DecoBike Currently Costs Miami Beach Money, But City Is on Pace To Break Even
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.
Michael E. Miller
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.
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?
@MikeMillerMiami Decobike piece is way off the mark. Out of all the bike shares in the USA, it's the ONLY one that pays their city profits.— Craig Chester (@MiamiUrbanist) May 2, 2014
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.