Tuesday, February 1, 2011

B Cycle in Madison - Let's do it!

So, Madison is finally getting a bike sharing program. That is, as long as the deal with Trek (primary partner in B Cycle) and the City can actually get their deal through the Council tonight. It's a great deal for Madison, and also a great program in general. I'm not thrilled with how fast it is moving through the city process, in part because it makes people suspicious and doesn't leave enough time to properly get questions answered. But it really would be a shame if the program failed or didn't get approved.

Short car trips, like those that can easily replaced by using a bike sharing program, are very dirty, polluting trips. Cars don't really operate efficiently until they warmed up, and this can take around five minutes or five miles of driving. But most trips in the US are less than five miles. As a matter of fact, 40% of trips are two miles or less, a distance easily covered by bike. And our downtown and campus area are already crowded and not efficiently negotiated by car. Yet not everyone has a bike, or has it with them all the time. If it was easier to make some of these short trips without using a car, it would be good for our air and our roads would be less congested. And maybe you'd be able to find a parking spot closer to your destination.

So making bikes available to people that already have them at hand would help solve some of these urban issues.

Of course, I've been reading lots of news and blog posts on this subject, and many people have questions, misconceptions, or outright incorrect information. Below I'm going to try to get some of these answered, corrected, or debunked.

As to how this all came about, whether it should be rushed through, and whether proper city process was followed, I'm not going to comment. I really don't want to support the way this project is moving through the city process. It was poorly handled, and that's all I'm going to say as my feelings on that subject. I'm just hoping to provide some information as a person that thinks bike sharing is good in general, and has done more research on various bike sharing programs than the average person.

You can read two of my past posts on bike sharing in Madison – both what I felt were the barriers and a history of a different kind of bike sharing, at the links above.

First, there are a couple of places to go to get more information about the program in general and the specifics about the Madison proposal. The Pedestrian/Bicycle/Motor Vehicle Commission had a meeting last week where a representative from B Cycle, as well as a couple of city staff people came to present the program. You can watch the whole meeting at the link above. Most of the meeting was devoted to the B Cycle proposal, so you shouldn't have to search much to find that topic. Unfortunately, some incorrect or incomplete information came out via this meeting, and as chair, I was not able to answer the questions. (We also got kicked out of the room because the County had failed to put one of their meetings on the room schedule, and they own the room, so the discussion was cut short.)

You can also read the B Cycle FAQ sheet prepared for the Feb 1 Council meeting. It has answers from Trek/B Cycle. Some of the same questions are answered below, but I wanted to add more information or put the answers in my own words. If you want to see all the documents that the Council will see, you can access that item via Legistar, the city's legislative software. Just click the various links under “attachments.”

Why does the city provide space for a private business to use our public space? Why isn't Trek paying for use of the sidewalks, streets, parks, or other public space?

A bike sharing program is part of the transportation system of the city, just like private cars, delivery trucks, van pools, parking lots, buses, sidewalks, roads, paths, intercity buses, taxis, (in other cities) trains/light rail, and various other elements. Each of elements gets some subsidy from the city. Local roads are paid for almost entirely by local property taxes, and buses receive lots of property tax support as well, so those are obvious. But even the Parking Utility, which received all its revenues from user fees (parking fees), gets to use valuable land in our downtown without paying real value of that land. Can you imagine how much property taxes the city could generate if a 6-8 story condo or office building was built on any of the lots that now house our parking ramps?

Even taxi stands and intercity buses – both private, for-profit businesses – get special spots on the street for them to use. Bus loading zones and taxi stands could instead be revenue-generating parking spots, but we see it as in the interest of the city as a whole to provide spots for these businesses to operate on our public streets. Loading zones for delivery vehicles are the same model. These are private businesses, servicing other private businesses, and yet we reserve precious space on our streets to allow them to operate.

Why is the city giving any money to Trek/B Cycle to put this system in place? Why does it require a subsidy for a for-profit business?

The city provides many services that benefit private businesses. Besides the examples above, look at the subsidy that it provides to the Convention and Visitors' Bureau. We pay for them to market the city, because we figure the money will, come back to us in the form of more jobs, greater room tax, and increased property taxes. (Since the city doesn't collect income tax or sales tax, I've always wondered exactly how the hotel and restaurant jobs generated by business travel actually benefit the city financially, except that the city is generally a better place when more people are working.)

The city also has an economic development staff, again to help businesses in the city.

And let's not forget that providing parking via a city utility, even if it is supported by user fees, is a huge subsidy to the businesses – retail, residential developers, office developers, etc – that are located downtown. As noted above, the city could sell that land, allow the parking ramps to be torn down, and let the private market decide when and where parking would be available to different users. The private market could also set the price based on time of day, demand, or convenience. The city could get a one-time influx of money by selling the land, and then they could collect all those increased property taxes as well. But the decision has been made that providing a publicly run system of parking facilities is in the city's interest.

OK, but then why not allow a private company to run another type of transportation system using the public space? Like, maybe a bike sharing program.

How come there wasn't an RFP? Wouldn't other companies like to bud to offer the same product?

I admit, now we are getting into the process questions, but I can tell you what the official answer is, from the Mayor and City Attorney, based on the information Trek provided. B Cycle is the only company in the US (maybe the world, but I haven't checked) that not only provides the physical infrastructure – bikes, financial kiosks, parking/security for the bikes, etc – but also is offering to run the program, including maintaining the bikes, moving them around if too many get bunched up in one place – called “rebalancing,” taking care of the financial transactions, memberships, marketing, legal liability – in case someone sues because they fall off the bike, etc., data collection, and other parts of the operation of the system. In other cities, either the city, a non-profit, or a for-profit company actually operates the system, once it has been purchased from Trek.

I know something about bike sharing programs, and I believe it when city staff and Trek claim they are the only ones offering this whole package. There aren't many bike sharing providers in North America to begin with. Bixi operates in Montreal. Their home page doesn't seem to have anything about other locations, although according to this article, they also developed the systems in Minneapolis and Toronto. Smart Bikes operates in DC, as a partnership between the DC Department of Transportation and Clear Channel. Then there is B Cycle, which is the system in Denver, Des Moines, Louisville, San Antonio, and Ft. Lauderdale.

There are a few smaller programs being operated either on college campuses or private businesses with large corporate campuses. The bikes used are almost always heavy, specialized, utilitarian bikes, not your standard off the shelf model.

The truth is, except for Bixi and B Cycle, no one else is developing systems in multiple places. For an all-in-one, B Cycle is the only company, and Madison will be the first place they have run the system as well as developed it.

What about advertising?

The resolution states that all the bikes and kiosks must meet the current advertising regulations for the city. Several alder, most strenuously Alder Mike Verveer, have pointed out that Madison has been very strict about advertising in the downtown area. We don't have it in our bus shelters, and he has pledged to oppose it in this instance as well.

This will be interesting, because the model around the world has been that considerable revenue has been generated by the advertising on the bikes and the actual kiosks. Note above how the Washington, DC system is a partnership between the DC DOT and Clear Channel? Clear Channel is essentially underwriting the system in exchange for an exclusive advertising contract for not just the bike sharing system, but also the buses and bus shelters in DC.

Won't people that want to ride a bike just use their own?

Bike sharing programs are not aimed at people that bike to work/school anyway, they are aimed at people that don't have their bikes with them, but want to make a short trip. Examples of the potential market are:
  • State employee that take a van pool to work
  • People that take the bus to work
  • Carpoolers
  • Even drivers that want to make a short trip, but don't want to drive.
  • Regular bicyclists that for whatever reason don't have their bike with them.
  • Downtown dwellers that don't own a bike, but want to borrow one.

Where are these customers going, and why would they use a B Cycle?
  • To meet a friend or spouse at the Kohl Center for a basketball game. S/he may get to work with one mode, take the B Cycle to the Kohl Center, and then get a ride home.
  • Bike from the Capitol area to campus for a meeting. This is just a bit too far to walk, if you are pressed for time, but driving really isn't fast either, because of traffic and parking.
  • Run errands at lunch or after work, or get to lunch by bike.
  • Go to meetings within a couple of miles. Biking is often faster than driving, and definitely faster than the bus or walking.
  • Visitors that come to Madison without a car, or just want to bike somewhere. The Greater Madison Convention and Visitors Bureau estimates that 20% of visitors don't have a car while in Madison.
  • Get somewhere when the buses aren't running frequently. Weekends, holidays, evening it might be 30-60 minutes between buses, but the bike is there for that trip to Willy St.

Other information: It's a great deal!

These systems generally cost well over $1 million to get up and running, and then possibly over a million dollars each year in operations. As with any other business, it takes awhile to not only work out all the bugs, but to also get the program on firm financial ground. Trek is offering this system, fully installed, operational, and maintained, for a pretty small financial commitment. It's a huge gift that is requiring very little on the part of the city. Think of the $810 million train that got thrown away by our governor, and how stupid that looked. It's that sort of deal for the city.

Why would Trek do this? Well, part of it really is a belief in Madison and a desire to make their (sort of) hometown as great as it can be. Trek believes in biking, and they want Madison to be a showcase for how biking can benefit a city.

But there is something in this for Trek as well, besides good PR. Trek holds a bike show/convention in Madison every year – Trek World. All the other bike companies, associated businesses, suppliers, and dealers go to a different show in Las Vegas, but Trek has their own show at Monona Terrace. I'm assuming that Trek would like to show off this system to other cities, advocates, dealers, and others right on their home turf. This system is a rolling, operational advertisement for one of their divisions. Since they have never been the operator, as well as the developer of this program, Madison will be the test case.

That's cool, I have no problem with Trek using Madison to show off their best ideas. It's good for the city, and it's good for Trek. Doesn't everyone want a win-win?


  1. Forgive me if this is answered in one of the linked docs, but is there a source other than Trek for the "well over $1 million" start up cost figure?

  2. You know, I could have added many, many more links, references, and information, but I felt I needed to get the info out there. I just didn't have time to look up every piece of info.

    Any of the cities that already have a program like this going spent anywhere from $1.5 - $3 million to get it off the ground. I believe Denver spent over $2 million left over from the Democratic National Convention to get theirs going. And that was after the system had already been installed for the convention. That's how much they had to pay to keep it.

    Sorry, I just don't have time to look it all up, but I wish I had those facts and links on hand. You'll just have to take it from someone who has been looking at these systems for a long time.

  3. Looks like Boulder is launching a program with 200 bikes and 25 locations (Madison's is 350 bikes at 35 locations.) It is estimated to cost $1.3 million to launch and $520,000 annual operating cost.

  4. Thanks for the quick response.

    I want to make clear that my questions and issues are with the process, not the concept.

    Alder Eagon says Trek will invest over $3.5 M, you say "well over $1M" and the legal documents are silent. In an open process there would be one answer.

    I did some digging. It looks like the cost in Denver for a system about twice as big was $1.7M and that it is funded and run as a non-profit. Was this a possibility for Madison? We'll never know.




    Here is the Boulder RFP (closer in size to Madison): http://www.bouldercolorado.gov/files/Finance/Purchasing/Open%20Bids/2010_16_bike_share.pdf. They went with B-Cycle, but I can't find much on the terms of the contract.

    One last note, it appears the B-Cycle does not intend to operate in the Winter.