Belfast City Councillors will vote tomorrow on reducing the “free” first 30 minutes of Coca-Cola Zero Belfast Bikes journeys to just 15 minutes, fundamentally altering the nature of the popular and successful public cycle hire scheme. Will this move to squeeze more revenue from users, and make the scheme less attractive, depress membership levels and push the scheme into a death spiral?
Coca-Cola Zero Belfast Bikes has been running since April 2015, with an initial 300 bikes available at 30 stations rising to 400 bikes at 40 stations by the end of 2016. This early expansion was driven by a combination of a high level of usage and the involvement of public and private funding to add new stations.
In a straight comparison with Glasgow’s larger scheme, Belfast Bikes performance has been remarkable.
— NI Greenways (@nigreenways) September 30, 2015
But as Glasgow looks to move to a rapid expansion on the back of more modest usage, Belfast may be about to hamstring its scheme in an attempt to save money.
It’s understood a report has been prepared for the Council’s Strategic Policy and Resource Committee which sets out options to claw back the running costs of the scheme. A report by the Belfast Telegraph in September last year described the award-winning scheme as operating at a “huge financial loss”, a “shortfall that may have to be made up by the city’s ratepayers”.
The article in the Tele was full of language which would lead you to believe the system would be running at profit but for naughty cyclists exploiting loopholes and taking money right out of ratepayers’ pockets:
“We need to keep reviewing the bike scheme,” admitted Ulster Unionist councillor Sonia Copeland. “We are trying our best as a council to get as many people as possible cycling, and we need to see how we can get more people to use bikes, but the scheme must be financially viable.
“What’s happening at the minute is that people are taking a bike for 30 minutes, then putting it back and taking another one, so they never pay for its usage. We need to look at the viability of that. If we all agree on a way forward, perhaps we could recoup something before the end of the financial year (March 2017).”
(Belfast Telegraph 29th September 2016)
What we don’t have is the context of the figures involved – or indeed the exact ongoing financial figures to hand. Public bike hire systems around the world are subsidised systems – they necessarily run at a deficit. Belfast City Council know this, planned this, but the current membership and revenue figures are understood to be below projections.
— Brendan Harkin | Breandán Ó hEarcáin (@brendanjharkin) January 19, 2017
The option under closest scrutiny appear to be a proposal to remove the “loophole” in the scheme where users get the first 30 minutes of any rental free. This is the same loophole which exists in almost every other membership-based public bike hire system in the world, with 30 minutes being the standard (London, Paris, Dublin, New York, Barcelona..) rising to 60 mins (Hangzhou in China, the world’s biggest scheme) to as much as 2 hours (Marathon in Greece).
— Nathan Stewart (@nathanjstewart) January 19, 2017
I’ve tried to find a scheme which works on a 15 minute basis, but haven’t managed it so far – is Belfast about to try a world-first in reduced service?
— NI Greenways (@nigreenways) January 18, 2017
Alliance Councillor Michael Long raised the issue in public this week claiming that Alliance were the only party who will attempt to keep the “free” 30 minute window in place. In discussions with other parties’ representatives ahead of tomorrow’s vote it appears that many actually oppose this change – but we await the outcome of the vote. Any change would need to be ratified by the full Council on 1st February.
— Ciaran McNally (@ciaranmcnally) January 19, 2017
If there really is a shortfall in revenue then we need time to look at positive measures, with a focus on the primary goal of Belfast Bikes – increasing membership and usage.
What are some of the other options for revenue raising? There are over 300 public bike hire systems around the world offering a wide range of learning and options for pricing models and extra revenue. Stakeholder groups such as Sustrans, Cycling UK, Cyclist.ie and Bikefast can bring expertise to bear – if given the chance. Off the top of our heads:
If councillors are so concerned about citizens and visitors getting a free ride at the expense of ratepayers, reworking the hire model to pay-as-you-go is a reasonable option to investigate. Some systems around the world only offer a flat daily hire rate. While this may seem fairer, it will still require a subsidy, and things like extended periods of bad weather can affect income vs an annual membership model. It’s fair to say a change of this kind this is a longer-term option, and is likely to have been considered in the original Belfast Bikes business case.
Raise the annual membership rate
This is another option to be considered with caution. Glasgow’s less used scheme (also operated by Nextbike) charges £60 for an annual membership – three times the level of Belfast and Dublin, and approaching the price of a basic bicycle. A minor increase may be a short term fix to the revenue shortfall, but has enough research been done to identify the level at which membership becomes less attractive to the widest possible customer base? And a strength of the scheme is the current access for the more deprived inner city areas – why begin to price out those who could benefit most from cheap city transport?
Nextbike to allow corporate memberships
Time and again from the start of the scheme companies in the city have expressed interest in paying for a central corporate Belfast Bikes account. For a large, but discounted, annual fee, companies could provide Belfast Bikes memberships to their staff as a employee benefit. This would drive both revenue and overall usage, and expand the user base and visibility of the scheme. It’s understood this currently isn’t possible, but should be urgently investigated.
Bulk targeting of city visitors
Working with the growing tourism sectors to leverage usage of Belfast Bikes is another no-brainer. From installing a large use-as-needed Belfast Bikes station by the cruise ship terminal, and partnering with operators to offer deals to passengers, to the Waterfront Conference Centre paying Belfast Bikes to add a package for delegate access to the scheme to their offering, there are plenty of innovative options if Nextbike can integrate into their system.
Belfast Bikes as a stocking-filler
One thing missing from the Belfast Bikes offering is a voucher card. With annual membership still just £20, making a gift card for this amount available to buy would help to raise revenue at Christmas and through the year as an easy gift option. This is practically free money, but not currently exploited.
Coca-Cola Zero’s contract for advertising will be up for renewal next year. An expanded scheme should be attracting more than the roughly £100k a year currently paid to date. The council should be currently assessing options to improve the advertising offering, and whether additional station-based sponsorship could be weaved into the system as another revenue stream.
Confidently expand the system
Yes, this may seem like a strange cost-cutting suggestion, but bear with me. The footprint of the initial scheme was almost exclusively in the inner city, which (if you know Belfast) hardly anyone lives in. Commuting use (and therefore commuting-focused membership) is almost non-existent. Expanding the scheme into the heartland of cycling in the city – South Belfast, with its parks and towpaths – would instantly attract many more subscribers and start a bicycle commuting revolution in the city.
if network expanded to Ormeau I bet there would be an overnight increase in users
— The Nordic Nordie (@pinkpeugeot) January 19, 2017
While every station has a captial and revenue cost, the overall scheme deficit (AKA subisdy) will only be reduced by attracting more users.
Seek subsidy from external bodies
If Belfast Bikes expands into a more commuter-led model, that will remove cars from the roads during peak hours. It stands to reason that the Department for Infrastructure (already so generous in providing capital to kick off the scheme) could feed in a per-journey subsidy for peak hours as a way to reward sustainable travel. While not a fortune, it could certainly help, and would send the right signal about government commitment to improving our transport infrastructure. Naturally if other towns and cities replicate the Belfast Bikes scheme, this should be applied across the board. The question of health benefits also raises the potential for a per-journey subsidy from the Department for Health or Public Health Agency.
These are longer term strategic questions for transport and health policy- and if it sounds daft, subsidising travel by bicycle is being trialled on the continent. Belfast could be a test bed for a slightly different, but still beneficial model.
I can't make it to work in that time on the bike. I'll be back to driving/using the bus.
— Paul McBride (@ThePaulMcBride) January 18, 2017
This only scratches the surface of the positive, member-and-revenue-attracting options open to the Council to support Belfast Bikes. No doubt Council officers who designed and operate the scheme will have these and many other ideas, and trialled solutions, to hand – but we seem to be set upon a harshly political decision of a top-slice off a fragile service.
Today I went to a shop & "exploited a loophole" by giving them money & receiving goods in return. #Doyourworst 😈
— Angela Wallace (@AngelaJWallace) January 18, 2017
The swiftness of this situation – we only learned of the problem on Wednesday and the vote is on Friday – means stakeholders have been shut out from the process.
I probably won't renew my sub if that's the case. Most of my journey times are within that but still shit idea
— James Love (@james__love) January 18, 2017
Active travel charity Sustrans is similarly concerned about the current rush towards a change in the scheme:
“The Belfast Bike Share Scheme has been one of the biggest boosts to cycling in the city. It is such a visible feature of Belfast’s support for active travel and has helped transform the image of cycling as being only for lycra-clad sporty people.
Since the scheme was launched in April 2015, the number of bikes and docking stations has expanded including at three hospital sites in Belfast so there are now 400 bikes and 40 docking stations.
Bike Share Schemes around the world don’t tend to make money but rather are an alternative mode of public transport, generally subsidised by government.
— NI Greenways (@nigreenways) September 29, 2016
The reason for this is they are a vital investment in reducing urban congestion, improving air quality and public health by offering people another means of getting about the city.
Contrary to the Belfast Telegraph article (Thursday January 19) there is no loophole in the scheme nor is there a pay-as-you-go option as reported.
The scheme is members-only where you pay a £20 annual subscription (or £5 casual subscription, geared more towards tourists). The first half hour journey is free, after that you pay 50p for every half hour. The first half hour free is an incentive to become a member rather than a loophole. To reduce it, as was discussed at Belfast City Council’s Strategic Policy and Resources Committee, could result in losing members and not attracting additional users. Alliance Councillor Michael Long has objected to reducing the incentive to just 15 minutes, saying this would amount to a paltry saving of just £15,000.
consider in 2013/14 council subsidised each visit to a leisure centre to the tune of £4.88, @BelfastBikes is v cheap
— NI Greenways (@nigreenways) January 19, 2017
What hasn’t been factored in, is that it would cost a lot of money to update the docking stations. Therefore Sustrans believes this move would be counter-productive and not cost-saving in the end.
The Council should be looking to get more funding from a cross-section of bodies who benefit from the scheme such as the Department for Infrastructure, Public Health Agency and private sector such as businesses who want to attract people into the city.
It is clear that in the short lifespan of the Belfast Bike Share Scheme it has increased active travel around the city for a wide range of people but particularly commuters, made the city more liveable and given it a more continental European-feel.”
Let’s hope the Council are not left embarrassed by a decision which undermines its own success in a city which is just beginning to embed the bicycle into everyday life.
— John Mulgrew (@newsmulg) January 19, 2017