Nuanced analysis applied to the current state of bike share
A couple years ago at a conference on bike sharing, out of frustration I said "when you define everything as a success you don't learn anything."
Flickr photo by Liz Patek of people riding the Citibike system in New York City.
Definitely that's the case with bike share in New York City, which is financially on the ropes. New York City was smart to not put any money into the system, but the provider (Alta) didn't have a good enough handle on the specifics of the situation there in order to figure out if they could be successful. See "Citi Bike, Needing Millions of Dollars, Looks for Help" and "Citi Bike Manager Resigns" from the Wall Street Journal.
But NYC isn't the only system on the ropes. Toronto's is too ("Bixi bike-share program to pedal forward under a new name," Toronto Star) and my understanding is that the Chattanooga system isn't particularly successful either.
Initial plans for bike share in Los Angeles have ground to a halt because the proposed provider couldn't sell sponsorships and pre-existing contracts boxed them out of being able to sell advertising ("Los Angeles's Big Proposed Bike Share Program is Now Dead," Curbed LA).
The big problem is that the cost of the system not only to buy but to operate is higher than the revenues generated by memberships, advertising, and sponsorship. DC's system benefits from use by tourists, but tourists don't seem to be using the system in NYC to the same extent. (And note most other cities can't count on achieving similar levels of non-resident use as DC.)
Note that these problems are unrelated to the bankruptcy of the original developer of the system, the Montreal-based Public Bicycle Share Company ("Drowning In Debt, Bike Sharing's Bixi Files For Bankruptcy," National Public Radio).
And the London system did increase the cost of memberships after the first year to generate more revenues, and most Bixi systems in the US have increased the up-charge rates for day users.
Note that in Europe the cost of connecting stations to the standard electrical grid isn't borne by the bike sharing system but it is in the US, which is why systems have moved to a solar powered system that enable avoidance of such fees. But in NYC, low-light areas require that a number of stations be recharged each night, adding cost to the system.
Ad sales: most cities have preexisting contracts in place. The thing is that the original big scale bike share system in Paris is "subsidized" by advertising sales, and Paris required the vendor handling ad sales to provide bike sharing as part of the contract. Plus Paris is a much better market for advertising in the public space than are most other cities in the West. Besides most cities contract in "silos" so if they allow ad sales in the public space, they've already contracted that out, and the contracts don't have a provision for renegotiation and the addition of required services like bike share.
Sponsorship. Sponsorship revenue is another issue. Most cities are not New York and London and can't sell sponsorships for very high amounts. Most cities don't have large corporations that are publicly spirited and willing to provide the tens of millions of dollars that Citibank provided in NYC (with strongarming by Mayor Bloomberg) or Barclays did in London.
And DC and Chicago have proved that if you don't sell sponsorships in advance of the launch of the system, the likelihood of doing so after it's on the ground becomes more remote with each passing day. Plus, the Denver system has found that as the system ages, their ability to sell sponsorships decreases also.
Why operating costs of bike share are high/per the number of people moved. The reason that the costs of operating the system is high is becuase of "rebalancing" or moving bikes from stations where there are too many bikes to locations where there are too few bikes. Lots of people believe incentives are the solution but they aren't. The imbalances result from the nature of the trip.
Bike sharing is intended to complement transit, but in the US, more trips are substituted using bike share instead of transit, leading to the same kinds of ridership imbalances common to transit systems--lots of ridership going into employment centers and empty trains going back out, with the reverse in the evening.
But it's comparatively easy and cheap to turn trains and buses around so you don't have equipment imbalances, but to move bikes around is time and cost intensive. Plus one train can move upwards of 1,500 people--mass transit--while one bike only moves one person.
Should bike share be subsidized? Some people argue that all mobility (road costs are not covered by gas taxes, tolls, and related fees either) not just transit, is subsidized and so bike share should be subsidized too. The problem with this argument is that bike sharing is transit sure, but it's more a form of personal transit than it is mass transit. On that basis, how money is spent-invested in transit needs to be assessed in a rigorous manner.
The biggest hindrance to biking as transportation isn't the cost of a bike. Authors of the article "A Systems Perspective of Cycling and Bike-sharing Systems in Urban Mobility" make the point that what is holding back biking as transportation isn't the cost of the bike, but the availability of quality safe cycling infrastructure and other trip characteristics including distance between residence and work, school, and other destinations.
The article has a great literature review and probably the most succinct discussion of these issues that I've come across. From the article:
On their own, bike-sharing systems are unlikely to have a big impact on cycling levels as the cost of owning and maintaining a bicycle is not the key issue preventing the choice of cycling in urban peak-hour commute. A majority of the commuters also follow the same origin-destination travel routine, thereby minimizing the need to rely on a large geographical coverage of bike-sharing network. Instead, cycling safety, comfort and trip length are the key determinants of cycling modal share, and bike-sharing does not change much of these attributes. (p. 8)Conclusion. Bike sharing systems are sexy but probably not the best place for cities to invest money in increasing the number of people biking for transportation. And aren't such a great place to be operating business-wise either, judging by current events.
... Policies available to promote cycling include provision of safe, preferably separate, cycling infrastructure along the busy commuter corridors, extensive bike parking at important locations such as transit stations, and wide-spread traffic calming on city roads. Active discouragement of car usage through speed, priority and parking controls can also play an important supplemental role. Moreover, land-
use policies promoting compact, mixed-use developments can help shorten the trip lengths and make cycling more attractive. Implementing these policies in a well-
coordinated manner over the long-term can help bring about higher cycling levels, introduce a cycling culture and make cycling a choice mode in addressing the urban mobility problem. While bike-sharing systems may enlarge the reach of public transport and increase the number of cyclists and cycling trips, they are neither sufficient nor necessary in promoting cycling. (p. 11)