Fast Company

What NYC's Proposed Public Bike Program Needs To Thrive

NYC bikesIf all goes according to plan, New Yorkers will soon be able to abandon their subway cards and cab fare in favor of a cheaper, healthier, and more eco-friendly option: public bicycles.

The Big Apple's first widespread public bike-sharing program will encourage commuters to rent bikes for 30-minute intervals in a zone south of midtown Manhattan and some surrounding neighborhoods. Largely geared at those running errands or with short commutes, the bike share proposes allowing renters to pick up bicycles from one location, and drop them off at another, with stations located every few blocks. After paying an initial subscription fee, trips are free for the first 30 minutes; longer rides cost increasingly more.

Due to launch this summer and be fully operational by spring 2012, the bike share will set itself apart from similar programs in London, Montreal, and Washington, D.C. by relying solely on private funding rather than federal grants or even public-private partnerships.

Alta Bike Share, which runs D.C.'s public bike share, and B-Cycle, which runs Denver's, are the two finalists competing for New York City's bike share. Both vendors are in the process of submitting proposals to the city's transportation department.

Yet as New York embarks on its ambitious plan, there are concerns that private funding alone won't be enough to help it rise above the problems faced by publicly funded bike shares in other cities. Here's what New York needs to do to keep its bike program up and rolling.

Prevent Theft And Vandalism

One common hurdle for bike programs is theft and vandalism. Bike-sharing schemes in Portland; Cambridge, UK; Bratislava, Slovakia; Helsinki; and Tucson, Ariz., have all been terminated due to unsustainable costs brought about by theft and vandalism.

Paris's Vélib, although now touted as perhaps the most successful example of a public bike share, got off to a particularly bumpy start. The program, which launched in 2007 and covers the entire city, saw 14 percent of its bikes stolen in the first year. By 2009 JC Decaux, the advertising agency operating the bike share, said 80% of the 20,600 bikes in service had been stolen or damaged and had to be replaced. Reports of thefts have lessened since then.

To deter property crimes, recent bike-sharing programs enforce higher penalty fees. They also employ more sophisticated technology--like radio frequency identification tags to track bikes--and have created better locking devices, measures that appear to have brought theft under control.

Find A Workable Financial Model

By far the biggest hurdle for any bike program is figuring out how to pay for it. Typically, success relies on being scaled up, and the programs can cost millions of dollars a year. Different countries fund bike shares in a variety of ways, and as universally popular as these programs are becoming, there is no consensus on how best to bankroll them.

One model that is successful in Europe, but has failed in the U.S., allows advertising agencies to run public bike shares, managing the program costs in exchange for free advertising space from the city.

This was tried in Washington D.C., where in 2008 Clear Channel launched what was supposed to have been a 20-year contract for a bike-share program. Eighteen months after the program’s inception, SmartBike shut shop. "The model was only profit-driven and the provider, Clear Channel, was offering to expand the service at exorbitant rates," says Paul DeMaio, founder of MetroBike, a D.C.-based consultancy that was involved in developing the capital’s current bike-sharing program, Capital Bikeshare, which runs almost entirely on public funding from the transportation department.

Meanwhile, Boulder, in Colorado, received a federal grant of $250,000 for its bike-share program. Denver got $210,000, Minneapolis $1.7 million, and Florida’s Broward County $311,000. Montreal’s bike share program, Bixi, received $13 million ($15 million Canadian) from the city’s parking authority.

"The usual model is that the government gives some sort of grant," says Timothy Ericson, CEO of bike-share consulting company, CityRyde.

In contrast, New York City is shooting for a straight capitalist approach, perhaps no surprise given that Mayor Bloomberg is at the helm.

The transportation department’s 2010 request for proposals seeks a private company to shoulder all "the cost and responsibilities for the system during an initial five-year period while sharing revenues with the city, and with no taxpayer funds being used for the system’s implementation, upkeep or maintenance."

One example of a program that’s adopted a similar model is the recently launched DecoBike in Miami Beach. DecoBike is privately funded and has garnered significant attention for relying solely on sponsorship, subscriptions, and usage fees. That being said, New York might be best served looking to Miami for an example of what not to do.

For one thing, DecoBike charges $14 for daily membership, several times that of typical fees in other cities: DC’s Capital BikeShare charges $5, Velib in Paris less than $1.50.

DecoBike’s founder, Colby Reese, defends the high prices, pointing out that people in South Beach have high disposable income. "It’s about the market value, about what having transportation 24 hours a day is worth to you," he says.

While Reese says DecoBike is "capitalizing on trendiness," and is "more than just a function of transportation," New York City’s plans are less touristy and trendy, and more utilitarian. New York’s transportation department says it’s looking at biking as a "serious transportation option" to be made available "at publicly accessible prices."

However, given that the city doesn’t plan to open its coffers to help achieve this goal, and the program won’t be managed by an advertising agency--which would bring it revenue from street-furniture advertising--just how does it plan on being successful?

"A large sponsor is the most likely way to get a large chunk of the financing," says Ericson. "I know vendors are working towards securing those sponsors."

While attracting sponsorship for public bike shares can be difficult given the checkered history such programs have, MetroBike's DeMaio says he is confident New York can do it.

"It’s a wonderful evolution in business plan model for the bike sharing," he says. "I’m sure it’ll do very well in New York and I know a lot of jurisdictions are looking to New York for how to do this."

Although sponsors will not be able to advertise on bus shelters and other street furniture due to an existing contract the city has with street furniture advertising agency, CEMUSA, they will be able to advertise on bike kiosks, and the bikes themselves. This is similar to bike shares in London, Miami, and Broward County.

Appease Opponents

As the recent brouhaha over a bike lane in Prospect Park West shows, not everyone believes that having more bikes around is for the best. A lawsuit filed in March by community organizations in the area claims that the bike lane is endangering pedestrians by blocking their view, and slowing traffic.

While rolling out more bike lanes is already a priority for transportation commissioner Janette Sadik-Khan, a public bike-share program would require that the endeavor be stepped up all the more--a move that is bound to ruffle some feathers.

Yet another hurdle comes in the form of finding suitable locations to act as bike docking stations, in a city where parking space already comes at a high premium.

"The jurisdiction is going to have to be very creative. Lots of people who have cars in New York will be upset because parking spaces will need to be repurposed," says DeMaio, who is currently working on finding locations to further expand Capital Bikeshare in Arlington.

"But then again, for every one motor vehicle space, you get eight to ten bike parking spaces. If the city is trying to get most space out of every square foot, bike sharing certainly moves in that direction," he adds.

However New York chooses to deal with these issues, the city will undoubtedly be watched closely by other hopefuls, as bike sharing increasingly attracts attention as a viable public transportation option for cities.

"The New York deployment will force the industry to think outside the box to find new models for bike sharing," says Ericson. "If New York can do this you will see every city that comes after New York trying the same model."

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