April 2, 2012 Issue


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photo by gregory j. Scott

Mr. Nice Ride: Bill Dossett.

Gauging Nice Ride’s success

Bill Dossett reflects on Minneapolis’ first attempt at a bike-sharing

When Minneapolis’ public bike-sharing program launched last June, it was the biggest in the nation, with 700 bikes available for rental at 65 kiosks scattered throughout the city. Skeptics wondered if a city of Midwesterners would embrace a European model of transit.

Five months later, the Nice Ride team is pulling its bright neon two-wheelers off the streets for the season. The kiosks will be fully removed by Nov. 15. But they’ll be back next April, with the addition of at least six new kiosks in North Minneapolis.

In its inaugural run, the program recorded almost 100,000 trips and managed to stay in the black despite selling fewer annual subscriptions than anticipated. We sat down with Nice Ride Executive Director Bill Dossett to get his impressions of the Nice Ride experiment.

Journal: When Nice Ride launched, some worried about vandalism, theft and whether or not the organization could sell enough annual subscriptions to stay profitable. Going into this, what was your greatest concern? And has Phase I assuaged that concern?

Dossett: Well, the starting point is, are there people in Minnesota that want to ride these bikes? That’s the core fundamental. It won’t work without that. It was working in Barcelona. It was working in Paris. But those are different cities. So will it work here?

There was this feeling that Minnesotans would reject this as being un-American, or just not a good idea for our city. And we’ve gotten none of that negativity. Even if you listen to AM radio hosts, they’re saying, I can see how this would work. I think that’s a real success for us. And that’s important because people around the country are watching us. Washington D.C. and these other cities that are launching their systems are wanting to see how Minnesotans respond to this.

The evidence is very clear that it’s working really well. We’ve had 86,163 trips taken. We’re on track to get very close to 100,000 trips this year before we take the system out. So there’s a lot of demand.

What about theft? That proved to be a huge problem in Paris.

We budgeted [initially] for 10 percent of our bikes to get stolen. So 70 bikes would be missing at the end of the year. Right now, only two bikes are missing. So that’s an area of our business plan where we’re looking much better. We have not had theft, we have not had significant vandalism. The cost of keeping the bikes maintained has been lower than projected.

Were there elements of the original business plan that didn’t work out so well?

The question that’s not answered yet is, are we going to be successful in selling our primary product, which is the annual subscription. Because it’s the best way to use the system, but most people don’t know about the annual subscription. […]

Right now [as of Oct. 11], we’ve sold 1,250 annual subscriptions. That’s lower than we’d like to see.

But we expect next spring to see that number go way up. And we’ll be doing some marketing for that.

With annual subscriptions lower than anticipated, is Nice Ride in the black?

Are we in the black? The answer is yes. And there are a couple of reasons for that. In our businesses plan, it was really weighted to these annual subscriptions. But where we’ve done better is in the 24-hour subscriptions. So we’ve had over 20,000 people go up and put their credit card in and pay $5 for a 24-hour subscription. And that alone counts for 50 percent of our operation revenue.

But the other key is we use sponsor revenue to keep it going. And with that, we’ve done very well. People like Target and Dorsey & Whitney and the Birchwood Café have stepped up to sponsor a station. That has generated about a third of our operating revenue for this year.

And then the last piece is, we don’t have debt. The bike share was purchased with funds that came from a combination of private — the Blue Cross Blue Shield funds [the health insurer donated $1 million to Nice Ride, the fruits of legal settlement with tobacco companies] — and public funds [Nice Ride also received $1.75 million through a Federal Highway Administration program]. So that’s a critical component.

Have you had any complaints about the program?

The biggest complaint we’ve had has been the debit card and the security deposit that we place on the 24-hour subscriber. Systems before ours didn’t accept debit cards. Our does. We can’t stop them. So we were putting a $250 hold on peoples’ cards. That’s the same as other cities. Turns out, that was a real burden for debit card users. So we reduced that down to $50. We have also put an express notice as part of the user interface on the kiosks.

Since then, we’ve had no increase of theft. So that’s great. And also, far fewer concerns about the security deposit.

North Minneapolis has been declared a priority for Nice Ride’s Phase II expansion. Are there any other expansion plans for the near future?

There are two pieces here. One is we are already committed to and have the funds to do a small expansion into North Minneapolis. So that’s definite. It will happen.

[Nice Ride has been given $228,500 via a Communities Putting Prevention to Work grant from the City of Minneapolis’s Department of Health and Family Services.]

Then there’s another much bigger project going on to raise the funds and identify a major expansion. From the beginning, our goal was to start with the central core of Minneapolis and expand from that. The area that we’re looking at — and none of this is committed — is all the neighborhoods around: Northeast, South, Southwest, then we go to downtown St. Paul. Then we go to the areas in between.

One other thing I’d like to mention is the Low Income Outreach. Next year, we really want to reach out to low-income people and give them the same access to bikes that other people have. ... So we’re trying to reach out through community-based groups to give people an opportunity to try Nice Ride. And then give people a discount. So we’ll be doing a lot of that in April.

Nice Ride by the Numbers

Total trips

Total annual subscribers

Bikes missing

Operation revenue from 24-hour subscriptions

Operation revenue from long-trip fees (over 30 minutes)

Operation revenue from annual subscriptions

— Numbers as of Oct.11

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