Wheels turning slowly on Providence bike share

Bike share isn’t easy.
There’s community hostility to worry about – from drivers, anti-gentrification activists and even neighbors who don’t like a system’s chosen color – plus numerous technical land mines and the challenge of staying solvent.
In the past year Montreal bike-share pioneer Bixi has filed for bankruptcy and New York City’s popular Citi Bike system has reportedly run into serious financial distress.
So Alta Bicycle Share, the Oregon company chosen to launch bike share in Providence, is moving carefully and deliberately to piece together the first such system in Rhode Island.
After initially hoping Providence bike share could debut this year, city officials have confirmed that the spring of 2015 is now a more likely time frame. Selected over two other bidders to run the Providence system late last fall, Alta has spent the past three and a half months laying the groundwork for a crucial element of almost any contemporary bike-share system: finding a corporate sponsor to bankroll operations.
Alta has hired Nail Communications Inc. of Providence to seek out and pitch potential sponsors on the benefits of supporting a city bike-share system.
It’s been a meticulous process, with Nail compiling data, seeking out corporate contacts and tailoring its pitch to different industries.
The firm doesn’t expect to begin actually pitching companies until May, with an eye toward collecting the best offers in June.
“We will be providing some reference points of what it is worth in media terms to their brands and contrasting that with other cities,” said Nail Managing Partner Jeremy Crisp. “Then they can put in a bid they think is fair. Our anticipation is we will see a number of solid bids and then take time to try to maximize their value for the city.”
Bike sharing is one of the strategies for achieving Mayor Angel Taveras’ transportation goal for the Sustainable Providence Plan, says Sheila Dormody, the city’s director of sustainability. The plan focuses on environmental sustainability goals for energy, food, water, waste, land use and development, and transportation. “When the bike share gets going, residents, commuters and visitors will be able to feel confident about taking public transportation into the city and still have an environmentally friendly and reliable way to get around without needing to own or rent a car,” Dormody said in an email.
Once a potential sponsor is selected, they will be involved in negotiations with the city and Alta over exactly how the system will be financed and structured.
According to Alta’s winning proposal submitted to the city last October, the initial Providence bike-share system with 20 stations and 200 bicycles will cost about $880,000 to launch, with just under $500,000 of that in equipment expenses.
While Crisp said only Alta could say precisely how much it needs in sponsorship to launch the system, he acknowledged that these upfront costs would likely be the bare minimum.
Alta, which did not immediately return calls for comment, estimated in its bid that over five years its system would generate $1 million in sponsorship revenue and $1.67 million in revenue from users.
The company projected that in year five the system would have 130,000 users, including annual members and “casual” daily users, with 356 trips taken in the city in the average day.
It will take six months to get up and running once the sponsor is signed, Alta said.
So why would a company choose to sponsor a bike-share system in Providence?
“You’d be crazy not to do it,” Crisp said about his pitch to potential sponsors. “Of course it’s different for different businesses. If you picked someone like Textron or GTECH that’s not consumer-facing, the benefit would be good citizenship supporting the city. For a health insurer, it would be supporting healthy living.”
Providence Director of Policy Toby Shepherd, who is leaving his city job next week for a position as grant-programs coordinator with the Rhode Island Foundation, says Alta has been driving the timeline. Alta, whose planning arm produced the city bike-share feasibility study that set the stage for Providence bike share, is now the dominant bike-share operator in the country, running the systems in New York, Chicago and Boston.
Boston’s system, called Hubway, kicked off its 2014 season with 10 new stations. Hubway provides more than 1,300 bikes at 140 stations throughout Boston, Brookline, Cambridge and Somerville. (Part of the system in Cambridge operates all year.)
Like the Providence system, the Alta bike-share system in its hometown of Portland, Ore., has also been recently delayed a year to 2015.
Should it find a suitable sponsor, Alta’s plan calls for a Providence system to be deployed in two phases, starting with 20 new stations and 200 bicycles and doubling to 40 stations and 400 bicycles.
The first phase would concentrate on a 1.4-mile core area including downtown, College Hill, the Capital Center, hospital complex and Federal Hill.
The second phase would spread stations out to neighborhoods that include Elmhurst, the Valley, South Providence, Fox Point and Mount Hope.
Finding a sponsor for the Providence bike-share system is critical because the city is not contributing any public funds and hopes to eventually generate revenue from it.
Including sponsorship revenue, Alta’s bid predicts the system will be profitable in its second full year of operation.
Once the system begins producing $2,550 per bicycle, which would be $510,000 at 200 bicycles or $1.02 million at 400 bicycles, Alta proposes splitting half the additional revenue with the city.
At City Hall, Shepherd said there is no hard deadline for finding a sponsor and the mayor’s office intends to work with Alta and Nail to make sure Providence bike share happens.
“We are very optimistic of seeing a lot of success and bringing a great bike-share program here,” said Shepherd. •

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