Rebuilding Place in the Urban Space

"A community’s physical form, rather than its land uses, is its most intrinsic and enduring characteristic." [Katz, EPA] This blog focuses on place and placemaking and all that makes it work--historic preservation, urban design, transportation, asset-based community development, arts & cultural development, commercial district revitalization, tourism & destination development, and quality of life advocacy--along with doses of civic engagement and good governance watchdogging.

Thursday, March 27, 2014

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.

Bicycle share users on M Street NW in Washington, DC.

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 share users in Silver Spring, Maryland. 

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.

Figure from the cited journal article.

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)

... 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)
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.

Labels: , , , ,

8 Comments:

At 4:31 PM, Anonymous charlie said...


Lots of pushback here. I know this is something close to you and Alta/BIXI's failures are painful.

1. Advantages of bikeshare to bike ownership -- theft (I've had 3 bikes stolen), storage in smaller urban space (huge issue right now), and one way.

2. And yes, being used as a commute substitute doesn't work. We need the message that if you want to bike to work use your own bike, for everything else use bikeshare. Not sure if that is simple enough...


3. BIXI business model also heavily flawed in Montreal itself and now delayed in Portland.

4. Not properly maintaining bike+dock means much higher capital replacement costs than a jurisdiction might assume from yr. 1.

5. I find it difficult to think they can't find a name sponsor -- and I do think the problem is more about conflicting laws/regulations/pre existing K than lack of market demand. Capitol One bikeshare, here we come.

 
At 4:57 PM, Anonymous Alex B. said...

I'll echo Charlie on the value of one-way trips.

Remember that the name Bixi is the amalgamation of 'bicycle' and 'taxi.' That's a useful way to think of the service. Most people don't commute via taxi every day, but it is an incredibly useful way to get around - and the one-way nature of taxi trips is complimentary to a walking/transit-friendly environment.

I also agree that the lack of a presenting sponsor isn't for lack of potential donors, but probably due to the complex governance over the system.

That said, the benefit is that there's no false hope of a white knight dropping in and paying for everything; the costs to buy into the system are well known. The DC region's approach to it, knowing that they will need to invest in stations, makes for a more realistic implementation. The initial investment from DC and Arlington also was large enough to allow relatively small additions (8 stations for Alexandria) to work, whereas an 8-station standalone system would never work.

 
At 5:08 PM, Blogger Richard Layman said...

Good points. (And yes, I have my issues, especially wrt "critical distance.")

And yes, Charlie, in NYC especially, the "killer app" for bike share should be (1) lack of space for bike parking in apartment buildings and (2) theft or (3) not wanting to lug a bike int and out of an apartment building and (4) difficulty of parking at your destination and (5) theft and (6) it is a pain in the ass to carry those big anti-theft locks suitable for NYC.

But are people willing to pay say, $200/year for membership, in return for those benefits.

Even so that's only $20 million for base membership revenue, if the 100,000 number as reported is to be believed. That's probably not enough money to support a 50,000 bike system. But if they could double membership beyond that?

Anyway, achieving 100,000 members as reported (but if it includes monthlies, that's not as useful a figure) is impressive.

 
At 7:12 PM, Anonymous charlie said...

I think you mean 5000 bikes-- a 50,000 bike system would be well an order of magnitude larger.

Well that goes to the issue in Toronto and NYC with Alta promising no public money in the system.

And I have no problem with spending public money on bikeshare but then you need some sort of metric -- the existng ones (ridership, co2, etc) are not very illuminating.

 
At 10:59 PM, Blogger washcycle said...

I think people in NYC will absolutely pay $200 a year for bikeshare. The only problem with bikeshare in NYC is that Alta can't choose the price of a membership. In DC that isn't an issue, because Alta isn't paid that way - they get a flat fee with some amount based on performance.

So in NYC, if Alta can raise prices, that will also lower costs since there will be fewer uses and less rebalancing. The whole idea that Alta is dependent on the fees, but can't set them is insane. It would be like opening a restaurant and having the government write the menu.

 
At 7:06 AM, Blogger Richard Layman said...

Yes, charlie, I made a mistake. I was thinking back to the RFP, and 5,000 and 10,000 are the more reasonable numbers.

2. washcycle -- very good point about not having control over setting prices in NYC. IT'S EXACTLY COMPARABLE to what happened to streetcar companies. Their prices were set by public service commissions and the regulatory process, and the pressure was always there to not allow price increases, even though costs, especially labor, constantly rose. Eventually the disconnect with fares led to the cessation of streetcars and private ownership, the former because the cost of buying new cars became exorbitant comparatively after WWII and the latter because it wasn't possible to run transit service profitably.

 
At 7:54 AM, Anonymous charlie said...

Washcycle just solved the problem of health care costs as well!

And Richard killed the Great streetcar conspiracy!

Washcycle is probably correct on the pricing (for NYC). I think the base fee right now is 120, and clearly it is very popular right now and a value at 200. Might have to go monthly (16 a month). I do think that price would make expansion harder - you would have to hit an area hard with new stations to justify to price.

 
At 8:31 AM, Blogger Richard Layman said...

... in various RFP responses I did suggest monthly subscription pricing.

... and I can't take credit for the streetcar stuff, it's in journal articles and book chapters (somewhere in my stuff for a class I took in 2007).

 

Post a Comment

<< Home