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Wednesday May 23, 2018
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A row of ArborBikes

Bike Share Shakeup

Where are ArborBikes?

by Patrick Dunn

From the May, 2018 issue

The sturdy blue bikes normally reappear around the end of April. This year, though, they're still parked in a local storage facility. Meanwhile, supporters are scrambling to find a business model that will enable the system to survive in a rapidly changing market.

The local Clean Energy Coalition launched ArborBike in 2014 with a $600,000 federal grant to build the system and $600,000 from the U-M to underwrite operating costs for three years. But as it came time to kick off ArborBike's fourth full season, CEC executive director Sean Reed says, it became clear that no single sponsor was going to replace the U. Amassing multiple smaller sponsorships would have required hiring a fundraiser, which wasn't feasible for the small nonprofit.

Ultimately, Reed says, "the buck stopped with me in terms of our organizational capacity to pull this off," and CEC withdrew from managing the system. The Ann Arbor Area Transportation Authority is now preparing a request for proposals from potential new operators.

AAATA business services manager Chris Simmons says ArborBike can cover its $250,000 annual baseline budget this year with contributions from founding partners AAATA, U-M, and the city, plus $50,000 from the Downtown Development Authority. Longer term, Simmons says, the goal is for a system that's "self-supporting on user fees and other marketing efforts."

AAATA hopes that a new operator will bring national--perhaps even international--expertise. As community relations manager Mary Stasiak notes, there have been "some real major advances in operating bike-share services" since ArborBike launched.

In the last few years, bike sharing has become a global business. Led by Chinese companies Ofo and Mobike, new players are moving aggressively into the U.S. with "dockless" systems. Unlocked using a mobile app and left anywhere, they're rendering stationary dock-style systems like ArborBike's obsolete.

"Over the course of the past year, I have been contacted by most every dockless bike-share company currently operating in the U.S.," Reed says. Simmons says the ArborBike partners hope to see a system that combines

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those companies' "outside expert analysis" with "our local connections and our local expertise."

Reed says a new operator that added dockless bikes to ArborBike's existing stations would be "exciting," but it may not square with the new players' business model. The dockless systems, he says, are "very lean operationally and administratively ... I don't believe they see a significant need for highly involved local partnerships. It's largely an 'if you place it on the sidewalk, they will ride' type of platform."

And new players might not find ArborBike all that attractive. "The ArborBike program, although effective, did not find a way to be financially self-sustaining," notes city transportation manager Eli Cooper. The number of rides slumped from 17,691 in 2016 to 13,260 in 2017--a decline Reed blames on a software glitch that caused some stations to repeatedly shut down.

Though ArborBike has a license to place its docks in the public right-of-way, Cooper says, that wouldn't "preclude any other vendor from coming in." But a dockless system would face logistical challenges, notably the difficulty of "balancing" bike inventory across town.

While ArborBike users frequently rode from North Campus to Central Campus or downtown, Cooper says, very few were "willing to pedal them back up the hill." ArborBike trucked the bikes back to campus.

Dockless companies have largely ignored the balancing problem, leaving drifts of abandoned bikes in Chinese cities. Cooper says Ann Arbor already has begun "preliminary investigations" into developing a "regulatory regime" for any dockless systems that come here, primarily in the interest of preventing that kind of public nuisance.

Simmons and Stasiak, meanwhile, remain optimistic about ArborBike's future. They say they expect to have bikes on the streets by mid- to late summer for a shortened season.    (end of article)


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