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Minneapolis Biking Sharing a Success

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Much to my surprise, the first season of taxpayer-subsidized bike rental in Minneapolis did not result in massive theft and vandalism:

In Minneapolis, again, theft and vandalism simply haven’t materialized as problems. The operators expected to lose around ten percent of their bikes to crime in the first year, but so far, that figure has only turned out to be 0.3 percent.

With 700 bikes on the streets since June, said Dossett, only two bikes have disappeared. Vandalism has been minimal: There have been a few bikes that were graffitied, a few tires slashed, and one incident in which a motorist hit a bike-sharing station and shattered some glass.

That’s good news, for sure, but I am still skeptical. There’s a massive difference in scale between the laughable system  in Paris and the one in Minneapolis. Paris has already lost over 16,000 bikes. Minneapolis has only put out 700. The first ones go in the best places, with the most conscientious riders and neighbors. As the Minneapolis system expands and puts stations is less-smarmy neighborhoods, look for the loss rate to rise.

But still, similar systems in the United States are not shedding assets as fast as Euro systems. Better locks are given most of the credit. Denver even uses GPS tracking. Technology to the rescue!

Is the system a success? Of course the management says, “Yes”:

By mid August, the number of rentals had risen. On warm summer evenings, downtown Minneapolis was filled with the flickering lights of Nice Ride bikes. Nice Ride bike sharing has not only found acceptance, it's become a part of everyday life for many thousands of people. The bike stations are now part of the cities transportation infrastructure, providing users with a healthy and convenient way to get where they're going or to go places they've never been.

With a soft goals like “finding acceptance” and “becoming a part of everyday life”, how could it fail?

The local fishwrap had a story where the Director was even claiming the operation turned a profit for the year. A profit only in subsidy-land though. Disregard the donations to offset the captial cost of the program, and I can belive and operating profit. But the bikes and stations didn’t just pop out of some unicorn’s ear. Real-world accounting requires inclusion of the cost of capital.

At least it hasn’t been the same kind of drain as bus and rail systems, which notoriously ignore capital costs and still lose money on operations.

By public planner standards, the program has achieved the essential goal. It is capturing more subsidy:

Blue Cross and Blue Shield of Minnesota President and CEO Pat Geraghty announced a pledge of up to $1.5 million for the expansion of the Nice Ride Minnesota bike share system. This is a challenge pledge. If Nice Ride Minnesota secures other funding equal to two-thirds of the cost of added bikes and stations, Blue Cross will commit the other one-third, up to $1.5 million. As in Phase 1, Blue Cross will use proceeds from the historic tobacco litigation, not premium dollars, for this sponsorship.

By “other funding” they mean more “donations” like those made by smokers through the tobacco fund. Even when the government is not cutting the check, it is still a subsidy. Pro-bono work, too, can should be considered an indirect subsidy, due to its tax-favored status.

Number of rentals and number of subscriptions are legitimate measures. But real profit always matters even if the numbers are hidden. And if they’re using tobacco money, shouldn’t we be hearing about the number of lives saved by reduced pollution and increased exercise?

Maybe they’ll use some next year’s grant to invent such a report. That’s the path to further subsidy, too.