DecoBike Currently Costs Miami Beach Money, But City Is on Pace To Break Even

Categories: Bike Blog

DecoBikeRow.jpg
Michael E. Miller
Two weeks ago, we wrote about how DecoBike was not turning out to be the win-win we were once promised. Despite extraordinary success for the bike share, a revised deal between DecoBike and Miami Beach meant that the city was only getting half the revenue originally agreed upon.

Our article stirred up a lot of anger -- not at politicians for cutting bad deals or entrepreneurs for false promises, but at New Times. "Decobike piece is way off the mark," tweeted Craig Chester from Miami Urbanist. "Every other bike share in US besides NYC is subsidized by taxpayers. The fact DecoBike pays out to cities is remarkable."

So we crunched the numbers. What we found was that Miami Beach is, in fact, subsidizing its bike share program.

See also: DecoBike Is Booming, but Taxpayers Are Getting Stiffed

When DecoBike first approached Miami Beach about establishing a bike share program, the company projected the city would make between $1.9 to 3.4 million over five years.

DecoBike, on the other hand, estimated it could make anywhere from $836,000 to $9.6 million over that same time period, depending on the program's success.

The agreement seemed to working as planned when, in September 2013, DecoBike was set to pay the city $388,687 -- roughly the minimum amount promised under the original deal.

But DecoBike complained that it's $3 million in yearly revenue wasn't enough to make a healthy profit after paying off expenses. So the company cut a second, better deal with the city.

Under the revised deal, DecoBike only paid Miami Beach $190,205 for 2012-13.

Still sounds like a nice return for a bike share program, right? After all, if D.C. and NYC are subsidizing their programs, why bitch about making $190,205 per year?

The problem with that argument is that it ignores the true cost of the bike share program. We asked the city for statistics on the parking spaces used by DecoBike kiosks.

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14 comments
jdomar
jdomar

You've already made the winning argument against your main point in the article (in other words, the article contains circular reasoning): "The good news is that under the new deal, DecoBike will pay Miami Beach an increasing amount over the next six years. By 2020, the city will have recouped its $2 million parking subsidy. At that point, DecoBike will truly be paying for itself."

If I may, New Times should continue its focus on corrupt tow practices in Miami Beach rather than wasting time on DecoBike merely because the deal that was struck was not perfect. What was the alternative? The " perfectly fair" deal New Times proposes that this private company may have rejected?

Ka_Roger
Ka_Roger

look at the bigger picture -   Having something unique and both local & tourist friendly - has a certain value that is hard to quantify -  The true value could easily justify the loss on the meters and probably pays the difference in other ways.  If Decobike fails to maintain or pay their tab, replace them...make it a NGO program...all the unemployed would have a few jobs...City owns 55%....win win.

CTJohn
CTJohn

Why focus on debatable cost vs. benefits?  Why not focus on the truly lousy service Decobike provides - broken bikes, stations that don't record returns and/or don't allow rentals, erroneous credit card charges?

Danny
Danny

What this article fails to calculate is that not every parking space is occupied 100% of the time. That is, cars that would have parked in these DecoBike spaces may have gone ahead and parked in another space instead...so the average parking space revenue may have gone up since there are less spaces available to park in. Duh. And other cars may have parked in city parking garages instead too. Remember, not every space is occupied 100% of the time so the analysis that the city "gave up" $3,000 per space per year is simply flawed.


I'm not pro or anti DecoBike, just pointing out the idiocy of the analysis is all.

Craig Chester
Craig Chester

Article still ignores the positive economic impact of bike sharing networks. Data is out there for other cities. Not sure if it's ever been surveyed for Miami Beach.

cpchester
cpchester topcommenter

Miami Beach might be 'losing' $258k in parking revenue from @decobike, but you could see if there are higher tax receipts from stores with docks nearby vs. before decobike. There are also negative externalities associated with those 86 parking spaces, and the number of car trips that decobike replaces. There is more than meets the eye when measuring the costs and benefits of bike sharing. 

DrumRollPlease
DrumRollPlease

I'm assuming City Attorney Jose Smith signed off on this contract? 

DrumRollPlease
DrumRollPlease

The city wants to regulate Segways in certain areas.  Too dangerous and too many accidents.  Miami Beach is not a bicycle friendly city, judging by the amount of accidents, theft, and vandalism.  

The bikes themselves get an $800 credit card charge.  That's what you are looking at if the bicycle fails to register when returned. 

George Hoover
George Hoover

The best Christmas present I ever gave myself. These bikes have immensely improved quality-of-life on Miami Beach. Now, if the shitty of Miami could just get their heads out of their asses and get Deco Bikes installed, Life would be even better!

Anthonyvop1
Anthonyvop1 topcommenter

 Cronyism ain't Pretty





BeachBum20
BeachBum20

Deco has almost 4 million rides logged (in a city of just 100k people) and majority (70% +) is by residents, that's heavy data in favor of bikeshare as an effective mode of transportation at no cost to tax payers (and they have even been getting a profit payment from Deco!)

BigSuze
BigSuze

@DrumRollPlease  Miami Beach is the most bicycle friendly area in south florida.  And nobody is paying 800 dollars when "the bicycle fails to register".  Maybe if you throw it off a bridge or disappear with it, but not because of some glitch.  Such a hater.  

DrumRollPlease
DrumRollPlease

@BigSuze @DrumRollPlease  

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