In an update at yesterday’s Downtown Austin Alliance Mobility and Transportation Committee, Austin Bicycle/Pedestrian Project Coordinator Nadia Barrera laid out the City of Austin’s current plan for bringing a bicycle sharing system to Austin by spring 2013. The short term bike rental service similar to systems in San Antonio and Minneapolis would allow one way travel between dozens of bike kiosks/stations spread throughout town. The program has been wildly popular in other cities and is credited with some pretty amazing numbers of people choosing to cycle over driving a car in Sevilla.

Minnesota’s Nice Ride bike share program has been exceeding expectations in popularity
Nice Ride MN: Minnesota’s Bike Share Expands.

The 2009 Master Bicycle Plan calls for a city wide bike share program by 2020, and City staff are working on getting a program up and running in the Downtown area in as soon as 18 months. The current plan is to create a non-profit organization to run the service and contract out to an established bike share vendor like B-Cycle or Bixi to provide the equipment and technical support for the system. The estimated start-up cost for the program is $2.5 million with the number of bicycles and stations at launch to be determined by the winning vendor bid. The equipment costs in other cities have broken out as follows: bike kiosks at $40-50,000 each, bikes $1000-$1500 each, ongoing maintenance and operating costs $1000-$2500 per bike per year. For the bike share system to work, it is critical that there be many docking kiosks within a short walking distance of each other in the service area and enough bikes that each station will always have a few.

Operational revenue would come from rental fees and service memberships, advertising sales, and kiosk hosting sponsorships. Other services have one day membership at around $5 and annual memberships in the $50-$100 range. Most allow the first 30 minutes to be free and then charge by blocks of time after that. All day use is discouraged with a high daily rate of $65. This keeps more bikes in circulation and prevents the service from competing with local, daily rental businesses.

One concern mentioned in the presentation was the fact that nearly every already established bicycle share program has experienced second year revenue short falls meaning it is unlikely the program will be profitable within its first year. Considering the high capital costs and the fact that this is a start-up in a new market, this is not unusual or necessarily a mark against the viability of the program. National carsharing company and venture capital darling Zipcar has been in business for a decade but has yet to be profitable as a company (many of their individual markets are profitable.) Again, creating a new market is not cheap, but it is yet to be seen what entity will provide post start-up capital as the service seeks profitability.

Unfortunately, Mayor Lee Leffingwell took all direct City of Austin funding off the table for this project. Instead, City staff are seeking grant funding from CAMPO for the start-up. 20% of the total budget for the grant, or $500,000, must come from outside sources and without help from the City budget, staff are reaching out to private entities with the goal of 10 private/corporate sponsors at $50,000 each. Mellow Johnny’s parent company and local advertising giant GDS&M have committed to raising the private funds. This may end up being the biggest hiccup to getting the service off the ground. Such partnerships have been tried to launch or expand car sharing service with very limited success. Perhaps bike share will be different.

Assuming the grant funding and matching dollars are secured, the City has a goal of awarding the vendor contracts next summer and launching the full service during SXSW 2013.