It’s easy to understand how bike sharing services like Decobike can help reduce congestion, improve air quality and be a fun way to get around town. But data is beginning to reveal that bike sharing provides a significant economic boost to local economies as well.
Lately, the Miami News Times has been on a kick insisting that Miami Beach officials wound up in a rotten deal with Decobike - and taxpayers are getting shafted as a result. The premise of the recent stories is despite an agreement between Decobike and Miami Beach to pay a portion of their profits back to the city government as an ‘operating fee’ of sorts for using public land, Decobike does not share enough of their profits under a revised agreement, especially given the service’s wildly high ridership numbers.
For a few reasons, I did not agree with the premise that Miami Beach taxpayers are getting screwed - even if the revenue sharing figures are less than originally negotiated. Most bike sharing systems around the country operate as a taxpayer-funded service, viewed as a component of a city’s transit network. Decobike however, is privately-operated and funded at no cost to taxpayers aside from the use of public space the kiosks occupy within the city, including 86 formerly metered parking spaces. These spaces are estimated to bring in $258,000 worth of parking revenue each year, while Decobike only shared about $190,000 of their revenue with Miami Beach. That suggests a ‘net loss’ of $67,795 for Miami Beach under the revised agreement, for which taxpayers are on the hook for.
On the surface, it might seem like a bad deal - except for one key point. It completely ignores the observed and proven economic impacts of bike sharing beyond the simple balance sheet.
“The city expected to make money off the service, But that was only half the argument in bringing DecoBike to Miami Beach. The other half — the promise that the city would make money on the deal — has fallen by the wayside.” (DecoBike Currently Costs Miami Beach Money, But City Is on Pace To Break Even)
The New Times argument misses the forest for the trees here. The fact is, Decobike’s sky-high ridership numbers suggest the city is already making plenty of money from the service indirectly – but to understand that requires a deeper level of study than just looking at forgone parking revenues.
Data is beginning to emerge from around the country that bike sharing services have a not-so-insignificant boost on their local economies. While this data isn’t so readily available for Miami Beach, studies from around the world can inform us what popular bike sharing systems do for their cities. A few examples:
- Respondents to a Capital Bikeshare (DC) study found that nearly two-thirds of respondents would not have made their trips without the bikeshare program because it was too far to walk, bringing in customers who would have otherwise stayed away (2011-2012 Capital Bikeshare Member Survey).
- A recent study in Melbourne found that bike parking spaces are better at generating revenue than car parking spaces. In part, this is simply because bicycles take up so little space, and parking can provide more opportunities for paying customers to park right at a business’s front door.
- Minneapolis bike share members spent an extra $150,000 at nearby businesses over the course of one season. A University of Minnesota study found that users of NiceRide in the Twin Cities make more trips to nearby businesses than before bike share was available. Bike share users especially frequent restaurants, coffee shops, bars, nightclubs, and grocery stores.(Catalyst July 2012: Nice Ride spurs spending near stations).
- One million rides in [DC’s] first year have accrued nearly 890,000 miles. At 39 cents per potential vehicle miles prevented, Capital Bikeshare gave DC taxpayers a maximum net savings of almost $350,000 in its first year.
And regarding the metered street parking spaces, many cities around the country are voluntarily removing some metered-on street parking spaces in favor of bicycle parking because of the positive impact it has on local business - which is the original intent of metered parking in the first place. (Think: Parking for 12 customers in the same space as 1) It is entirely possible that Decobike kiosks generate more tax revenue than a metered parking space, and could be measured by a survey of tax receipts from businesses with kiosks nearby to see the change in sales tax revenue from before vs. after Decobike.
Facts like these suggest that fiscal profitability should be welcomed, but as a side-benefit. The number one metric in determining bikeshare success for a city should be ridership, e.g. vehicle miles prevented. And by that measure, Decobike is off the charts.
Now, if you want to make an argument for who is getting screwed, there are other places to look first. You could start with the Decobike riders, who pay the highest user fees of any bicycle sharing service in the USA. An annual membership for the service is would run $180 for a Miami Beach resident (even though memberships are only available in 3-month increments). In comparison, annual memberships in other cities are a comparative bargain:
Miami Beach: $180
San Francisco Bay Area: $88
Washington, DC: $75
Fort Lauderdale: $45
(It’s important to remember Decobike and Citibike in New York City do not receive taxpayer funding which helps keep user fees down in other cities.)
Decobike could also make an argument that they are in fact getting screwed. As the New Times mentions, they only brought in $40,200 from advertising. This is because until recently, the city of Miami Beach tightly restricted how and where advertisements could be displayed, mainly limiting ads to a small basket on the front of the bicycles and forbidding them on the station kiosks themselves. I can imagine this limited their revenue generating potential for a while.
I understand Miami Beach expects to make some money off Decobike given its popularity and how the original deal was negotiated. But suggesting taxpayers are getting ‘stiffed’ while not recognizing the hosts of economic benefits is missing the forest for the trees and fails to recognize the long-term economic advantage of the service to local government, residents, visitors and businesses.
Here’s a quick recap of the salient points from these meetings.
- Miami Beach has a few roadway projects that are of interest to the Bikeways Committee, including Collins Park, 44 St, Bayshore area in Middle Beach, Dade Blvd and 51 St. These are all in various stages of development and for the most part behind behind schedule, if even started, with the exception of Collins Park (near 22 St and Dade Blvd) which has all the permits done. These items take up a sizable chunk of time at every meeting, rarely have any real updates to report, and I’ve yet to truly understand the relevancy of some of them to the overall health of bicycling in Miami Beach.
- On the bike racks front, the city has hired a consultant to take care of all having to do with this, from identifying target locations to getting all the permits needed.
- There is also a kerfuffle over some people (a commissioner included) wanting to reduce the width of Alton Rd down to 8 feet to appease some key residents, but this is beyond the scope of the Bikeways Committee at the moment.
- I also inquired about the connection of the Oceanwalk promenade from 5th Street south to South Pointe Park, and I was told it was on track for construction later this year. This would create a continuous path from the Baywalk all around the SoFi area to South Pointe Park and then north to 23 St (I won’t count the Boardwalk because it discriminates against bicycles, skateboards and rollerskaters - bah).
- No significant update on the roadway projects.
- The Bayshore HOA wants to strip out all bike lanes in the neighborhood, as reduce the width of all roads, in order to “slow down traffic” as well as for “beautification.” This goes directly against the Bike Master Plan and is being opposed by various people in the city gov as well as by the Bikeways Committee. Next month there will be a Neighborhood Association meeting where this will come to a head. More info as I get it.
- The consultants for the bike racks are in the process of being hired but it seems like this may actually be a good thing for the city. These consultants will be able to deal with all the aspects of putting the bike racks out there exclusively and if all goes to plan, in 4-6 months we should see around 100 new bike racks going up around the city, mostly in the South Beach area. Here’s hoping.
- The bike share program for Miami Beach, handled by DecoBike, is on schedule for an August launch (site says July, but its August). Colby Reese (Owner? Pres?) of DecoBike updated the committee on all the city official wrangling that’s had to be done but which is finally on its final stages. The website is now open so drop by. I’ll write more about DecoBike later on.
- It has become painfully clear that the Miami Beach Bicycle Master Plan needs to be revised. It is deficient in many ways, fails to address State-owned roads, and simply does not address the true needs of the city in terms of bicycle infrastructure vis-a-vis our specific geographic situation. It also fails to take advantage of all the recent developments in alternative transportation. When compared to the Miami Bicycle Master Plan, released just last year, the MB plan just doesn’t seem like it is addressing cities separated only by a causeway. This isn’t an easy task, so expect more info about this in months to come.
- Lastly, it is possible we may get some indoor bicycle parking space at the Lincoln Rd Cinema multi-level parking. I brought this up on the April meeting, how there was a space that was totally unused and could serve perfectly as an indoor bike parking area, and Gabrielle Redfern ran with it. She remembered some information that led to the possibility of this happening. Cross your fingers! I’ll also write specifically about this once I get some info I requested.
The next meeting is scheduled for Wednesday, June 23, 2010 at 2:00 PM. Be there!
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