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As City Hall considers bike share bailout, Seattle car sharing ready to expand

As a Car2Go competitor makes ready to make its move in Seattle, the City Council could be ready to rescue Seattle’s bike share system and put Pronto on track for an expansion in 2017 with a committee vote on Friday.

A year after the Seattle City Council voted to allow three more “free-floating car share” vendors to join Car2Go, a BMW-backed competitor to Daimler AG’s Car2Go service is preparing to launch in Seattle after folding operations in San Francisco last year.

(Image: DriveNow)

(Image: DriveNow)

CHS has learned DriveNow has started hiring for its Seattle operations and is in the midst of setting up a downtown office. DriveNow’s all-electric BMW i3s were also spotted driving around Belltown this week. According to SDOT, DriveNow has not yet filed for a special parking permit that would allow drivers to park cars without paying street meters — a key component to free-floating car shares.

A spokesperson for DriveNow told CHS the company is “exploring the potential” of operating in a number of cities, but declined to comment on the recent hires or the cars seen in Seattle. DriveNow CEO Rich Steinberg previously said service would start in mid-2015.

Launched in Munich in 2011, DriveNow currently operates in several European cities. After its 2013 launch of U.S. operations in San Francisco, the company closed up shop last year citing insurmountable problems with the city’s parking regulations.

Bike bailout
Meanwhile back on two wheels, the city’s bike share plan appears to be to keep the system outside of the for-profit business sphere. Unless the City Council approves a $1.4 million rescue package for Pronto by March 30th, the system goes belly-up. Transportation committee members will once again be considering the deal during their Friday afternoon meeting.

UPDATE: Committee chair Mike O’Brien decided to delay a vote on the plan until early next month so council members could focus on gathering more information.

First Downtown Protected Bike Lane Opens on Second Avenue

SDOT director Scott Kubly and head of active transportation Nicole Freedman — who both have experience managing bike share systems — urged council members to support bikeshare in Seattle. Kubly said that adding more bikes in the city makes biking safer overall and said concerns that bike share won’t work in Seattle are unfounded given similar systems operate in some 500 cities worldwide.

The current plan would transition Pronto’s ownership from the third-party nonprofit that launched it to the City, pull it out of the red, avoid paying money to the feds, and put the system on track for a 2017 expansion. Seattle would acquire all of the assets owned by Puget Sound Bike Share under the deal.

Acquiring the system without expanding it would cost the City roughly $110,000 a year after 2016. If the system did expand, Freedman said SDOT would spend the rest of the year negotiating new sponsorship deals to help subsidize the cost.

In October, CHS reported on the City’s plans to take over Pronto to stabilize an underused system, expand it to more of the city, and transform the fleet into a new generation of bikes. A federal TIGER grant allowed the City to get a head start by purchasing 28 of the system’s 54 stations. Since then, details of the system’s financial failures emerged. City Council analysis explains what happened:

Seattle’s current system, operated by Pronto, is insolvent for several reasons. In this system, operations are outsourced to a third party (unlike other bike share systems) and this creates substantial overhead costs. Additionally, insufficient funds were raised for the initial equipment purchases and consequently, borrowing costs lead to ongoing debt service payments that contributed to year-end net losses.

But as the Seattle Bike Blog reported, former PSBS executive director Holly Houser had a different take on what went down. The biggest cause of the showdown, Houser told SBB, came from City’s miscommunication and delays in taking over the system. Despite the pricier-than-expected buyout, City Council transportation chair Mike O’Brien has said he thinks a takeover is still the best course of action.

$5 million in Seattle’s 2016 budget was approved for expanding the Pronto network next year. SDOT officials say bike share is most effective at scale, offering the highest possible number of connections and serving the broadest range riders. Previous planning called for Pronto to expand to cover all of Capitol Hill to 23rd Ave, much of the Central District, parts of south Seattle, the U-District, and Green Lake. SDOT predicts trips could nearly quadruple under the expansion:

Screen Shot 2016-02-18 at 4.52.38 PM

Here is a look at how other cities have improved through expanding their systems:

Screen Shot 2016-02-18 at 12.23.36 PM

Car share cruising
Car2Go currently has 750 vehicles permitted for its service — the maximum allowed by the City for an individual provider. With four vendors, that means Seattle could have up to 3,000 free-floating cars on the road. SDOT is currently reviewing its permitting policy and is expected to have a new director’s rule out in the coming months.

As part of the regulations, DriveNow could have up to 500 vehicles concentrated anywhere in Seattle or 750 that must be accessible citywide, which would need to happen after two years in any event.

As chair of the transportation committee, O’Brien said he had not heard any firm plans for DriveNow to enter the market or that Seattle’s regulations were keeping companies from coming here sooner.

“I expect if (Car2Go) is profitable, more vendors will come,” O’Brien said.
“I don’t believe there is any reason to provide any subsidies for this.”

SDOT is currently studying the usage of popular transportation-network companies like Uber and Lyft and how they factor into Seattle’s overall car share market.

As with the bike share, SDOT is also attempting to widen Car2Go’s ridership among lower income drivers by offering free minutes to people who receive utility discounts. “It will expose the community to one more alternative to getting around,” said SDOT’s mobility programs manager Cristina Van Valkenburg. The credits are expected to be made available this month.

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15 thoughts on “As City Hall considers bike share bailout, Seattle car sharing ready to expand

  1. The City needs to cut their losses on the bike share program. It sounds like a great idea, but when you consider a lot of factors like weather, terrain, and even lack of stations – it won’t likely take off that easily. Sure, more stations could be built and the usage would increase somewhat, but if there’s a gimongous hill between point A and point B….

    The idea of ridesharing is great, and I’d definitely pay more for a BMW i3 than a Car2Go (not that Car2Go is bad, by any means). One question I’d be curious about – all these rideshare vehicles sound great – until there’s so many that they’re parked on the streets and residents who have their own cars are unable to easily park near their homes. (And none of that car-hating crap – owning a car is as much a right as it is for you to loathe it).

    • Leaving the car/parking thing aside, the plans for Pronto would accomplish what you’re skeptical about. They want to expand the network so more trips make sense, and it’s not just for affluent white folks anymore (which it *mostly* is currently). They also want to electrify the fleet and make other usability upgrades.

      Essentially, there is a plan to lower the following barriers:
      -The range of trips that are feasible (going UW to Ballard for instance)
      -The range of people who can participate (stations and electrification)
      -The mental barriers that exist (safety and hills) by improving the supporting bike infrastructure, which has come a long way since 2014.
      -Potential operation/pricing barriers. Look up the Santa Monica bike share if you want an example of a well run flexible option.

      I suppose weather is still a factor, but there’s not a lot of getting around the existence of winter in the US outside of Florida/the South and California.

  2. Can you direct to the links or area where you found out that DriveNow is hiring at? I’ve searched and been keeping an eye out and have found nothing.

    Per the comment above, I haven’t found parking to be an issue with car2go, especially because you find SO many of them in the outlying neighborhoods and fewer and fewer in the downtown/captiol hill core. Plus car2go’s squeeze into spots most cars can’t get into. So really, they’re filling holes that otherwise wouldn’t have been filled-because no one in this city knows how to park. But that’s another topic. :)

  3. I wonder what the dollars spent bailing out a little-used Bike Share program might be used for? Homeless relief? Driver safety improvements? Free high-visibility vests for bikers who use the streets so that drivers at night might have some chance of seeing them on a dark and rainy night? Free lights for bicyclists? Or reduced cost? There has to be something better the money can be spent on than propping up a program which the data clearly says is not working.

    • The money spent on it is to make it so it is no longer poorly used…

      Your argument is like suggesting buying takeout burgers and anti splinter sandals instead of spending money to fix up a deck. You could bandaid and avoid, or you could fix the problem.

  4. I don’t know what the data says but, I see people using Pronto all the time around Capitol Hill and Downtown. Also, regarding what Ridesharefan said above, I have to disagree. I, too, am a fan of these programs but I see them all over my neighborhood (15th) and you can always spot where one was parked by the perfectly too small parking spaces they leave behind that nobody can fit into (unless they have a smart car, of course). Just saying.

    • I see pronto used all the time DT and on the Hill too. When I see a Car2go bombing down the street I get out of the way – paying by the minute…

  5. I use pronto all the time — at least 3 times/week, just to get around the city. Used it yesterday. It fills real gaps in our transportation network.

    I’ve been involved in a number of startup businesses, and can attest that sometimes promising things don’t start off very quickly.

    Startup costs for something like this are very high, and both financially and in terms of organizational inertia; so before shutting it down, I’d want to see it really get a fair go. And relatively speaking, the dollar amounts involved are pretty small.

    Note that bike share systems are successful in other cities with much worse weather than seattle (berlin/chicago/boston) — the big variable here are the hills.

    But e-bikes are just getting going, and prices are coming down fast. So with some patience and investment, i could see it taking off here.

    1. are there spots in seattle where we could consider it a success? what’s unique about those?
    2. If it works, does it benefit the city as a whole, and not just the riders individually? How? What are those benefits worth?
    3. Has anyone surveyed pronto users – tourists and residents – to see what their satisfaction is like, and barriers?
    4. Has anyone surveyed non-users?

    Finally – although I am a big believer in social equity, I think it’s misplaced at the top of a list of priorities. Job #1 is to make the system work for *someone* – and trying to make it work for everyone right off the bad will cause its failure. Better to start with a group of real believers, and broaden from there.

  6. More money for surveys? Try looking at user numbers and cost to maintain pronto infrastructure. That info we have already.

    But yes, for pronto nirvanna, you can flattened every hill, build a dome over the city, and ban all walking, private bikes, cars, buses, streetcars and light rail and this will work to ensure pretty close to 100% pronto ridership. The exceptions are ADA transportations and emergency/commercial vehicles. Rickshaws are godawful, though with proper incentives, I’m sure we can bring those back to serve our commercial needs too.

  7. The bikes are ugly, as is the fact it is a moving billboard for Alaskan Airlines.
    You pay for a membership but you pay additional after having it out more than 30 minutes. From 30-60 minutes it cost $2. After that the fees climb to $5 every additional for 30 minutes. That is ridiculous! An annual membership should including a certain number of minutes per month or year and let people use it as they want. That people people could utilize it as they need it- some people 15 minutes 7 times a week while others may use it only a couple times a month, but for several hours each time. It would be great to use to commute or get from one part of the city to another but at some point it becomes pricier than taking a cab, then there is the $85 annual fee on top of that.

  8. My gut instinct is to let Pronto die and prioritize transportation efforts elsewhere. But I’m really curious about the numbers – costs and revenues. How close is this program to being sustainable?

  9. Do we have any more details about DriveNow yet? I keep seeing more of the BMW i3’s around, and have even noticed various Mini Coopers w/ the Floating Car Share permits / Drive Now card scanners. I’m all about more competition in the Car Sharing market and am ready for this to launch (or to be invited to help them beta test prelaunch even if that’s a thing?)!