Cities Should Take the Lead on Dockless Bike Sharing

Back in September, I attended a Nice Ride forum on “the future of bike share” in the Twin Cities. The event was of interest for a few reasons. First, I believe in bike share. We all benefit when more people to choose more often to ride a bike instead of drive a single occupant vehicle. Second, I had heard a lot of rumblings about dockless bike share coming to the Twin Cities and I was eager to hear Nice Ride’s approach for dealing with this disruptive technology.

And boy, am I glad I went. As I listened to executive director Bill Dossett lay out Nice Ride’s vision for the future of the Twin Cities bike share system and the process they planned to determine that future, something didn’t smell right. As the evening progressed I found myself coming back to the same question over and over again. Why was Nice Ride leading the process to determine the future of bike share in the Twin Cities? Shouldn’t the cities be the ones deciding what system will work best for their citizens?

The Process

Back in August, Nice Ride solicited proposals to help them transition their current docked bike share system to a dockless bike share system. They accepted these proposals through early October, and Nice Ride’s “evaluation committee” selected two finalists – LimeBike and Motivate – who presented their competing plans to the public last night. Going forward, the evaluation committee will recommend one of these finalists to the Nice Ride board who will decide whether or not to accept the finalist’s proposal. But here’s the important part – Nice Ride and their chosen partner intend to be the exclusive bike share provider for Minneapolis and Saint Paul for a “limited” period of time while they make their transition from docked to dockless bike share. Their request for proposals hinged on this exclusivity – indeed their entire plan hinges on it.

Exclusivity and why it’s a problem

If given exclusivity, Nice Ride’s process for determining the future of bike share will become the cities’ process for determining the future of bike share. This is problematic for two reasons. First, Nice Ride’s decision making process does not provide for the accountability that a publicly led process would, and second, Nice Ride’s process will lead to an outcome that is in the best interests of Nice Ride, not one that is in the best interests of the citizens of Minneapolis and Saint Paul.

Why this should be a publicly led process

The beauty of a representative democracy is that we can hold our leaders accountable for decisions they make. As a citizen I can contact my representatives and expect that they or someone who works for them will listen to my grievances. By ceding the process to a private entity (even a non-profit with the best of intentions), Minneapolis and Saint Paul will have denied me, and all other citizens, this recourse. I have no means to hold the leadership of Nice Ride accountable for the decisions they make. And, as a private entity, none of Nice Ride’s meetings, discussions, presentations, and all of the other work that has gone into their decision making process, is in the public record. Nice Ride asserts that LimeBike and Motivate submitted the two best proposals, but how do we know that? Had the process been led by the cities, as I believe it should have been, it would be a matter of public record and city leadership could be held to account.

Nice Ride included representatives from Minneapolis and Saint Paul on their evaluation committee so they could claim that the cities were involved in the process, but Nice Ride has this flipped. The cities should be forming committees and asking Nice Ride to participate, not the other way around.

Who really benefits from this process?

Let’s be real, the process that is underway will result in what’s best for Nice Ride. But let’s not presume that what is best for Nice Ride is what is best for Minneapolis and Saint Paul… which is what the cities will be saying if they grant Nice Ride exclusivity.

I can understand why Nice Ride would want an exclusive arrangement. At Nice Ride’s forum back in September, Bill Dossett said it costs Nice Ride around $5,000 per bike to operate their current docked system. The dockless bike share companies have costs that are around $300 per bike. Given these differences in cost structure, Nice Ride is going to have a really hard time competing. Exclusivity will allow Nice Ride to keep lower cost competitors out of the market for however many years it takes Nice Ride to lower their per bike cost to a point that allows them to compete. In the meantime, consumers will suffer the same consequences we always do when companies don’t have to compete for our business – higher prices for reduced service. Don’t you think cab companies would have loved to determine how and when Uber and Lyft could enter the market?

Let’s look at Saint Paul, for example. I would argue that Nice Ride’s astronomical cost structure is why Nice Ride has been failing the city of Saint Paul. At $5,000 per bike, it takes A LOT of rides to recoup that cost. My best guess is that it takes somewhere around 1,000 rides per station per year, since that is Nice Ride’s stated preferred minimum number of trips for a station (http://www.twincities.com/2016/04/11/nice-ride-minnesota-takes-off-waiting-for-st-paul-to-catch-up/). Saint Paul doesn’t have the ridership to offset those costs. According to that same article, more than half of Saint Paul’s stations don’t meet that threshold. And, it’s a vicious cycle. Saint Paul doesn’t have as many stations, because it doesn’t have the ridership to support them, but it doesn’t have the ridership because there aren’t as many stations.

A company with a cost structure of $300 per bike will be able to put a lot more bikes on the ground, especially in places overlooked and underserved by Nice Ride, like North Minneapolis or the east side of Saint Paul. At last night’s event LimeBike said they could put 2,000 – 3,000 bikes in the cities before the end of 2017. That’s more bikes than the entire Nice Ride system AND IN THE WINTER! Imagine what the Twin Cities bike share system could look like with several dockless providers competing for the business of all Minneapolitans and Saint Paulites, including those Nice Ride couldn’t afford to even try to serve.

I believe in the benefits of bike share and have high hopes for its future success in the Twin Cities. Dockless systems have made bike share so much more accessible – both through lower prices and wider distribution. While I wish nothing but the best for Nice Ride, the process they are using – especially their demand for exclusive operating rights – isn’t in the best interests of the people of Minneapolis and Saint Paul. There are companies ready to put bikes on the ground (for $1 per 30min) and compete for our business right now. Should we really make everyone in the Twin Cities wait until Nice Ride is ready to compete with them?

I can understand how the cities might be overwhelmed by the prospect of dockless bike share and all that entails. My guess is that there isn’t an industry leading expert on bike share employed by the city of Saint Paul or the city of Minneapolis. That’s ok, I don’t expect there to be. But I do expect cities to be willing to lead the process to determine the future of bike share in Minneapolis and Saint Paul – to seek out the advice of industry leaders (on all sides of the issue), to look at the experiences of other cities, and ultimately to present their citizens with a plan that is in the best interests of everyone in the Twin Cities.

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14 Responses to Cities Should Take the Lead on Dockless Bike Sharing

  1. Asher November 9, 2017 at 10:47 am #

    “A company with a cost structure of $300 per bike will be able to put a lot more bikes on the ground”

    FWIW, that’s an initial procurement cost, and the $5000 cost per bike for Niceride is more than just a procurement cost (operating costs, plus possibly dock costs).

    • Bill Lindeke
      Bill Lindeke November 9, 2017 at 11:36 am #

      The dock costs are significant, methinks.

      • Walker Angell
        Walker Angell November 9, 2017 at 5:37 pm #

        And maintenance, re-balancing, spring deployment, fall shut-down, administration, etc.

  2. Melissa Wenzel
    Melissa Wenzel November 9, 2017 at 4:12 pm #

    Thank you for writing this article. I shared this on Twitter and tagged Nice Ride. They re-tweeted it, for what it’s worth. Posting here partly so that I can get updates on this topic.

  3. Walker Angell
    Walker Angell November 9, 2017 at 5:52 pm #

    A couple of thoughts.

    St Paul has low ridership because St Paul is not a pleasant place to ride. It feels dangerous to ride in St Paul and it is. There are few bikeways and these are quite poor. There are a lot of drivers driving very fast and not paying attention. It’s very slowly getting better (thanks green hoodie dude) but still has a very long way to go. Low ridership in St Paul, relative to Minneapolis, is not just Nice Ride but all bicycling riding.

    I agree with you in principle but in this case not in practice. Nice Ride is one of, if not the, best run bikeshare systems in the world. I know the folks who run bikeshare in NYC and London and have had numerous conversations with those in Portland, Birmingham, Seattle and Barcelona — they all hold Nice Ride and Bill up quite high. Nice Ride have reached out to the public on a fairly consistent basis for input. We are quite fortunate to have Nice Ride and Bill Dossett in Minnesota. If and when they begin to falter on a consistent basis is when we should have a conversation about not working with them as tightly as we are today.

  4. Kate Lockhart November 9, 2017 at 9:25 pm #

    Hi Walker, thanks for the comment.

    First, let me say that I agree with you that ridership in Saint Paul is low for a lot of different reasons. There’s no question that the infrastructure leaves something to be desired, but there’s also no doubt that it’s getting better. My comment about low ridership was specific to Nice Ride. I think at least part of the reason so few folks in Saint Paul ride Nice Rides is because there are so few stations outside of downtown, and they aren’t in places people want to ride.

    As for Nice Ride…I’m not saying we shouldn’t have Nice Ride in the cities. I’m saying that Nice Ride shouldn’t be in charge of figuring out the future of bike share in Minneapolis and Saint Paul. The cities should be in charge of figuring out what works best for their citizens, not an organization that has a vested interest in the outcome. I also don’t think the cities should grant exclusivity to any one bike share provider – Nice Ride or anyone else.

    • Walker Angell
      Walker Angell November 10, 2017 at 10:36 am #

      I agree about the lack of bikes and stations around St Paul. And the locations of many. I have often wished for a higher station density and better placement. And, there are times that I’ve chosen not to ride because of that. I’ll note also that e-bikes are something I’m looking forward to seeing.

      However, the problem that Niceride (or any system provider) face is that more bikes and more stations and e-bikes are not likely to increase per bike ridership. If you go around St Paul and Minneapolis you’ll see a quite significantly higher number of non-Nice Ride normal clothing bicycle riders in Minneapolis. I believe stats for Nice Ride ridership aligns with that and that is a good predictor of future success. The result is that the cost per bike is likely two to three times greater in St Paul than in Minneapolis. For a system to be viable you need a high number of rides (or members) per bike. St Paul’s lower general ridership is not likely a workable model without some significant financial subsidies. Perhaps the city of St Paul should offer to subsidize higher density until they improve the street environment?

      I’ll counter that, at least for now, Nice Ride should indeed be in charge of figuring out the future of bikeshare in the Twin Cities and they should have exclusivity.

      On the first, Nice Ride have done exceptionally well so far. St Paul is not a Nice Ride issue but a City of St Paul and Ramsey County issue. And you want to put these same people in charge of bikeshare? St Paul is a great place for lycra clad bicycle drivers, not so great for the other 98% of the population. Until that changes the likelihood of success of any bikeshare system in St Paul is quite low. You can put gobs of share bikes out in all kinds of perfectly convenient locations but if people are afraid to ride, if they don’t have safe places to ride, then these bikes will just collect dust and siphon money from better opportunities.

      I don’t believe Nice Ride (or any bikeshare) can survive without exclusivity. It’s a tough enough environment as it is. Bringing in a competitor could siphon off just enough revenue from Nice Ride for them to go under. Would the competitor or competitors survive? Possibly. But likely not. We could very quickly end up with no bikeshare.

      Bikeshare is also something where a single consistent system is of significant benefit to users. Do you want to have to maintain memberships with multiple organizations? Or pay the increased costs of an umbrella system to manage a central membership? If not, how happy will you be when you need a bike if you see all kinds of Nice Ride bikes available but none of the Lime bikes that you have a membership for? And while the capitalist competition you want normally acts to increase service and decrease costs, it can also crush efficiency. If Nice Ride were grossly inefficient then competition would be good but from everything I’ve seen they are, so far, exceptionally good on the efficiency side.

      We have one of the most successful and most admired bikeshare systems in the world and one that has weathered some storms that put others under, why would we want to change that? If I thought Nice Ride were not well run and could be run significantly better I’d be leading the charge with you. I’ve never shy’d away from criticizing those I thought were not doing a good job. Just ask the folks at BikeMN or Ramsey County Public Works, but from everything I’ve seen Nice Ride are doing a better job than I believe anyone else could do.

      Once St Paul becomes a safer and more welcoming place for people to ride then I’m confident Nice Ride will be there and be successful.

  5. Steve Gross November 10, 2017 at 7:28 am #

    I just spent a week in Beijing, where dockless bikes completely dominate the city. The purchase price of each bike is around 50$US. It is difficult to exaggerate the impact of this system on Beijing itself. The service is insanely popular, cheap as hell (around 15cents per 30min), and incredibly convenient. I hope that Twin Cities can replicate this!

  6. Lou Miranda November 10, 2017 at 12:25 pm #

    Will bike sharing ever expand beyond Mpls & St. Paul? Should it become part of Metro Transit or otherwise part of the Met Council?

    • Walker Angell
      Walker Angell November 10, 2017 at 3:38 pm #

      It should expand to the ‘burbs. A key and perhaps primary use of bikeshare in The Netherlands and other European countries is last mile. Someone going to a doctor farther than they’d normally bicycle will take the train and then bikeshare from the station to the doc or other destination. Some of the bikeshare kiosks in the train stations are staffed with folks to do repair. Nearly all bikeshare throughout The Netherlands is run by OV. It’s a multi-modal system that works quite well.

      Residents of The Netherlands can get an OV-Chipkaart that works for bikeshare along with almost all trams, trains, and buses throughout the country.

      I’ve long thought that there are some great opportunities for companies to either provide bikes that can be checked out to ride to lunch or partner with Nice Ride to do it:

      https://streets.mn/2013/11/05/riding-to-lunch-in-shoreview/
      https://streets.mn/2013/07/30/wellness-on-wheels-lunch-ride-minnesota/
      https://streets.mn/2014/08/13/3m-local-miles/

      I believe Target (Brooklyn Center) and Thomson Reuters (Eagan) are doing so though I think their locations may be better for a recreational ride than anything utilitarian.

      • Tony Desnick November 12, 2017 at 10:15 am #

        (In the interest of full disclosure, I am working for Spin in government partnerships)

        There are current negotiations between some of the station-free providers and suburban communities. The suburbs should and will get bike share. If those suburban bikes start to leak into the cities, right of way rules will have to be in place. With exclusivity in place in Minneapolis and St. Paul, might someone traveling from Richfield to Minneapolis have to abandon the “suburban bike” at the city limit and search about for a Minneapolis or St. Paul bike? We need to make it easier not harder to rent a short rip bike in the Twin Cities.

        Most cities (eg. Dallas, Seattle, DC, Charlotte, Scottsdale, SF – 2 of them have exlcusive agreements with a service provider) are going to a permitting process. They are inviting anyone in who is willing to adhere to rules and regs. This, in part because city attorney are unwilling to litigate to enforce exclusivity agreements. It flies in the face of both anti-trust and restraint of trade legislation.

        • Walker Angell
          Walker Angell November 12, 2017 at 5:59 pm #

          Firstly, I’d love to see Spin and others in Twin Cities suburbs (and Shoreview / Arden Hills in particular). That said, I think we still need to protect Nice Ride in their core operating area or risk loosing them.

          Dockless bikeshare is still a new technology and being offered by mostly new companies. It is still somewhat unproven and I, like others, have experienced problems with the dockless systems. The primary problem is simply finding a bike – the app says it’s there but it’s nowhere to be seen. And then when you do finally find it you find it broken. Better locator tones and GPS may help but we’re not there yet with either.

          https://streets.mn/2016/10/12/portlands-bike-share-system/

          Some cities have experienced problems with too many dockless bikeshare bikes laying around unused and in inappropriate places.

          The costs of maintenance due to abuse and vandalism are appearing to be considerably higher for dockless. I think it’s still too early to tell though.

          I’m a fan of dockless, but these and other issues need to be addressed before dockless will be truly viable. I do expect that the kinks will get worked out and that eventually we’ll see success with dockless systems. Are we willing to risk killing the quite good system we have today to bet on dockless? I think that’s a risk we’d probably be best to avoid, for now.

          ——-

          How many people will choose to ride a bikeshare bike from an outlying suburb in to Minneapolis? Or the reverse? Possibly a lot, but given how few ride their own bikes today I’ll not hold my breath. Thanks to the lack of safe and comfortable protected bikeways and junctions the majority of such commuters today are part of the Strong and Fearless 1%. How many of the other 99% will be willing to brave our roads without safer places to ride?

          Even in the most bike-friendly countries in the world like The Netherlands and Denmark, bikeshare is primarily used as a last mile link in a multi-modal system, not for longer distance commutes. We may well be different but that’s hard to say at this point. The availability of Spin and other bikes in the suburbs will very likely encourage more people to ride. How many in what suburbs is hard to say.

          Perhaps an alternative then is to allow some maximum number of dockless bikes, like 25, to venture in to Minneapolis at any one time. This would provide some protection for Nice Ride so that we don’t loose them and allow Spin and others to offer a valuable service and see how it works. If these new entrants prove viable then at some point we can open up the entire metro to competition.

  7. Bill Dossett November 10, 2017 at 4:59 pm #

    Kate,

    First, I want to thank you for speaking up. We agree with your core premise: the Cities should take the lead on encouraging and regulating privately-funded bike share. We disagree about how to get there in a context that is new, rapidly-changing, and fueled by private capital.

    Our process is designed to turn over governance to a cooperative board controlled by our urban right of way owners. We intend to give that board a uniquely strong proposal to innovate and grow bike share in a smart and collaborative way.

    We believe our right of way owners must act cooperatively and strategically to seize an incredible opportunity in a way that maximizes civic goals for equity, sustainability, and integration with other mobility options.

    Thanks!

  8. Eric Saathoff
    Eric Saathoff November 12, 2017 at 8:37 am #

    What will prohibit LimeBike and Motivate from both opening up in St. Paul regardless of NiceRide. Has St. Paul already passed some sort of ordinance saying NR will be the exclusive rideshare operator in the city?

    You need the city’s cooperation to take over any of our precious parking spaces, but it takes much less cooperation to park bicycles to regular public spaces like bike racks (or gas meters).

    The downside to NR participation is that I feel they’ve failed a lot of St. Paul neighborhoods (in combination with our failed zoning and low-density).

    The upshot is that they are rideshare experts and it looks like there will be a lot of kinks to work out with dockless bike sharing. I’m glad there are full time experts looking at this because I don’t think our politicians or PW departments have the time to fully vet the options.

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