Pricing bike-sharing to make it self-sufficient in a car culture

©Miami Beach Launched Bike-Sharing Program
13 years ago ago by City of Miami Beach Communications.

DecoBike is a new bikesharing kid on the block and the first unabashedly for-profit venture. In North America, where public transit is usually starved for funds while large subsidies are provided to ensure people continue to use their private automobiles, for-profit bikesharing may be a model that we'll see in cities where it's difficult to get public support for bikesharing. DecoBike is making a break from the current financing schemes for bikesharing programs, which have largely relied on street furniture contracts (in exchange for ad revenue) as with Vélib in Paris, or through sponsorships to make up the difference in the revenue from memberships and fees - as with BIXI (with the sponsorship comprising that portion that would normally be funded through subsidies in public transit).

Miami Beach, a city of 80,000, will soon be able to use the 1000 bikes and 100 stations that this for-profit company providing out of its own capital. The city will then have the highest ratio of public bikes to citizens of any system in the US. Even though it is self-financed, DecoBike is still getting sponsorship from KLM, which if we compare it to the sponsorship for the 1000 BIXI Toronto system may amount to about $500,000 a year. The question is whether DecoBike needs the sponsorship or if it's just icing on the cake.

DecoBike looks and operates much like BIXI and B-cycle, because it is actually using B-cycle's system of bikes and solar-powered stations where people use credit cards or memberships to take out bikes. The big difference is the price. DecoBike has structured its pricing around two roles: residents and visitors. Residents will gravitate to the $15 per month fee and visitors to the $14 per day (or $30 for 3 day) fee. Let's compare this to BIXI, which in Toronto is charging $95 per year. The comparable charge in Miami Beach would be $180 worth of monthly passes. And BIXI's daily fee is only $5 compared to $14.

Some people have grumbled about the high cost of BIXI Toronto and I predict some in Miami Beach will also grumble. That will in no way detract from it's success. Since large-scale bikesharing is such a new phenomenon almost no one has an idea of what is the "normal" price they'd be willing to pay for the service, so many just compare it to the price of a department store bicycle. They conflate the bikesharing service with a disposable product. A department store bike, being so disposable, force many people to abandon them within a year or two since they are so expensive to repair. In comparison, bikesharing can seem cheap given the convenience of not needing a lock, having someone else do all the repairs and getting a much higher quality ride.

Still DecoBike has done a neat trick by not including a yearly membership. This way the company avoids people having to think about the "big" number and comparing the service to department store bikes. $15 per month feels quite manageable in comparison to $180. DecoBike likely has an additional advantage over other bikesharing services in that Miami Beach is a tourist area, so they're likely to tap a lot of tourists who are willing to pay $14 for a day rental or $5 for an hour rental.

From Bike-sharing blog:

For residents, the longest term for a membership is monthly at $15. There is no yearly membership. For both residents and tourists, there is daily access pass for $14, 3-day access pass for $30 and a special 5-day access pass for $49. All of these plans allow unlimited trips during the term with each trip 30 minutes or less at no charge. Each additional 30 minutes is billed at $4. The stations not only allow sign-ups for access passes, but also allows the borrowing of a DecoBike on an hourly basis. The hourly rate is 30 minutes for $4, 60 minutes for $5 and 120 minutes for $10, in each case, it is a single use. Most of these options are available at the easy-to-use stations.

I'd still be much happier if governments would just subsidize bike transportation as much as they do cars. I'm not sure why we set a double standard where bikes have to be self-sufficient but cars can rely on billions of dollars in oil, highway and insurance subsidies. I also believe that affordable public transit is necessary and a right. There is no way that DecoBikes or even BIXI is going to fill the niche of a truly public system accessible to all. The credit card is a game stopper for many. But in the meanwhile, I'm intrigued that DecoBikes is making a go of it. Maybe soon we'll see governments providing subsidies and passes so the most marginalized can also enjoy the convenience of bikesharing.