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The Case for Government Cooperation: Capital Bikeshare

Federal, State, and Local Governments Working Together When the Private Sector Falls Short

As Ira Koretsky shared in his blog post today, Bike to Work Day was May 17th. In the post, he noted that the event attracted a record-breaking number of participants with over 14,500 registered riders from the greater Washington Area. That’s about 2,000 more riders than last year. What many of you may not know is that the DC metropolitan area is particularly unique in the opportunities offered to cyclists, specifically Capital Bikeshare.

In August 2008, DC and Clear Channel Outdoor joined together in a public-private partnership and debuted the first bikesharing serve of its kind in North America, known as SmartBike DC. It consisted of 10 stations with 120 bikes. In July 2011, SmartBike DC failed to expand beyond the pilot program, due to financial constraints and poor management, and ceased operations. However, citizens still wanted an easy, economical way to bicycle around the city and city officials wanted to relieve traffic and encourage environmental, health friendly policies.

Enter government cooperation! City leaders in DC, Arlington, and Alexandria came together to establish Capital Bikeshare. The leaders pooled financing from a variety of sources, mainly Virginia Department of Rail, Arlington County, Crystal City BID, DC government, and Federal Highway Administration, to accomplish this mission. They established 100 stations in DC and 14 in Arlington. Currently, it is the largest bikeshare program in the U.S. with over 1,800 bikes and 200 stations in DC, Arlington, and Alexandria. In 2013, the program is expanding to Montgomery County.

To me, this is one of the best examples of federal, state, and local governments working together to solve a problem after the private sector falls short in meeting citizen needs. Unlike many other bikeshare programs in the U.S., Capital Bikeshare is not sponsored by a private organization and is funded jointly by user fees and the public sector. The DC Department of Transportation, Arlington County Commuter Services, and Alexandria Department of Transportation of Environmental Services work together to oversee the program’s administration, while a private firm, Alta, manages day-to-day operations. Through administrative and financial cooperation, public leaders have created a program modeled by many cities throughout the country, including New York City and Chicago.

What do you think?

Is Capital Bikeshare a good example of government cooperation?

What are some other policies and programs that represent effective government cooperation?

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Peter Sperry

While I generally like bike share progams, their operational costs should not be funded with tax dollars or user fees collected for other purposes such as rail or road. Whenever possible, services should be paid for by those recieving the benefits. Only truly public goods should be billed to the community as a whole. A weak case may be made is a very few cases for providing public “seed” money for capital costs needed to start a project. Means tested programs providing basic services needed to meet the first tier of Maslow’s heigherarchy are also appropriate condidates for tax based community support. But service programs benefiting people above (often well above) poverty income levels should either cover their ongoing operational costs 100% with user fees or cease operation.

Pam Broviak

I like the idea of government agencies cooperating. This helps improve projects not only through the ability to pool funding but also by combining talent and resources.

The question of whether or not to subsidize bike transportation with public funds is a good one to debate. Many believe as Peter said that bike infrastructure should not be paid for with public tax dollars or fees collected by non-bike users. However, there are examples of our country subsidizing other facilities with funds collected from other sources. We subsidize the railroads and have since their beginning. Government also builds sidewalks and other pedestrian facilities yet they pay even less than bikers. And we subsidize non-transportation facilities like swimming pools and other recreational facilities. This usually happens because of the reasons you point out – citizens want it yet it can’t be sustained solely through user fees. Or perhaps the government believes the benefits the public receives from those facilities is worth the public cost. Such as a healthier population.

David B. Grinberg

One may argue about the micro details, however, let’s focus on the macro result = federal, state and local governments positively interacting in a beneficial manner for the public. That’s the bottom line.

While I haven’t personally participated in this event, it nonetheless sounds like a rare and exceptional public sector partnership. Kudos to all those who made it happen.

Andrew Krzmarzick

@Peter – I used Capital Bikeshare this past weekend for the first time…and I definitely had to pay. In fact, I felt it was a bit steep: $7 for a daily pass, then you had to pay for time over 30 minutes after that. That pricing actually seemed a bit prohibitive for regular use for me…but it’s definitely as you describe – that’s it’s not cost effective for people who have less means. Riding the bus is cheaper.

Peter Sperry

@Andrew — You had a real world lesson in the problem of using public funds to supply private goods (a common question in public policy analysis). You paid $7 dollars for a service that may have cost $9-$11 to deliver with the difference being subsidized by tax revenue or user fees paid by people who recived no similar service. Best case is that enough people use the service, and/or find some unmeasurable benefit in making it available to others, to allow for continued funding without too many people feeling they are being treated unfairly (good example would be popular public support for National Parks). Worst case is large numbers of people who can barely make the rent after payroll deductions end up paying more taxes and increased metro fares while gazing out the window thinking how nice it would be to bike to work if only they could afford the $7 per day (and not even realizing they are helping to pay for someone elses ride.)

Bandar El-Eita

@Peter – Do you think this might lead to a shortsighted ROI calculation though? The return on the investment can mean: lower healthcare costs, lower WMATA costs, lower wasted revenue due to traffic gridlock (A huge problem in the metro area, we have some of the worst gridlock and the most expensive hourly wages the impact is staggering), higher influx of tourists or people moving into these areas because bikeshare adds convenience, etc. The truth of the matter is when government invests in things the ROI can’t simply be measured by the dollars and cents that you pointed out, it has to be the responsibility of better government to see both the short and long term costs and benefits.

To put it another way, Fire Departments use to be privatized groups in which a medallion would need to be purchased for fire protection, if they showed up to a fire and there was no medallion they would let the structure burn. Governments stepped in because the cost of this sort of enterprise system was too high. Should we not subsidize putting out a house fire if the house owner is delinquent on their taxes? Of course we should.

@Andrew – You paid the tourist rate, there are a variety of passes at different price points, including a $75 yearly fee that give you unlimited 30 minute rides.

Samantha Holquist

Capital Bikeshare just released their 2013 survey today that all of you may find interesting! According to the survey, users are less likely to use a car or other forms of transit, save some $800 per year on personal travel, and even feel healthier than they used to.

Pam Broviak

@Samantha – thanks so much for sharing that link to the survey. While there is a lot of bike related info out there, it’s not always easy to find statistics like that to back up decisions and performance. So having access to this is really useful.

Stuart Heiser, MPP

Capital Bikeshare’s related Member Health Survey (available at the same link) was researched by MPA and MPP students at George Washington University, as part of their capstone project!