The Morning Report
San Diego news and info
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San Diego is one of the country’s most expensive cities to live in.
Following suit, San Diego’s bike-share program is gearing up to be the most expensive program in the U.S. for users. The program is finally set to launch at the end of October after numerous delays.
Throughout the U.S., bike-share programs operate with similar business models under different companies. Essentially, a user can buy a membership – which usually lasts for a month, several months or a year – or an access pass, which can vary in length of time between a day and a month.
San Diego’s bike-share program, operated and entirely funded by the company DecoBike, will cost $125 for an annual membership (though it’s $99 for the first 1,500 people who sign up), $20 for a monthly subscription or $15 for a 24-hour pass.
A membership grants access to a bike for 30 minutes before additional charges kick in. At the end of 30 minutes, bikers must either return the bike and get a new one to continue on their way, or pay another $5 for each additional 30 minutes on the same bike.
Under this model, it makes more sense to use the bikes as an alternate form of transportation (i.e., to get to work, a trolley stop) rather than for recreation (i.e., a leisurely ride around the beach), as the free 30-minute limit on a single bike favors short bursts of riding over long trips.
Minneapolis has one of the cheapest bike-share programs. Nice Ride Minnesota, the bike-share company there, charges $65 for an annual membership (almost half of DecoBike San Diego’s annual fees), and $15 for a 30-day pass.
Other cities have varied prices that still fall below San Diego’s. Chicago and Washington, D.C.’s bike-share programs charge an annual fee of $75. Denver’s yearly fee is $80, San Francisco’s is $88 and New York’s is $95.
The closest in price is Miami Beach, another city that operates under DecoBike. Its monthly prices fall about $5 cheaper than San Diego’s, although its daily prices are strangely about $10 more expensive than San Diego’s.
Why Is It So Expensive Here?
Many bike-share cities – including Washington D.C. and Minneapolis – rely on a combination of government subsidy and private investment to get started. The injection of government funds allows the programs to keep prices down for consumers.
But San Diego’s bike-share program is entirely funded by an $8 million investment from DecoBike. The city is slated to rake in about $1 million to $2.6 million from the program at no cost to taxpayers.
David Silverman, DecoBike’s marketing director, said a higher price was necessary for the private model to pay off.
San Diego’s program will be larger and more spread out than DecoBike’s other system in Miami Beach, Silverman said, which also requires a higher fee.
Nevertheless, John Anderson, a board member of activist group BikeSD, said high prices could give San Diegans pause before taking advantage of the bikes.
“Costs can definitely be a hindrance,” Anderson said. “But hopefully if it is an impediment, they’d be able to adjust it over time.”
Anderson said San Diego’s DecoBike could go the way of New York’s bike-share system, which is also privately funded. Granted, New York’s membership prices are still among the highest. But to try to keep them down, Alta Bicycle Share partnered with Citigroup in New York in a $41 million deal that put the Citi logo on all the bikes, rebranding the program as “CitiBike.”
“I think there is a threshold that could dis-incentivize people from [joining DecoBike], but hopefully they will reach out to local companies to make the annual subscriptions more affordable if that becomes a problem,” Anderson said.
Silverman, the marketing director at DecoBike, didn’t rule that out.
“Our contract with the city allows for advertising on the bike kiosks as a means for generating revenue to support our investment,” he said in an email. “This could take the form of a sponsor who would be granted naming rights, like the New York system, but we don’t have a sponsor identified at this time.”
Meanwhile, Anderson said he hopes the company will be able to adjust if the launch doesn’t pan out as planned.
“Having a private operator is a little bit different operation than what most cities offer,” he said. “But I know [DecoBike is] in Miami and other cities, so hopefully they can draw on those experiences to adjust the prices if it doesn’t quite work out.”