ST. PETERSBURG, Fla. — A free ridesharing startup The Nickel Ride has announced it is shutting down.

Nickel Ride launched in St. Pete in August 2018

Company working on launching a new business called Nickel Wraps

Market flooded with rideshare competition

The Nickel Ride launched in St. Petersburg and other Southwest Florida cities in August 2018.

The company generates revenue through advertisements placed on cars by local businesses, allowing customers to use the service, similar to Uber and Lyft, for free.

In a statement the company said "With our current model we are 100 percent subsidized by our advertisers and rely on their support for sustaining our free rideshare model. Unfortunately we could not obtain the necessary growth we needed to remain operationally efficient."

Alexis Muellner with the Tampa Bay Business Journal says the local market is flooded with competition for rideshare services, as well as soon growing public transportation options.

Some new rideshare models, Muellner says, are bound to fail.

“There’s lots of ways to get around,” Muellner said. “We still have a big void in terms of the transportation question here. But when you see companies here like this not make it, it generally right now seems to be part of their business model to restructure."

That’s exactly what Nickel Ride plans to do.

The company says it is working on launching a new business called Nickel Wraps.

The company would use Uber and Lyft driver cars to advertise on, providing ad space for local businesses while giving Uber and Lyft drivers more financial incentives.