The big bike news today is that NYC announced the contract for operating the planned bike share system. Alta Bicycle Share was selected as the for-profit corporate operator, the same folks that operate the bike share systems in D.C. and Boston. Alta uses exclusively the technology developed by the Public Bike System Company, better known as BIXI, the same vendor we use here in Minneapolis. The planned bike share system will have over 10,000 bikes at 600 stations (Minneapolis has 1,200 bikes at 116 stations, Boston has 600 bikes at 61 stations, D.C. has 1,100 bikes at 110 stations). I’m sure it will take a few years for NYC to fully deploy the system, and in the mean time it will be operating as a much smaller system, but the bottom line is that this system is planned to be extremely large. Perhaps large enough to be profitable.
Profit or Non-Profit?
The planned NYC system is envisioned as a for-profit venture, with profits shared between Alta and New York City. It is my understanding that no public subsidies will be used to support the system. My guess is that Alta won’t have any problems turning a profit in NYC, and this may become the first profitable bike share system in North America (I’m not sure if Alta is accepting subsidies in Boston’s Hubway system or D.C.’s Capital Bikeshare system, but I’m guessing so, though I believe the long-term goal is for it to become profitable). This is quite a bit different business model than the non-profit model used by the non-profit Nice Ride here in MN and Denver’s B-Cycle system, which are both heavily supported by public subsidies (and don’t show any signs of being financially sustainable any time in the near future).
One would hope that since Alta is operating the systems in Boston, NYC, and D.C., and they’re all using the same technology, that the systems would be integrated – that a membership in one of the bike share systems would allow members to use bikes in any of the three systems (or in Minneapolis…). I’m guessing this won’t be the case, however, at least not in the near future (there is little financial motivation for Alta to encourage system integration). But if not, what is the benefit of a Portland-based for-profit company operating bike shares along the east coast unless the long-term vision is a nation-wide network of inter-connected systems (NYC could capture that taxable revenue locally)?
Carbon Offsets as Revenue Source?
According to an article last month in Forbes,
In the United States, the business model will need to work without subsidies. This is the mission of Philadelphia-based CityRyde, which sells bike-sharing software. In addition to tracking data like the number of rides in a given year, or the number of miles biked on a single trip, CityRyde’s software includes analgorithm that just might be the holy grail for bike-sharing: it converts bike rides into carbon offsets. Validated under the Verified Carbon Standard, CityRyde’s carbon methodology calculates the emissions saved by each ride and converts those emissions savings into offsets that bike-sharing programs can then sell on the voluntary carbon market. For companies, purchasing offsets directly from their local bike-sharing program rather than from an organization planting trees in some other part of the world, say, or funding renewable energy projects that may or may not work, has obvious appeal.
[…]According to [CityRide], potential offset revenue pencils out to about a penny per mile, and the average bike-sharing trip is two to three miles. “If you look at the Paris model, that system has 24,000 bikes and nearly 50 million annual rides, so that’s 100 to 150 million bike-ride miles per year,” he says. “At a penny per mile, that’s one to 1.5 million dollars for that program alone.”
Interesting idea. I wonder if Nice Ride could benefit?