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 ( 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.