June 25, 2014
Vol: 21 No: 26

News

Membership has its privileges

By Aaron Burkhalter / Staff Reporter

Bike sharing’s dependence on credit cards threatens to keep it out of reach for poor people

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If you want to take one of Seattle’s new bike share cycles for a spin, you’ll have to charge it.

The first 30 minutes are free, but users must submit their credit cards so that they could be billed $1,200 in the event the bike is lost or stolen.

This keeps people without credit cards from being able to use the bikes.

Bike shares are touted as an affordable transportation option, allowing people to cheaply ride on bicycles in a network of stations placed around the city. Seattle’s bike share called Pronto, will include a discount rate for low-income people.

But a lower rate will do little good if people can’t access the bikes in the first place. One in 12 people in America has no bank account and one in five has limited bank access, according to the Federal Deposit Insurance Commission (FDIC).

How to enroll people who have no bank account or credit card is an issue that’s vexed bicycle share companies across the country. Many see “unbanked” people as the Holy Grail of bicycle shares, said Sean Wiedel, assistant commissioner for Chicago’s Department of Transportation, which oversees the city’s year-old bike share program, Divvy.

Rebecca Roush, secretary of the Pronto Board of Directors, said Pronto is working on a solution to the credit card problem and plans to have at least a low-income rate established by this fall.

“There’s no rubber stamp program for any bike share that’s going to work in any city,” she said.

Most bike share programs look to Boston for guidance. In that city, 15 to 20 percent of bike share members are on a low-income program that costs $5 a year.

Nicole Freedman, director of bicycle programs, said Boston’s bike share has been successful because of outreach at social services, libraries and community centers. The city promotes the low-income membership at 150 agencies and translates literature on the program into several languages. Doctors also can prescribe the bike share to patients who need more exercise.

Boston’s bike share has managed to enroll 400 to 500 people a year and expects to have 2,000 members by the end of the year, Freedman said.

Boston still requires a credit card to sign up and is looking for a solution, Freedman said. The city wanted to get it rolling first.

“We can do a lot more by starting a program, and over time we can work out the unbanked issue,” she said.

Chicago hasn’t found a solution to the credit-card conundrum either. City officials refer people who want to use bike sharing a bank account to Bank On Chicago, which offers low-cost credit and debit cards to low-income people.

To reach the populations that aren’t using it, Chicago’s bike share is promoting itself through community organizations. Most members are middle-class and have some college education, said Wiedel of Chicago’s Department of Transportation.

Chicago does not offer a discount rate. Membership costs $75 a year.

The city is exploring options, but must have some way to pay for the bike if it’s lost or stolen.

“What’s the hook to make sure people value the bike as much as we value the bike?” Wiedel said.

In Seattle, bike share is moving forward. Pronto will start offering memberships in August.

A membership allows people to use a bicycle for free for the first 30 minutes. The second half-hour will cost $2, and each additional half-hour will cost $5. Members will receive a key fob to access the bikes.

After that, Pronto will charge an escalating fee depending on how long the bike is used.

Bicycles in other bike-share programs around the world are typically three-speed bikes. Because of Seattle’s steep hills, Pronto’s bikes will be seven-speed.

The program will cost $4.4 million in the first year. Half of the funding is from state and federal grants. Other organizations and sponsors are paying for the rest.

Alaska Airlines provided a $2.5 million sponsorship in exchange for its logo appearing on the mud guards of all the bicycles.

Pronto is selling location sponsorships for $12,000 a year, which allows organizations to advertise on the kiosks.

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