NYC Bike Share figures don’t add up

By Alex Thompson

(EDIT – I’m happy NYC is getting a massive bike share in place, but find the figures curious.)

$50 million.  That’s what Alta Planning says that the New York City bike share system – unveiled this week – will cost to run each year.

That figure seemed really high to me, so I hit page-up, and saw that the system will have 10,000 bikes.  Do the division:

$50,000,000 per year / 10,000 bikes = $5,000 per bike per year

Five grand per bike per year?  I just don’t see how that can make financial sense.  How can a system cost that much per bike per year.  Even if there’s substantial administrative overhead, that implies you’d be spending thousands of dollars per bike per year administrating the system.

And keep in mind, the press releases seem to suggest this $50 million figure does not include the initial investment.  So it’s not as if this is the start up cost.

NYC riders in 2008

NYC cyclists, Halloween, 2008. Photo by Alex C Thompson

Perhaps figures like this are the reason that NYC will not spend any public money (apart from the allocation of public space) for the bike share system.  In way, that’s a sad sign of the times.  Why can’t a city make the relatively small investment in a bike share system?  They do it for every other transportation system – government spends enormous capital on roads, airports, subways . . . but we can’t afford a bike share system?  Government makes those investments despite recession, in spite of falling revenues.

Here in LA former Mayor Richard Riordan and allies have long been investigating a bike share system for LA.  Word on the street is that private operators won’t do it because the estimated liability costs are too high.  They think LA is that dangerous to ride.

Maybe that’s why it’s costing NYC $5,000 per bike per year – insurance.  If the insurance policy is just 1/3 of the $50 million yearly – $17 million – what does that imply the operator expects in terms of injuries and fatalities?  It’s a stark reminder of how far we have to realize bike friendliness.

If someone has firm figures or insight, I’d love to hear it.

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8 Responses to “NYC Bike Share figures don’t add up”

  1. Here’s a pdf on installation and operation costs for Capital Bikeshare, which is a Alta bike sharing system.

    http://www.mwcog.org/uploads/committee-documents/aF5WWV9Z20110609085152.pdf

  2. From Dennis’ link, the start-up cost is pretty close to $5k per bike but the annual costs are less (on average, $16-18.6 million for maintenance [1,2], $1.7 million for bike replacement and $600k for terminal/station replacement [2]). The London scheme costs $37 million per year with 6000 bikes [3] so it’s not unreasonable to think that $50 million for 10000 bikes is accurate. The important thing to note is that the London scheme is turning a profit [3]. It’s the most profitable method of transportation the city has invested in.

    [1] http://www.nctr.usf.edu/jpt/pdf/JPT12-4DeMaio.pdf
    [2] http://www.mwcog.org/uploads/committee-documents/aF5WWV9Z20110609085152.pdf
    [3] http://www.guardian.co.uk/environment/green-living-blog/2010/oct/13/london-bike-hire-profit

  3. Could it be that there’s some crazy high upfront cost and they’re averaging it out over the course of the bike share system’s lifetime?

  4. Wow – did anyone open up Dennis’ pdf? The cost of single bike station is astronomical!

  5. And why is the 10-yr replacement cost for the station double the initial cost? I don’t see it explained. Inflation?

    Another model is JCDecaux, which already has a deal with City of LA for street furniture (avec publicité), and they have rolled out bikeshares in Paris & Lyon. Their model is heavily-subsidized hardware (incl. bikes/stations) in exchange for ad revenue.

    Chicago talked to them but went with B-Cycle. Don’t have the figures.

    I’d be interested to know if unit cost for installation, upkeep & admin increases or decreases with scale. 10k bikes is huge!

  6. From what I can grok based on the numbers of bikes this seems also similar in cost to Nice Ride in Minneapolis based on their expansion plans and funding for phase Ii:

    http://blogs.citypages.com/blotter/2011/03/nice_ride_minnesota_growing.php

  7. For that price (over $6k per bike), it would probably be cheaper to do away with the fancy technology, simply install low-tech bike corrals, and fill them with publicly-owned bikes. Bike theft would be high, but we could replace every bike every year and still come out ahead.

  8. @Joe B – I’m starting to agree – it seems like a lot of money and where’s all that money ultimately end up? Like you said, it might be better just to give away bikes. I can’t see our society doing that though – the notion of anything for free is antithetical to how we do things.

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