MASSLIVE.COM – Cities and towns are rethinking how people get around their downtowns, and it doesn’t include buying more buses.
Increasingly, communities are turning to bike sharing programs, where users rent bicycles and pay via an app on their phone or a kiosk. It’s a trend that advocates say helps solve traffic woes, gets more people exploring their community and improves health.
The reasons communities adopt bike share programs and the type of program they pick varies, but one thing is clear: people are using the bikes.
In Worcester, for example, more than 5,000 rides were logged in the first month following ofo’s launch. Zagster has provided more than 1,000 rides in Marlborough and Salem combined since it launched in both cities over the summer.
And in 2016, 1.27 million trips were taken in Boston through the city’s bike-share program, Hubway.
So, why are bike sharing programs proliferating?
For one thing, the private bike-sharing industry is exploding.
The China-based company ofo was last valued at close to $2 billion, and it has rapidly expanded to 180 different cities since it launched in 2014. The industry is expected to be worth $3.5 billion by 2019, according to Forbes.
The company chose Worcester and Seattle as the first two U.S. cities to launch in. It’s recently added Revere and Malden.
The demand for bike sharing is also increasing across the country. According to the National Association of City Transportation Officials, bike share ridership in the United States has increased from 320,000 trips in 2010 to 28 million in 2016.
The landscape of the bike sharing industry is a mix of both private and publicly funded businesses.
Zagster in Marlborough
According to Meredith Harris, head of Marlborough’s Economic Development Corp., there was a demand by business owners to increase transportation options for employees trying to get from the train to work.
Marlborough turned to Cambridge-based Zagster to create a two-year pilot bike share program with 30 bikes at docking stations in the city.
“There’s no subway system in Marlborough, and the commuter rails only go so far, so getting around suburban areas became increasingly important,” Harris said. “The bikes provide an alternative option.”
This is commonly referred to in cities and towns as the “first mile/last mile” problem, referencing the distance workers need to cover to and from the train station.
Additionally, the Zagster bikes allowed employees to get from work back to the downtown for lunch breaks.
“If your employees are at the office, the bikes easily transport them from our business parks to our downtown,” Harris said.
The Zagster bikes in Marlborough have have also benefited from proximity to the Assabet River Rail Trail, which runs from Marlborough to neighboring Hudson and, when complete, will run to South Acton and link users to the South Acton Commuter Rail station.
“It’s amazing how many residents you see during the weekends riding on the rail trail and around town. It’s working as a great amenity for the employers and for the public,” Harris said.
In addition to Marlborough, Zagster has bike shares in Reading, Chelmsford, Burlington, Lexington and Cambridge.
ofo in Worcester
Worcester’s local bike sharing program, ofo, will also provide the city with much-needed data about how people travel throughout the city.
Many sharable bikes come with GPS devices and/or docks that allow system managers to track where people are taking them.
Knowing where people are going when they get off at Union Station, or what neighborhoods are seeing the most business is extremely valuable for cities and towns. Since ofo bikes are dockless, the company can know exactly where and when someone finishes their ride.
“Ofo is offering to give us their rider data. It’s raw data that will tell us more about our city, so we’ll be able to say that most people pick up bikes at Union Station and go to Hanover Insurance,” Karen Pelletier, Director of Higher Education and Workforce Partnerships for the Worcester Regional Chamber of Commerce, said.
Bike-sharing programs, however, don’t come cheap. In a feasibility study put together by Clark University student Corinne Jachelski, she estimated that a 13-station program with 101 bikes would cost Worcester between $841,000 and $940,000 per year.
Pelletier said the city was excited to partner with ofo because the company is dockless, meaning the bikes lock themselves and can be picked up and dropped off anywhere. Essentially, ofo doesn’t cost Worcester a dime. The company did, however, meet with Worcester police to discuss partnering to prevent theft and vandalism.
Still, ofo has its fair share of problems, specifically with vandalism and theft.
Earlier this month, the company reported that five of the 200 bikes initially brought to the city had been damaged beyond repair. The company would not comment on how many bikes were damaged since, however a spokesperson said that 100 of the 400 total bikes brought to Worcester had recently been replaced.
If a bike gets lost or damaged, its up to ofo to retrieve or repair it.
Dock vs. dock-less
Bike share programs come in multiple flavors, although the most common programs involve docking or dockless systems. Worcester’s program, ofo, is dockless, meaning there is no designated pick-up or drop-off location for the bikes. Each bike is equipped with a GPS monitor and electronic lock, which allow users with the ofo app to locate and unlock them using their phones.
Dockless systems are low-cost for the companies and communities managing them. The city of Worcester is not expected to spend any money on the ofo program, for example. The downside is that the bikes are more vulnerable to being stolen or damaged.
In the first month of its launch, the company reported that five of the 200 bikes initially brought to the city had been damaged beyond repair. The company would not provide any updated figures on damaged or stolen bikes, although photos of them are routinely posted by residents on social media.
Programs that use bike docks, such as Citibike, Hubway and Zagster, can get pricey. According to the Federal Highway Administration, the average cost estimate to purchase and install 13 stations with 101 bikes would cost between $595,000 and $650,000 in the first year. The maintenance cost for that system ranges from $246,000 and $290,000 per year. This data was cited in a study by Clark University student, Corinne Jachelski. Her report helped inform the Worcester Regional Chamber of Commerce’s bike share program exploration efforts, which led the city toward ofo, which runs the program itself without any direct cost to taxpayers.
Hubway in Boston
Boston’s docking-based bike-share program, Hubway, takes public support for bike share to the next level.
For one, the program is fully funded through user revenue, grants, sponsorship and advertising, meaning no capital or operating funds have been used to pay for Hubway. According to Tracey Ganiatsos, the Public Information Manager for the Boston Transportation Department, those external funds have allowed Boston to spend more than $11 million on the program.
Hubway costs about $3 million to operate annually, and a contract with the program’s operator, Motivate, allows it to collect revenue up to $3 million, meaning the program runs in the black.
There are 128 active Hubway stations and more than 1,800 bikes available in the Boston area. More than 6.2 million Hubway rides in all municipalities have been logged since 2011.
“Hubway increases connectivity within the existing public transportation network, serving as a key first-mile/last-mile connection to rapid transit and commuter rail stations and bus stops,” Tracey Ganiatsos, the Public Information Manager for the Boston Transportation Department, said. “Additionally, Hubway makes it easier for residents and workers to live a healthy and active lifestyle, helps reduce greenhouse gas emissions from less sustainable modes of transportation, and provides a low-cost recreational activity to residents and visitors alike.”
ValleyBike in Western Mass.
ValleyBike is a new program that recently launched in the Pioneer Valley paid for with a $1.3 million federal Congestion Mitigation and Air Quality funding. The state Department of Transportation approved the allocation of funds earlier this month. Ongoing costs for the program will come from revenue and sponsorship, similar to Hubway. ValleyBike has several unique functions that separate it from the pack.
For example, ValleyBike uses a hybrid system for locking and docking the bikes. According to BeWegen, the company managing the operations for ValleyBike, users pick up and drop off bikes at local docks, but they can also temporarily lock the bike in the middle of their ride if they want to stop and run an errand. Additionally, if a bike dock is all filled up, users can lock the bike in the general vicinity of the dock and it will still count.
Additionally, ValleyBikes also feature electric motors, powered by lithium-ion batteries. The motor can be revved to allow bikers to get up hills and ride greater distances.
ValleyBike will feature stations in Springfield, Amherst, Holyoke and South Hadley.
Zagster in Salem
Like Marlborough, Salem is currently working with Zagster on a trial basis, but both towns are open to conversations to expand the programs.
In Salem, local institutions have started investing in the bike-sharing program. Blue Cross/Blue Shield and Salem State have helped fund three bike stations, bringing the total fleet to 45 bikes at 11 stations.
According to Matt Smith, director of traffic and parking for Salem, Zagster ridership in Salem has increased every single month since it launched in May.
“We started pretty slow with just 100 rides in May, then 250 June. But this month we’re going to hit 700 to 800 rides,” Smith said. “We’re finding people touring around on them and running errands.”
Smith said the city decided on Zagster, which uses docks, because they were worried about a dockless system causing bikes to be left everywhere and potentially damaging the historic feel of the town.
Is there any money in bike sharing?
So, do any of these programs make any money?
According to Jeffrey Townson, a professor a Beijing University who spoke with Fortune.com on the subject earlier this spring, the bike share boom doesn’t seem to make much economic sense.
Big dockless companies like ofo are pulling in thin margins per bike, Townson said. An ofo bike in Worcester costs $1 an hour to rent. To make a profit, the companies have to put a lot of bikes on the market. The competition essentially boils down to which company can put the most bikes on the street. However, every time ofo or another company puts a 1,000 new bikes on the streets, they have to continue paying to maintain each of them. According to Townson, while some ofo bike models cost just $36 to produce, it could takes several months for them to recoup the cost.
Tim Ericson, founder of Zagster, told The Huffington Post that no bike-share company is profitable based on rider revenue, and almost all of them have to rely on grants or government support. In 2013, Zagster received a $1.3 billion investment from Dan Gilbert, founder of Quicken Loans. This helped the company rapidly expand, even though at that time the bikes were reported to cost $1,000 to deploy. Because Zagster uses simpler kiosks and docking systems, the company is able to launch in more cities at a lower cost. Erison told The Huffington Post that the company will continue focusing on providing bike share for smaller communities, individual companies and college campuses.
Bike sharing programs in Chicago, Washington D.C. and Portland all receive some taxpayer money, although a bulk of their funding comes from federal or state grants, according to U.S. News.
“Obviously, there are a lot of challenges with bike share, but the biggest one is the financial investment. More programs run in the red and need to be subsidized by the city. That’s where we were stuck,” Pelletier said.
More than just bikes
Pelletier also agreed that, ultimately, the bike program has to fit with the city and its needs. While the bikes can be extremely helpful for people trying to get around, they can also redefine the feel of an entire community.
Bike sharing is more than just improving how people get around. The programs are now being recognized as a bellwether for downtown revitalization and an identifier for communities on the rise.
“It’s something that shows your city is more vibrant. The more pedestrians and bikers you have downtown, the more people are visiting businesses. It makes the city look more livable and visitor friendly,” Pelletier said.
This article by Alban Murtishi originally appeared here.