The Seattle City Council today voted 7-2 to approve legislation that will direct $1.4 million to buy out a struggling bike-share program.
In October 2014, the city’s bike-share program called Pronto Cycle Share debuted as a public-private partnership. Late last year, the council set aside $5 million to expand the program, but plans changed after Pronto reported that it was “insolvent” due to operating losses ($1.2 million of debt) and fewer-than-expected ridership numbers.
Councilmembers spent the past few months meeting with transportation officials and debating over who should be responsible for running a bike-share program in Seattle: the city, or a private company. Topics like equity and transportation infrastructure dominated the conversation.
Ultimately, the council agreed today to use $1.4 million to purchase Pronto Cycle Share from non-profit Puget Sound Bike Share (which owns it), acquire its assets, and use the remaining $3.6 million to expand the city-owned program over the next few years.
Councilmembers Tim Burgess and Lisa Herbold voted against the legislation today, noting that the program should be run by a private company. The Stranger and Seattle Bike Blog have some other details from today’s council meeting, including a few amendments related to safe bike lanes and serving low-income communities. Seattle Bike Blog noted that Burgess referenced “optimism bias” in regard to those supporting the legislation, while Herbold said that bailing out Pronto was “like buying a flip phone and paying off the flip phone company’s debt before buying a smart phone.”
The Sustainability and Transportation Committee earlier this month voted 4-2 to approve the ordinance.
Here’s how the city describes why the program fell into debt:
Seattle’s current system, operated by Pronto, is insolvent for several reasons. In this system, operations are outsourced to a third party (unlike other bike share systems) and this creates substantial overhead costs. Additionally, insufficient funds were raised for the initial equipment purchases and consequently, borrowing costs lead to ongoing debt service payments that contributed to year-end net losses. When overhead costs and debt service payments are removed, the bike share system costs and revenues are comparable with other successful bike share systems around the country. To shift the system to an operational equilibrium where costs are more in line with revenues, and then to proceed with an expansion, the City needs to acquire the portion of the assets that Pronto owns.
The current program is essentially a Car2go for bicycles and allows people to rent one of 500 seven-gear bikes, pedal around, and then drop off the bike at any of the 54 docking stations in town spread around the University District, South Lake Union, Downtown and Capitol Hill.
Bikers can buy an $85 annual membership that allow users to rent bikes for 30 minutes at a time without any extra charges. Those that don’t need a year-long membership can buy a $8 24-hour pass or a $16 3-day pass.
Pronto was funded by grants, sponsorships and user fees. Alaska Airlines, Vulcan, REI, Seattle’s Children’s Hospital, and others put up money to sponsor the program. Brooklyn-based Motivate, which manages similar services in nine other cities worldwide — some of which are completely private — operates the program.
There are around 3,000 members today utilizing Seattle’s bike-share system, which falls below earlier projections. Here’s how it stacks up against other programs around the country:
