Michael Sargent with the Heritage Foundation's Daily Signal has a post about Capital Bikeshare arguing that the program's big losses show why government shouldn't fund "bikeshares." Allow me to respond.
Before we even get into it, can I point out that the "Big Losses" on roads would, by this logic, also show that governments shouldn't fund "Bikeshares". If people think that government shouldn't support transportation unless it can be fully paid for by user fees, then that is both in direct conflict with what the founders believe and means that there will basically be no transportation.
Showering federal money on the latest fashionable project is second nature for some members of Congress. The newest example comes with a program that looks to classify bikeshare programs as public transit.
The Bikeshare Transit Act, introduced by Reps. Earl Blumenauer, D-Ore., and Vern Buchanan, R-Fla., would make bike sharing programs eligible for continuous funding out of the transit account of the Highway Trust Fund providing these programs with a permanent federal funding stream.
Well, no. It makes bikeshare eligible for funding under the "Associated Transit Improvement" and "Congestion Mitigation and Air Quality" programs. The first does come out of the transit account but the latter from the Federal-Aid Highway Program. The entire ATI programs is limited to 1% of the FTA money and CMAQ is about 8.5% of highway money, which is hardly showering. There is nothing in the bill about "continuous" funding, though it is possible, if local governments choose to do so.
The expansion of federal funding into local matters is not unprecedented.
There's no expansion here. This money was already going to local governments to spend as they wish, within certain constraints. This law just removing some of these constraints (explicitly, many believe that this is already allowed).
Congress has been diverting federal gas tax dollars—originally intended for the interstate highway system—to distinctly non-federal concerns like local transit, beautification efforts, and bike paths for some time.
We can disagree as to whether a local road or highway interchange isn't distinctly local but an interstate transit system like Metro, an interstate bike trail like the Mount Vernon Trail or an interstate bikeshare program like Capital Bikeshare is.
Also, from the comments there, "The Federal gas tax was part of the Revenue Act of 1932 so to say it was "originally intended for the interstate highway system" which wasn't authorized until 1956 seems far fetched."
While bikeshare can be a fun, healthy, and quick way to get around, its status as a veritable, cost-effective transportation service that requires federal tax dollars over local sponsorship deserves real scrutiny.
I don't even know what this means. Is it cost-effective? Why is there a comma after veritable [English teachers, please weigh in]?
Capital Bikeshare riders traversed over 6.4 million miles in 2014—a blip compared to the nearly 2 billion passenger-miles traveled on D.C.’s rail and bus transit services. This huge disparity calls into question bikeshare’s value as a real mode of transit versus a desirable amenity.
Use is a blip compared to other modes, but so is it's cost when compared to them. What's relevant to the question about it's value as a real mode of transit is cost-to-benefit which is how most people define value but which is never mentioned by Sargent.
Within its primary market of D.C., Capital Bikeshare covers only 70 percent of its operating costs, meaning it loses 30 cents on the dollar. While this may be a high ratio for transit services (which is not saying much)
It's also a high ratio for roads, which cover about 0% of operating costs via user fees.
D.C.’s Capital Bikeshare lost $1.7 million on 2014 operations.
The bottom line is that D.C. taxpayers must fork over 65 cents every time someone hops on a Bikeshare bike.
Actually it's the same taxpayer - and he's pissed. Really though he's conflating the whole system with just the part in DC. DC's system makes money or breaks even on operations, so DC taxpayers probably pay nothing.
the real costs are actually much greater: Operating costs do not include the capital expenses of the bikes themselves, nor the expensive docks that must be built and connected to the city’s power grid.
Michael, you're an idiot. They're solar powered. But true that operating costs and capital costs are different.
This means that Capital Bikeshare would never be able to cover its full costs without drastically increasing rider fees.
True (although they could add more advertising I suppose)...but relevant?
Yet even its operating costs do not compare favorably to existing modes of transit. Bikeshare’s operating costs per passenger-mile exceed those of D.C. Metrorail by some 55 percent
Why is "per passenger mile" the right metric? [And since CaBi uses "as the bird flies" they under-report passenger miles, making this fact unknowable].
Because employees’ primary jobs are to repair and reshuffle bikes across the system, expanding Bikeshare using federal money would undoubtedly increase these costs.
Well yes. Contractually, the operators fee is based on the number of docks. So that's a mathmatical fact. But there would likely be network effects and economies of scale that could lead to a lower per-trip subsidy, no? Also, expanding bikeshare with money we found in the Mayor's sofa would also increase operating costs.
These cost metrics are important because a continuous stream of federal funding provides entities with little incentive to control operating costs.
Perhaps, but not in this case. This would be money that DC would be allowed to use for many things. Spending it on CaBi means not being able to spend it on those things. So, that's the incentive.
“Free money” from the federal government would lead only to permanent dependency on federal funding and the corresponding reduction in responsiveness and service that comes with it.
Yeah US Military, I keep asking you to invade Belgium and you keep not doing it. Your service sucks (Thank you for your service, BTW).
This draws a sharp contrast to having the parties that benefit from bikeshare bear the costs of the system.
You mean, like taxpayers?
Then there’s the issue of who would actually gain from more taxpayer subsidies going to bikesharing.
Great question. how about: users of the system, people who breath air, people who care about public health, people who live in low-lying areas, people who like safer streets etc...
In Capital Bikeshare’s case, the answer is affluent white professionals.
Your answer is different than mine.
Capital Bikeshare’s own survey found that the average household income of its member in D.C. was $100,000 in 2014, well above the average of $65,000 for D.C. as a whole.
Oh, I see. You're ignoring the positive externalities and the fact that not all members are white, affluent or professionals. You can get the most wonderful answers when you ignore facts.
Fewer than two in 10 Capital Bikeshare riders had household income of $50,000 or less—roughly the nation’s median household income
That would be relevant if CaBi stretched out to Iowa, but DC's median income is $65,000 (as noted above) and the region's is $90,000, meaning the average CaBi user is only slightly wealthier than the average DC-area resident. Also, so what?
Rather than subsidize a hipster nicety, wouldn’t it make more sense to prioritize mobility for low-income households, who overwhelmingly rely on cars and bus service?
So Heritage supports more funding of bus service? But to answer the question - if providing mobility to the poor was the only goal then maybe. But it isn't, so the question is stupid.
there is not a compelling reason why the federal government should be involved in funding them at all.
The federal government has a role in funding transportation.
given mass transit’s poor performance across the country—in part caused by federal subsidies—why would bikeshare proponents want to emulate that model?
I don't know how the claim that transit's poor performance (which Sargent just advocating putting more money into), if it is real, can be shown to be caused by federal subsidies, but bikeshare is not emulating that model.
Even more ironically, putting bikesharing on the federal dole will make riders dependent on the gas tax, placing car-averse cyclists and smart-growthers in the awkward position of needing more gas-guzzlers on the road to pay for their bikesharing systems.
Oh yes. Whatever shall we do without cars and gasoline use? This doesn't place supporters in the position of needing more gas guzzlers, if things get tough we can just raise the gas tax. And redirecting money that would have been spent on cars towards bikes is not awkward at all.
Instead, why not emulate New York City’s Citi bike program, which is funded by private capital and sponsorships? Alternatively, local businesses and developers could band together and cover the costs of bikeshare systems that make their location more attractive.
How's that working for them so far? CaBi does have sponsorships. Heritage is even building a station. And they do sell ads. But that's not "free". It's trading public space (and advertising within it) for money and then choosing to spend that money (which is fungible) on bikeshare. Bikeharing still isn't profitable with all of that. And certainly not enough to attract private capital - at least not to a system to serves all parts of the city. But that's Ok, because of other positive externalities that private capital doesn't care about.
For environmentally minded urbanists, a local, market-based approach seems far more desirable than lining up at the trough of gasoline money funneled through the federal labyrinth.
From an environmental standpoint it probably makes little difference, but taking gas money away from more harmful uses probably helps.