Thursday, March 10, 2011

New York City Chooses Bike-Share Finalists

Washington, DC, National Bike Summit

Two bike-share companies have been short-listed as finalists to provide bike-share systems to the city of New York: B-Cycle and Public Bike System (Bixi).

Neither company would provide official confirmation of the choice, and the city's Department of Transportation also would not confirm the selections.

However, the choices for the two finalists, who will now be asked to set up demonstrations of their bike-share system prior to final selection by the DOT, did become known to BBB through private discussions at the National Bike Summit being held in Washington, DC this week. There was no word on a third finalist that would compete as was mentioned as a possibility in the DOT's request for proposal, and it appears no third company will be chosen.

B-Cycle is sponsored by Trek Bicycles Corp., a private company based in Madison, WI, while Public Bike System is a non-profit bike-share company based in Quebec, Canada.

Trek's president John Burke, spoke at the closing plenary of the summit, and clearly has a strong track record when developing partnerships. B-Cycle currently has smaller systems set up in Denver, CO, Chicago, IL, Des Moines, IA and San Antonio, TX, and will be rolling out programs soon in Louisville, KY, Broward County, FL and Hawaii.

The New York bike-share however recommends that the finalist set up 10,000 bikes and 600 stations in Manhattan by the end of 2012, and expand further into outer boroughs in following years, making it the largest bike-share system in North America. Paris's Velib system run by JC Decaux is the best known bike-share system, and is currently the largest system in Europe, hosting 24,000 bikes.
Sadik-Khan at the Bike Summit

Trek has long been known to make ambitious and successful marketing alliances, such as their support of Lance Armstrong and his Livestrong team, and now their backing of two major bike racers, Andy and Frank Schleck.

The Schleck brothers will be joined in the Luxembourg based team by time trial great Fabian Cancellara. As a trio, the riders will provide a serious challenge to Alberto Contador, who won last year's Tour de France.

But perhaps because Trek recognizes the growing opportunity that bicycle share systems pose as they grow in cities around the world, as well as the threat to traditional bike sales, the company is now moving quickly to respond to city requests for proposals.

New York's bike-share RFP however was a challenging one. It was the first of its kind to expect much more of suppliers, and give back so much less.

The DOT requests a revenue share model with the City, and also asks that the supplier provide maintenance and provide compensation for the use of public space, such as parking spaces. At the same time, the department asked that no supplier use more than minimal advertising, a barrier to entry so great that two major companies, Cemusa of Spain and JC Decaux of France did not submit bids.

Officials in those two companies who spoke off the record because they were not authorized to speak on the topic said that the New York City bid set an "impossible" financial bar to achieve.

That statement is even all the more interesting given Public Bike System's financial model, which up to now has been non-profit. New York's tough requirements will force the company to start making money on advertising, even if ultimately they continue to be structured as a non-profit.

Public Bike System, who rolled out their first bike-share program in Montreal, also has bike-share programs in London with 6,000 bikes, Melbourne, Australia (650 bikes), Minneapolis, MN, (600 bikes), and Washington, DC (1,100 bikes).  The company also has smaller systems on the Washington State University campus, and at the corporate campus of RIM.

Team from Recycle a Bicycle at National Bike Summit
New Public Bike System programs will also be opening in Boston, MA, and Chatanooga, TN, said a representative for Alta, a consulting and operations partner of Public Bike System.

But neither of these two companies have ever supplied or run a bike-share as large as the one proposed for New York, and their inexperience may well have had to do with their willingness to submit proposals matching the city's requirements.

In the case of Public Bike System, all of their systems are either paid for directly by the cities they work with, or have been underwritten by loans guaranteed by public entities in those cities.

In London and Montreal, both systems are paid for by the cities themselves, and $5M in capital funding for the Washington, DC program was provided through the Federal Highway Administration. Operating costs for the DC program of approximately $2.3M per year are born by the city itself, and are only partially offset by membership and usage fees.

Which begs the question: should public bicycle transportation be privately run? Currently the city of New York does not expect its subways, buses or trains to be funded by private companies or even to run on a profit. To expect a fledgling bicycle share system to do what no other major transportation system in the city is doing provides an ambitious and unprecedented challenge for both of the two finalists.

The news comes at the heels of a lawsuit by a group of seniors in Brooklyn, NY over the Prospect Park bike lane which was recently installed by the department of transportation.

Although the local Community Board 6 had asked DOT to come in with a plan to reduce motorist speeding, and cut down on bicyclists riding on sidewalks and in the wrong direction, and then subsequently approved the plan, residents opposed to the new bike lane have hired Jim Walden of Gibson Dunn to challenge it.
Bixi Bikes at the National Bike Summit

Walden says the city presented misleading facts regarding the results of safety measurements taken after the lane was implemented. 'It was abundantly clear that crashes and injuries were not down," he said.  He also said the city failed to conduct an environmental review of the area, and although it agreed to release data is did not do so until after it had presented its final numbers to the Community Board.

So far the city has not commented on the lawsuit, but said their plan reduced traffic speed, reduced crashes and injuries of cyclists and pedestrians, and responded to the community's concerns.
Speaking at the opening plenary of the Bike Summit, DOT commissioner Janette Sadik Khan said "It's wonderful to be here this morning and with so many friends," perhaps an indirect reference to the fact that many New Yorkers have turned their backs on her.

Sadik-Khan responded indirectly to the criticism of late when she spoke about the new bike lanes in Prospect Park and elsewhere: "They have created really dramatic changes, controversial things like reduce speeding and taking cyclists off the sidewalks."

Acknowledging the role that Mayor Michael Bloomberg has played in opening up New York to its bicycle potential she also noted, "It's hard and its painstaking work, and there are unexpected setbacks and unexpected events--but that's to be expected."

Needless to say, among friends, Sadik Khan's words were met with thundering applause.

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