It’s clear we need to back-pedal on costly Mobi plan

Ben­e­fits to com­mu­nity don’t jus­tify steep costs, a group of eco­nom­ics stu­dents says.

Vancouver Sun - - OPINION - The writ­ers — Ash­ley Tanaka, Tobias Gat­tinger, Jamie Kon­rad, Gemma Fer­gu­son, Divya Dhami, and Patrick Sun — are study­ing eco­nom­ics at the Univer­sity of Bri­tish Columbia.

In July 2016, the City of Van­cou­ver launched Mobi, a bike-share pro­gram de­signed to in­crease daily bi­cy­cle use and “fill a gap in the trans­porta­tion sys­tem” while mov­ing to­ward the greater goal of a “green” city, as Mayor Gre­gor Robertson put it. And while Mobi may ap­pear to de­liver ben­e­fits, the mayor’s vi­sion for clean two-wheeled tran­sit may not be all that it seems. It turns out that those ben­e­fits come with a high price tag and high risk.

The City of Van­cou­ver is fund­ing a pri­vate com­pany, Van­cou­ver Bike Share Inc., to the tune of mil­lions of dol­lars over the next five years to op­er­ate Mobi. The city will re­ceive an undis­closed per­cent­age of rev­enue for each bike used dur­ing the first five years of the bike­share op­er­a­tion. Mobi se­cured a spon­sor last De­cem­ber, with Shaw com­mit­ting to a five-year part­ner­ship. Shaw agreed to pay Mobi an undis­closed amount of money and pro­vide Wi-Fi at many sta­tions in ex­change for Shaw brand­ing on all bikes and sta­tions.

With only 1,500 bi­cy­cles, the startup cost of $5 mil­lion, paid by the tax­pay­ers of Van­cou­ver, is steep. On top of this cost is $800,000 in for­gone rev­enue from me­tered park­ing an­nu­ally to make space for the bike racks, as well as an ad­di­tional $500,000 a year in sub­si­dies for staffing and other costs. Of course, we’re told mak­ing a profit is not the pur­pose of the pro­gram. Van­cou­ver’s gen­eral man­ager of en­gi­neer­ing, Jerry Do­bro­volny, has said mo­bil­ity, not profit, is the goal of the bike share.

While the City of Van­cou­ver is largely fund­ing Mobi out of tax pro­ceeds, Toronto signed a spon­sor­ship deal in 2014 with TD Bank to “cover all op­er­at­ing costs” for Bike Share Toronto. Ot­tawa also re­cently launched VeloGo and does not pro­vide fund­ing. Van­cou­ver has 150 bike sta­tions and 1,500 bikes, while Toronto op­er­ates 270 sta­tions and 2,750 bikes, and Mon­treal op­er­ates 540 sta­tions and 6,250 bikes. Ot­tawa has just 28 sta­tions.

Bus­ing or even pur­chas­ing a bike are cheaper and more ef­fi­cient op­tions for most lower-in­come com­muters.

Ini­tially, Mobi was tar­geted to­ward low­er­in­come com­muters. How­ever, since Mobi’s launch, the rates have in­creased. Cur­rently, Mobi’s rates are $9.75 for a 24-hour pass, $75 for a three-month pass, and $129 for a one-year pass (the ini­tial price of the one-year pass was $99). This is a high price to pay for bikes that al­low only 30 min­utes of ac­cess at one time, so it clearly caters to the well-to-do. Bus­ing or even pur­chas­ing a bike are cheaper and more ef­fi­cient op­tions for most lower-in­come com­muters.

Some Mobi sta­tions are not lo­cated where con­sumers — at least those for whom the pro­gram was pur­port­edly de­signed — need them. Re­cently, Mobi opened five new sta­tions in the Stan­ley Park area, and plans to ex­pand to­ward Third Beach and English Bay Bath­house. These ar­eas are largely pop­u­lated by tourists and recre­ational bike users rather than com­muters. Around Stan­ley Park, tax­payer-sub­si­dized Mobi un­fairly com­petes with bike shops that rent bikes to sup­port their busi­nesses and pro­vide jobs.

The City of Van­cou­ver is un­der con­tract with Mobi for the re­main­der of the five-year pe­riod that be­gan in 2016. Once the con­tract is up, the city should ter­mi­nate it and stop fund­ing Mobi. The test phase launched with 1,300 found­ing mem­bers, and Mobi an­tic­i­pated it would have 10,000 users at its one-year an­niver­sary. On that date, it had 6,300, far short of its goal. The pro­gram now has 6,400 mem­bers. For the city to break even on this in­vest­ment, Mobi would need to ex­pe­ri­ence much larger growth rates than it has shown to this point and, based on per­for­mance re­ports, achiev­ing an ad­e­quate rate of growth is un­likely.

By the end of the con­tract, Van­cou­ver will have in­vested at least $10.5 mil­lion in Mobi, money that could have been bet­ter used else­where. The city’s pro­mo­tion of bike use through Mobi has failed to de­liver suf­fi­cient ben­e­fits to the com­mu­nity to jus­tify its costs. It is ev­i­dent that in 2021 Van­cou­ver should no longer fund a city bike share pro­gram.

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