you already have a significant market there. How much does a camera cost, and what is the average cost for full implementation?

As technology evolves, the cost of cameras decrease. Typically, the hardware for a rear camera to capture a license plate costs between $20,000 and $30,000. At night, there's a flashing strobe light and other instrumentation. Construction for a typical project might also be around $30,000. If it's for driver liability, you would double that to include another camera. So, the camera plus installation could easily be $60,000. If spread over a three-year contract without certainty of renewal, we need to determine the monthly fee to recoup the capital investment.

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So, you're spending around $80,000 to $100,000 just to install the camera. What percentage of contracts does Verra Mobility offer that includes end-to-end violation processing?

The majority of cities prefer to outsource the entire process to Verra Mobility. Over 75% of deals in the US involve complete cradle-to-grave processing.

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