Should bike sharing be self-supporting?

By Robbie Webber

Are bike sharing programs part of the city transportation system, or are they businesses disconnected from city services? That seems to be the question raised most recently in response to the financial problems of New York City’s Citibike, the largest and most prominent bike sharing system in North America.

Citibike is undeniably popular, with 100,000 members and over seven million rides before the system is even one year old. Even the Wall Street Journal, whose editorial board member Dorothy Rabinowitz excoriated the program and Mayor Bloomberg for supporting it, recently called Citibike “seemingly indispensable.” But in the same article, the paper outlines the financial struggles plaguing the system.

The spotlight on Citibike’s problems has once again raised the question of whether it is reasonable to expect a bike sharing system to be self-supporting. Programs around the country operate with a combination of revenue: user fees, sponsorships, advertising, foundation grants, and funding from federal and city sources. This last source seems to raise the hackles of people who believe that bike sharing is a niche program and should either bring in enough money to pay its bills or not operate at all.

But do we expect this of any other transportation mode? It is becoming clear that bike sharing is another component of a multimodal transportation system, and each mode receives public subsidies: sidewalks, bicycle infrastructure, roads, transit, passenger rail, etc.

The Tri-state Transportation Campaign compared bike sharing programs to transit systems in Boston, DC, and Minneapolis, and found that bike sharing has better “fare box recovery” than transit. For bike sharing programs they found that, “while fare box recovery rates for each system tend to be high (according to most recent figures available: Capital Bikeshare generated 97 percent; Hubway, 88 percent; and Nice Ride, 62 percent), funding comes from numerous sources.”

The Washington Post also wrote a useful comparison of the Capital Bikeshare and Citibike, and examined why DC’s program has avoided the financial and operational problems of New York’s system. They also point out that occasional users, such as tourists, are the most profitable users. The many visitors to Washington have been a boon to the bottom line of Capital Bikeshare and have brought it the closest to a self-supporting system in the country.

Citibike is a public-private partnership, but it is expected to cover all expenses with user fees, sponsorships, and advertising. Yet NYCDOT’s webpage for bike sharing calls Citibike, “NYC’s new transit option,” so it is clear that the city considers it part of their transportation system and a supplement to other options. Citibike real-time data also shows that any glitch or delay with MTA corresponds to a complementary increase in use of bike sharing around that station. In DC, the Washington Post points out that local officials and the public don’t expect Capital Bikeshare to be self-supporting. “Local governments explicitly view bike share as a form of public transportation, requiring the kind of public support that buses and trains receive.”

Boston, Chicago, and other cities also consider bike sharing as part of their transportation systems and have committed to making sure the programs continue, even if revenues do not completely cover expenses. The Institute for Transportation Development and Policy’s The Bike-Share Planning Guide makes the case that bike share programs should be thought of as part of a greater public transportation system and should be funded as such:

Government funding for capital costs and operations makes sense in light of the fact that bike-share is part of the larger public transport network, and when all internal and external costs and benefits are considered, it is probable that bike-share will have a lower per person cost than any other public transport option.

While every city would like to minimize taxpayer subsidies, most realize that no transportation mode pays for itself. Bike sharing is important enough to a multimodal transportation system that it deserves the same consideration as transit or local streets.

Robbie Webber is a Senior Associate at SSTI.