Bicycling
CaBi goes corporate, should consider Eco Pass model
DDOT recently announced a corporate-sponsored bikeshare program that allows area employers to purchase bikeshare memberships to give to employees. As a next step, it should consider offering a blanket membership that applies to all employees, like the transit Eco Passes in a number of western cities.
Photo by DDOT
The current program has four membership levels, from Bronze to Platinum, with varying levels of support. The lowest lets employers to offer a 25% discount to employees off the introductory rate of $50 per year, and the highest has the employer pick up the entire check, including overage charges.
The first corporate partner was the development firm Akridge, who bought memberships for 200 employees. Friends of the Earth and the League of American Bicyclists also joined.
Under this arrangement, the employers simply buy a block of memberships and distribute codes to employees to activate them. That's a good model for some employers. But DDOT and Capital Bikeshare should also consider another model for group payments, similar to Eco Passes.
How about instead of paying for only the employees that say they want a bikeshare membership, the employer pays for everybody they employ? Not every employee would end up using bikeshare as much as people who specifically signed up to get a code, allowing for a much lower cost per employee.
It's possible that spreading out the cost of bulk memberships could reduce the price to less than $5 or $10 per employee per year. After all, when you buy health insurance, you don't pay as if you have a major surgery and hospitalization every year, you pay based on the risk that you might have one at some point. By spreading out this payment over many employees, the cost per employee decreases.
VTA, in and around San Jose, CA, uses this model when pricing Eco Passes. Employers can buy passes for all of their employees for a big discount, because not everyone is going to use transit. Prices vary by size of employer and the location, with the cheapest passes available at around $9 per employee per year compared to about $1,540 for a transit pass. Other Eco Pass examples exist in Denver and San Diego
The benefit of this arrangement is to put a membership or pass in the hands of people that don't even know they want one. If you have to fill out paperwork in advance and obtain a key after working out the payment through HR, you're less likely to get a membership even if you think you might want one someday. On the other hand, if every employee could swipe an ID card or enter a badge number to get a one-day membership at any time, employees might try it out and end up using it.
This would be particularly valuable for colleges. Every student could automatically be able to use bikeshare using just a student ID. If few students used bikeshare, then the cost to the university could be extremely low. If a lot use bikeshare, then it's providing a valuable service and reducing demand for expensive shuttles or traffic around the campus.
 | Michael Perkins blogs about Metro operations and fares, performance parking, and any other government and economics information he finds on the Web. He lives with his wife and two children in Arlington, Virginia.    |
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by andrew on Oct 26, 2010 12:55 pm • link • report
by ErikD on Oct 26, 2010 1:03 pm • link • report
by blogo on Oct 26, 2010 1:18 pm • link • report
I think you are right that it won't be a large replacement for cars of regular commuters. I think for folks who live in DC, it is an option to go somewhere close by using a bicycle rather than walking or mass transit, and may even replace a car trip or two.
by Thomas on Oct 26, 2010 1:30 pm • link • report
I know some of the current stations have gone near federal agencies or embassies. Not sure if they specifically requested them, though. It would also be a good pitch for ANCs, BIDs, etc.
by Gavin on Oct 26, 2010 1:35 pm • link • report
by andrew on Oct 26, 2010 1:38 pm • link • report
Pricing model isn't based on transit; more like a gym. You can sell 10x the number of memberships to a bike, and hope they aren't being used all the time. Also there is strange patterns going on in terms of where the bikes are used and where they are returned.
Not to mention fraud (can't wait for students to pass along free codes for bikes to other people), usage time (if college is paying the bill, use the bike for 4+ hours), and theft (again, tieing it into a individual is a strong incentive not to steal the bike)
And you are reducing the cost from $50 a person to maybe $10?
by charlie on Oct 26, 2010 1:40 pm • link • report
Not to mention fraud (can't wait for students to pass along free codes for bikes to other people), usage time (if college is paying the bill, use the bike for 4+ hours), and theft (again, tieing it into a individual is a strong incentive not to steal the bike)
I think you're misunderstanding how this would work (as well as how the current corporate memberships work).
From a user's perspective, each individual still has to have their own key, and that key is linked to their own credit card - therefore the user is liable for the loss and damage to the bike. All that changes is who pays for the annual membership fee - with a corporate membership, the company pays.
What Michael is proposing is a slight change to how the corporate membership is structured. Basically, CaBi will give the company a discounted rate, and in return the company must provide the benefit to all of their employees, whether they use it or not. If you price it right, it's revenue-neutral in terms of annual memberships, but you lower the barriers to entry for new users, since all of the employees of that company can basically try the system for free.
by Alex B. on Oct 26, 2010 1:49 pm • link • report
"Every student could automatically be able to use bikeshare using just a student ID."
Which would be a very different model than the existing corporate sponsorships as you describe.
Again, what is the point here? Selling a corporate sponsor 1000 day passes (which are paper, but require you to enter your credit card and take a $100 deposit) would seem a much easier way to introduce members.
I'd rather see a focus on corporate sponsors being used to lay out more stations.....
by charlie on Oct 26, 2010 1:57 pm • link • report
I just returned from using CaBi to run some errands. I walked the 5 min to the new Lincoln Park NE rack, to my bank's ATM on 1st and Penn SE, to the Harris Teeter at the east end of Penn (picking up 4-5 items that went on the front rack of the bike), and back to Lincoln Park. That certainly wouldn't be a Metro trip, and it's a bit stingy to call it a "walk extender".
It definitely replaced a car trip, though.
by oboe on Oct 26, 2010 2:02 pm • link • report
ErikD, I believe employers can pay to get a station, but not sure if CaBi has published pricing for it. I'm sure any employer that contacted them could arrange it.
Blogo, while we can't be certain what kind of trips will be displaced, look at the precedents in Europe. Lyon and Paris were both highly congested cities before bikeshare, now that it's been established there, the results seem to indicate some minor reductions in congestion. Whether its due to bikeshare, societal forces, or some other infrastructure changes is a matter best left to the academics, but a change has occurred.
by wil on Oct 26, 2010 2:02 pm • link • report
m I the only one who doesn't see how Cabi will in anyway meaningfully be a substitute for cars. Metro substitute? Sure. Walk extender? Yes, but I don't buy that it will displace much of anything in terms of autos.
This won't replace long-distance (or heavy-load) trips by auto, but it would certainly replace a lot of "errand" -type trips. It could easily make purchasing a *second* car unnecessary.
by oboe on Oct 26, 2010 2:06 pm • link • report
Yes, you're right - that kind of idea probably won't work - every CaBi key needs to be backed by a credit card of some kind.
by Alex B. on Oct 26, 2010 2:12 pm • link • report
The key is to set the prices so that it comes out revenue neutral between paying full price for only the employees that say they want it, and paying a discounted rate but for everyone. VTA and Denver (and other cities too) have come up with ways to set this pricing, it should be possible for bikeshare, too.
I've already replaced a couple of bus/walk trips with CaBi and I own a bike. It's competitive with a Metro bike locker, in my case.
by Michael Perkins on Oct 26, 2010 2:13 pm • link • report
In the one weekend I've been a CaBi member I've taken a bike 3 times where I otherwise would have driven. Once to Woodley Park from my house in Dupont (round trip) and once to Georgetown (I walked back).
by b on Oct 26, 2010 2:18 pm • link • report
The single biggest reason that CaBi stations have a key and not a regular RFID card is energy use. The physical key means that the RFID reader doesn't activate until the key is inserted into the slot. Unlike, say SmarTrip card readers that are on all the time (and therefore drawing power all the time), this enables the CaBi system to rely completely on solar power alone instead of wasting energy on a RFID reader that's not being used.
That said, the technology in use isn't really the issue - whether using a key or not, each CaBi user must be linked to a credit card of some kind in case of theft or damage. While a University might be willing to cover a student's membership fee, I highly doubt that a University would want to cover their liability as well - meaning that student would still have to put a credit card on file.
by Alex B. on Oct 26, 2010 2:21 pm • link • report
I assume that the university or employer can have a standard agreement that excess charges will be deducted from payroll or charged to the student's account. It's not like these guys don't already have an existing financial relationship.
by Michael Perkins on Oct 26, 2010 2:42 pm • link • report
@Mperkins; I'd love to see the litigation fees when an employer take $1000 out of my paycheck because the bike I used was stolen. That would be fun. Same with students.
Again, what is the goal here? Increasing memberships? Getting the initial price down? Introducing people to the idea of bikeshare? There are some internal contradictions.
by charlie on Oct 26, 2010 3:03 pm • link • report
Sure, an employer could do that - but why? Then each corporate member would have to set up an essentially redundant payment and liability system to the one that CaBi already has in place - that seems like an awful lot of work for the purpose of eliminating the already relatively painless step of registering via CaBi's website.
Also - if I were a student, I'd much rather have CaBi charging my user fees onto an account that I control (i.e. my own credit card) rather than tacking it on to my tuition bill. Maybe things are better now, but when I was in school it was far easier to deal with my bank than it was to deal with the bursar's office. It's not just the potential fee of $1,000 if I lose the bike, I'd rather not have to deal with them every month for that one trip I had that went longer than 30 minutes and therefore there's a $1.50 fee on my tuition bill.
Granted, those are just my personal preferences. That said, I can see why Capital Bikeshare would prefer that users sign up via their system as well - they'd want to make it easy for students who graduate (or employees who change jobs) to continue using the system, therefore they'd want their sign-up info held independently.
by Alex B. on Oct 26, 2010 3:08 pm • link • report
For example, I get discounted ZipCar through my employer. A sheet was included in my HR packet detailing the benefit. We have a special web link on that sheet that you go to (www.zipcar.com/EMPLOYERNAME or something) and then you sign up as you normally would. ZipCar sends the contact person at your employer an e-mail saying "does this person actually work here" and HR respods. From my point of view it was completely seamless as part of the registration process.
I agree with some others, there are plenty of ways to give more people more access to bikeshare and let employers get in on it, without refitting the system so that everyone can use their student id/smartrip/shoprite val-u card seamlessly.
by MLD on Oct 26, 2010 3:24 pm • link • report
The other hybrid option would be to have the students at the local universities sign up (individually) through their respective ID card "flex accounts", which are already set up--at most if not all of the local universities--to be used as payment for local restaurants, shops, etc. (At Georgetown, it's the GOCard). These are usually set up as debit accounts that students or their parents can pay into.
If CaBi can work the setups with individual universities, than the discounted registration, as well as overage fees could be charged to the flex account. The one catch would be the $1000/$100 liability.
But I think the plain old "member discount" arrangement is likely the best one, at least for now.
by Jacques on Oct 26, 2010 4:41 pm • link • report
Blogo, in Montreal Bixi has replaced about 200,000 car trips a year. It's up to you to decide if that is meaningful.
While this is a great idea, I don't think CaBi is going to suffer from the lack of members. If anything, I could see them capping membership to provide system reliability.
by David C on Oct 26, 2010 10:58 pm • link • report
I could see them capping membership to provide system reliability.
Let's hope not! Better to keep adding more bikes and more stations than capping memberships. This is a problem I hope they have to wrestle with--too many members.
by Steve O on Oct 27, 2010 10:41 am • link • report
by Allen Greenberg on Oct 27, 2010 6:37 pm • link • report
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