Bike share failures

Bike Share struggles in San Diego

From The Orange County Register:

Pedaling bike-share subsidies

by Adam P. Summers

San Diego’s bike-sharing program seems to be going up a steep hill in high gear---and it has quite a bit of company. Over the past several years, more and more cities have been launching bike-sharing programs in an attempt to boost their “green” credentials, encourage people to engage in greater physical activity or diminish traffic congestion and pollution. Besides, all the cool kids over in Europe are doing it. But, oftentimes the results have fallen well short of advocates’ lofty hopes and expectations.

San Diego signed an agreement with DecoBike in July 2013 to run a bike-sharing program in which customers can rent a bicycle from a kiosk and return it to any other kiosk in the city. Price plans range from daily passes starting at $5 for 30 minutes to $125 for an annual membership...

After a one-year delay, service began at 85 stations in January 2015, but 80 percent of those stations had to be moved due to lack of use, complaints from nearby residents and business owners or because the solar-powered kiosks received too much shade, a recent San Diego County grand jury report noted.

During its first year, DecoBike sold 102,641 rides and 697 annual memberships in the city of nearly 1.4 million people, according to KPBS. That translates to an average of about 1,058 rides for each of the 97 stations set up so far---less than three rides per station per day.

Bike-sharing hasn’t exactly taken hold in Orange County, either, having failed in Anaheim and Fullerton in recent years. Like San Diego, Anaheim did not involve any government subsidies, but the same can not be said for Fullerton. The city spent $700,000 in state and federal grants to operate a two-year pilot program, also operated by Bike Nation, but pulled the plug after a year due to low and declining usage and paltry revenue. Orange County Transportation Authority staff had estimated annual revenue of $300,000, but the program generated just $5,370---less than 2 percent of the expected amount---and no advertising or corporate sponsorship revenue. The program sold 945 bike rentals during the year---about $740 in taxpayer subsidies per ride.

Such results are hardly unique. More than half of all municipal bike-sharing programs have failed, a 2014 Wall Street Journal analysis concluded. “Most bike-share programs are managed by city agencies or nonprofit groups, and even those with plenty of riders have struggled to be financially sound,” a Pew Charitable Trusts story reported in March. Rider revenue covers only 85 percent of the cost of Chicago’s Divvy bike-sharing program, Pew noted---and that is among the best recovery rates in the nation. In addition, federal and local taxpayers were forced to pony up $30.5 million in startup costs, including $6.25 million from the city. But at least it is not Boulder, Colo., where revenue covers just 35 percent of bike-sharing costs.

Seattle doubled down on its failing bike-sharing program. Not only did it pay $1.4 million to take over the flagging program previously operated by the nonprofit Puget Sound Bike Share, it also announced plans to expand the system. “We’re confident that we can operate the system without exposing the city to financial loss on the operating side,” Seattle Department of Transportation Director Scott Kubly boldly told the Seattle Bike Blog. This, despite the fact that during the first year of the program each station averaged only about seven rides and $30 a day in revenue...

Bike-sharing programs just sound like a hip idea to central planners, which is always a dangerous prospect. With 80 bike-sharing programs currently operating in 80 cities, and another 100 cities considering their own programs, they have now joined municipal Wi-Fi and streetcars as the trendiest and most unnecessary boondoggles to plague local governments---oftentimes, with the aid of federal subsidies from gas tax revenue that is supposed to be dedicated to funding the interstate highway system.