Bikeshare systems either have to make it on their own or be subsidized like the rest of the transportation system.
This difference of opinion within the bikeshare industry was recently brought to light by an article at NextCity.org entitled San Antonio Bikeshare Threatens to Close Without Major Sponsor. But it isn’t such a black or white issue.
Bikeshare exits in cities across North America along a continuum from totally private funding (Citi Bike in New York City) to mostly public funding (Capital Bikeshare in the Washington D.C. region).
But if bikeshare is going to take its rightful place as a bonafide transportation option in more and more of our cities, advocates have got to stop selling the notion that you can build and operate a robust bikeshare system at no cost. It just isn’t so, and selling it as such sets everyone up for failure. Witness what’s going on in San Antonio.
The author (right) with Arlington officials Dennis Leach and Chris Eatough at a Capital Bikeshare ribbon-cutting ceremony
Like with buses, trains, parking, street lights, and streets themselves, there’s capital infrastructure in the form of stations and bikes to consider. While relatively inexpensive compared to investment in other modes, there is a substantial cost. Other than New York City, there are few, if any, cities that have put bikeshare systems on their streets without the help of federal, state, or local public dollars paying for most of the cost. And the jury is still out on whether or not the Citi Bike can expand to all five boroughs without financial assistance from the city.
With operating costs, most bikeshare systems are doing a little better. Daily and annual users can end up paying a substantial share of costs. Sponsorships and advertising can help further close the gap.
For example, in Arlington, Virginia’s share of the Capital Bikeshare system, the cost recovery ratio – taking into account user and sponsor income – was 63 percent last year. The local Arlington DOT paid for the difference. Compare the recovery ratio to that of our own local Arlington Transit bus system of 30 percent and bikeshare stacks up well versus bus. Like with buses, capital costs were already considered “sunk”– meaning already incurred and unable to recover – and mostly paid for with dedicated federal, state, or local transportation dollars.
Bottom line: vendors and advocates shouldn’t sell bikeshare as free or it won’t work.
Research is increasingly showing that bikeshare can be an important part of a city’s transportation mix. And so cities must ante up for getting the bikes and stations into a locality’s capital-improvement budget and find sources of public revenue to cover the operating difference between user fees, sponsors, and ads.
Cities and bikeshare systems must indeed maximize their revenues. Any public utility should. But these systems will only succeed when freed of the unrealistic expectations.
Photos by DDOT DC and M.V. Jantzen