This showed up in my reader, but not on the bike-sharing blog, so I'm just pasting it here for all to read.
A major barrier to the financial sustainability and growth of bike-share services is how we price it. The predominant method of on-going funding of bike-share services in North America is through membership and usage fees. As the program manager for Arlington, Virginia's portion of Capital Bikeshare I see in the monthly reports from the service operator that membership fees are the bulk of this revenue with usage fees being a minor amount. The warmer months can pay for themselves, but the colder months do not, which ensures this 62-station portion of the service covers about 60% of its operating costs. While good for a transit service, why can't we do better for the long-run?
Pricing structures in North America and much of the world tend to provide the first 30 minutes of every trip for free with increasing fees for additional 30-minute periods. Many bike-share services allow for redocking of one's bike and a resetting of the clock for the same trip, but on a new 30-minute period. This is the equivalent of someone touching their toe onto the platform from the subway car while stopped at a station and not having to pay for the remainder of their trip. For bike-share this is great for increasing the number of trips, albeit by double-counting some trips, but it's bad for the bike-share transit agency which is trying to cover its operating costs like any other transit service and not getting enough help from the jurisdiction, state, of Federal government.
The common bike-share pricing structure is odd as it's so different from how other established modes of transit do it. Other modes tend to have either a fee per trip or a week/month pass with unlimited ridership. Annual transit passes are rare and from a quick unscientific Google search, seem to be offered mainly by universities and by transit agencies, however, directed to employers for their employees.
What we need to try out is a new model that would allow people to use the service without needing to "join" by paying a decent sum at the on-set. There may need to be a minor fee to obtain a fob or smartcard if this is what the bike-share system uses, however, beyond that we should have in place a fee per trip model as well and charge a fee that is lower than, but relative to other modes of transit within the respective region. Changing pricing models after the public has become familiar with the existing model is risky, however, it could be introduced as a pilot and concurrently to our existing model to gain data on its uptake before any decision were to be made.
The point of this change is to bring more people into the fold as bike-share customers by taking down the barriers to do so. I likely wouldn't take the bus at all if I had to pay $100 for an unlimited service that I presently only infrequently use. We need infrequent customers on bike-share, not just the daily commuters. There are about 2 million residents in the four jurisdictions that offer Capital Bikeshare, but only about 23,000 of them are annual members. There's a lot of room to grow here even if my 98-year old grandfather doesn't plan to use bike-share.
Other benefits are that low-income individuals and the unbanked could pay as they go in smaller amounts, rather than a initial lump sum which is less affordable. Bike-share agencies could retain individuals as customers who for change of home or work or other reasons, don't find themselves using bike-share as often and would otherwise drop their membership. Also, the customers who use the service the most would pay more under the fee per trip model, which is not a bad thing as they're putting the most wear n' tear on the system.