Are City Bicycle-Sharing Programs Doomed?

A year has passed since Zagster launched a bike-sharing program for Rock Ventures’ portfolio of properties and companies in downtown Detroit. Considering all the challenges the Motor City has with crime, not to mention the harsh Michigan winters, success was hardly guaranteed. But the program is still humming along, and now GM is partnering with Zagster for a similar program at General Motor’s 330-acre technical center in nearby Warren.

Such success is behind the growth of Zagster as it focuses on bicycle-sharing projects at universities and corporate campuses. The latest coup for the Massachusetts-based firm is a pilot program at Baltimore/Washington International Airport (BWI). Bicycles docked outside BWI’s international terminal will be available for airport employees looking for some exercise and travellers wanting to use those legs during long layovers. As the Guardian’s Marc Gunther points out, Zagster’s focus on bike sharing for large organizations, and innovative programs such as the one at BWI, accounts for its continued growth. Meanwhile, large-scale bicycle programs such as ones in Chicago, New York City and Washington, D.C. lose money. So are citywide bike programs doomed to failure?

Part of the problem is that the vast majority of public transportation systems operate in the red. In most cities, everything that is part of a transport system requires more money than the revenues they take in. That includes everything from the maintenance of sidewalks — which I argue are part of a public transport system as most of us walk at the least a short distance to the office — to the most hyper-modern light rail system. Bicycles can, and should be, a vital segment of our transport infrastructure — and are a cost-effective way of helping to move people from point A to B. Overall, Washington’s and New York’s systems have been successful when you look at ridership. Other cities, such as Portland, are bullish about the long-term financial benefits a holistic bicycling plan can offer. And the financial benefits of bicycling go beyond looking at a program’s ledger: Evidence suggests businesses can score lower health care costs, increased employee productivity and of course, revenues.

At a fundamental level, the problem with New York’s bike sharing program, Citi Bike, was the overpromise that the program could pay for itself, mostly thanks to one massive sponsor. The popular success of the program, in part, has led to its current troubles — revenues are not enough to maintain the bicycles to the city’s standards, and if Citi Bike’s employees unionize, that spike in costs will devour even more of its finances. The system’s pricing model has also bedeviled Citi Bike (locals who enjoy an annual subscription pay peanuts per ride compared to the visitors who only buy a one-day or weekly pass). Meanwhile, Capital Bikeshare in D.C. has sourced funding from a bevy of grants: It operates at a loss, but at a pace similarly to most public transport systems nationally.

Compared to all conventional transportation systems, whether they are public roads for cars or rail, ferry or bus systems, bicycle-sharing systems are still very new. No one has figured out a pricing model that is cost-effective for all while guaranteeing that they run in the black. Another challenge is that the economics of bicycling is still not understood: As Kristine Johnson explains in the Georgetown Public Policy Review, we need to know more about the economic benefits of bicycling. Fair or not, cycling and its advocates are still on the fringe when it comes to political clout. And at an era when most municipalities are still struggling to balance budgets, making the case for incorporating bicycling into a city’s overall transit system is a tough sell. Case in point: Mayor Bill de Blasio will not commit to any public funding for Citi Bike share, even though his office touts its importance to the city’s public transportation system.

The reality is that we will see more cities develop a hybrid approach towards bicycling. Chicago, New York and Washington are literally paving the way towards developing strong bicycle sharing programs while firms such as Zagster find their niche with privately-run projects for schools and businesses. If Zagster knew they could make a profit now on city-wide programs, they would have jumped in there by now—and from a wise business perspective, they have not. Political leaders will realize the benefits of bicycling and advocate for it, if they have solid data to back it up — and it will be up to citizens to nudge them in that direction, both with passion, and irrefutable data making their case, clearly and strongly.

Image credit: Leon Kaye

Leon Kaye has lived in Abu Dhabi for the past year and is currently spending some time in Uruguay. Follow him on Instagram and Twitter. Other thoughts of his are on his site, greengopost.com.