Friday, November 9, 2007

Free it may be, but is it cheap?

An article in BusinessWeek discusses the success of the bike-sharing concept and where it's been catching on. The author also discusses who provides the service. Bike-sharing is presently dominated by two companies - JCDecaux and Clear Channel Adshel. They have brought bike-sharing to the forefront with success, and for this they should be commended. However, BusinessWeek contends that localities which contract for advertising on public property and get bike-sharing as a "bonus" are really paying for the service.


The article suggests:

"Would it not be a better deal for a city simply to sell its advertising rights for money, and to the highest bidder? With the revenue it could then pay for a bike rental service or any other programs -- and in the end, if possible, have a tidy sum left over. When it comes to package deals like this one, that suspicion always lingers."

The dissection of the two is happening. In Barcelona, JCDecaux provides the advertising while Clear Channel Adshel provides bike-sharing. The same split is happening in Hamburg too where the city will "hold a separate tender process for a bike rental scheme at the beginning of next year."

5 comments:

Joe said...

Please have a look at page 68 on the document you point "Vélo’v: a Personal Mobility Service (in French)".

I know, it's french in the text but will give you some clues of why french cities globally make the choice "Bike vs Advertisment"

Also, Toulouse will be the next French city to go by the JCDecaux bike sharing system, but this time, it wont be "bike vs advertising". So let's wait and see how much in this case it cost to city's citizen ...

Zakkaliciousness said...

The original bike-sharing concept from Copenhagen had some financial support from the city when it started back in the mid-90's.

But sponsorship soon took over and it is self-sufficient now.

Interestingly, all the repairs that can't be made by the four mobile workshops are made by rehabilitating prisoners at a prison.

For more info see this post at the copenhagen bike culture blog.

Clayton said...

JCDecaux provides a turn-key solution: a willing operator and a willing financer all in one package. Politically it's probably easier to sell too: it looks like JCD is funding the project, rather than the taxpayers.

But I agree -- I bet the ad revenue far exceeds the cost of the bike system, which means the City could finance the bike system using ad revenue as collateral, and have money left over.

Either way, the city is putting up big bucks for bikes. That's pretty cool!

Anonymous said...

I'd say a government shouldn't be run identically like a business. Ad revenues aren't certain and neither is successful bike sharing. Promoting advertising AND bicycling are both social benefits. Doing it in a way that enhances both and doesn't require city employees to be experts in bikes or ad marketing seems like a good tradeoff to me.

The contracts for sharing have term limits and are renegotiated when they end when experience has been gained.

Chana said...

Interesting to know.