Marc Gunther

Business. Sustainability.

  • Blog
  • Bio
  • Books
  • Journalism
  • Speaking
  • Contact Marc
  • Subscribe

Should bike sharing be subsidized? Or privatized?

August 29, 2014

Capital_Bikeshare_station_outside_Eastern_Market_MetroI’m a fan of bike sharing, as regular readers of this blog know (see this and this), and a satisfied, albeit irregular, customer of Capital Bikeshare, the convenient and well-managed public bike-sharing system in Washington, D.C., which now extends into the suburbs of Maryland and Virginia.

There’s a potential cloud over bike sharing, though, and it is this: So far, at least, no big-city bike sharing system of which I am aware is financially self-supporting.

This doesn’t trouble me. Bike sharing is form of mass transit. If you believe, as I do, that subways and buses deserve taxpayer support, bike sharing does, too. It creates a slew of positive externalities, including reduced air pollution and greenhouse gas emissions, reduced traffic congestion, a healthier populace and the mobility that city dwellers without cars need to get to work or school. (You may be wondering, are cars subsidized, too? Perhaps, but not by as much as you would think, some say. But it’s complicated. A few years back in Slate, Dan Gross argued just the opposite, that governments provide massive subsidies to private car owners.)

In any event, we’ve learning from the bike sharing boom that bike sharing is very popular, but that at the current pricing levels — $75 for an annual membership, $15 for a three-day membership in Washington — it can’t pay for itself. New York’s Citibike was touted as a bike sharing system that would pay for itself with user fees and Citi’s marketing dollars, but it is millions of dollars in the red. Emily Badger of The Washington Post’s Wonkblog wrote a good analysis of the economics of the two systems.

A startup bike-sharing company called Zagster offers an alternative: private bike sharing. It provides bike sharing systems to companies, universities (including Yale and Duke), apartment buildings and hotels for their employees, students and guests. Lately, it’s been making headway in Detroit.

I wrote about Zagster this week for Guardian Sustainable Business. Here’s how my story begins:

Of all the big cities in America, Detroit is among the least hospitable to bike sharing. The city is bankrupt. Its residents are poor. And it sprawls over 142 sq miles (367.8 sq km), nearly enough area to fit San Francisco, Boston and New York within its borders. Winters can be harsh, public transit is dismal and it is, after all, the Motor City.

But a nimble little bike-sharing startup called Zagster is making inroads in Motown. Last year, Dan Gilbert, the founder of Quicken Loans who has invested more than $1.3bn in Detroit, turned to Zagster to start a private bike-sharing network for his employees. The local utility company DTE Energy, as well as the United Way of Southern Michigan and several small companies, followed. This week, General Motors announced that Zagster will make its bikes available to 19,000 employees at the 330-acre GM Tech Center in Warren.

What’s more, Bill Ford, the executive chairman of the Ford Motor Co, has invested in Zagster through Fontinalis Partners, a venture capital firm that invests in “next-generation mobility”.

Tim Ericson, the 28-year-old co-founder and CEO of Zagster, told me: “We’re creating what is almost becoming a citywide bike sharing program, with no public funds and no use of public space.”

As you might imagine, I have some reservations about Zagster’s model. The more we privatize goods and services — private schools, private parks in the form of country clubs, Google’s private bus from SF to its campus, and the like — the less political support there will be for public schools, parks and transport.

Then again, I can’t envision bike sharing come to Detroit in any other way.

You can read the rest of my story here.

Filed Under: Economics, Environment, Small Business, Social Entrepreneurs, Sustainability Tagged With: bike sharing, Dan Gross, Detroit, Emily Badger, Tim Ericson, Zagster

MOST POPULAR POSTS

    None Found

RECENT POSTS

  • Where to find me
  • Goodbye to this blog
  • The egg industry, scrambling
  • Monsanto, and its critics
  • COP out

Recent Comments

  • Daniel Ruffolo on Verlasso: Farming salmon the right way
  • travis on Why Mars is a sustainability leader
  • joel longstreth on Why Mars is a sustainability leader
  • John Shinavier on What’s for breakfast? Time to get Beyond Eggs.
  • Terry on Crop insurance: a bailout program for farmers

CATEGORIES

  • Animal welfare (7)
  • Blogging (24)
  • Books (60)
  • Business Ethics (99)
  • Climate Change (561)
  • Consumption (392)
  • Corporate Governance (37)
  • CSR (286)
  • Economics (282)
  • Energy (491)
  • Environment (836)
  • Food (235)
  • Geoengineering (13)
  • Global Poverty (121)
  • Health (39)
  • Human rights (43)
  • Investing (48)
  • Leadership (146)
  • Media (141)
  • NGOs (295)
  • Politics (252)
  • Religion (23)
  • Rwanda (9)
  • Small Business (60)
  • Social Entrepreneurs (50)
  • Socially Responsible Investing (63)
  • SRI (19)
  • Sustainability (936)
  • Transparency (107)
  • Uncategorized (16)
  • Water (27)
  • Workplace (108)

MOST POPULAR TAGS

Apple Bill Gates Bill McKibben Brainstorm Green BYD Ceres Climate Change Coca Cola Cooking for Solutions David Crane DuPont electric cars Environmental Defense Fund Fred Krupp Gary Hirshberg GE General Electric geoengineering GMOs Google Greenpeace Guardian Sustainable Business Jeffrey Hollender Joel Makower Mark Tercek McDonald's Monterey Bay Aquarium Net Impact Nike Nissan Leaf NRDC NRG Energy Patagonia Paul Hawken PepsiCo Russ Roberts Seventh Generation Sierra Club Starbucks Sustainability The Nature Conservancy U.S. Climate Action Partnership Unilever Wal-Mart Walmart

Archives

Copyright © 2018 · Marc Gunther · All Rights Reserved