Scooter-share companies have seduced so many of the city’s bike-share riders that Zagster plans to pull its Pace bikes out of Bloomington in mid-May.
Indiana University and the city of Bloomington joined forces in Oct. 2017 to bring a dockless bike-share provider to Bloomington. Their pitch for a program without startup costs drew nine interested companies, and in February 2018, they chose Massachusetts-based Zagster’s line of Pace bikes. The bike-share officially launched last June with 150 units and a promise to grow. Anna Dragovich, IU’s transportation demand management coordinator and bicycle manager, said residents initially took as many as 700 trips per week using the Pace bike-share.
“Our data shows that it was incredibly successful. Anecdotally, I saw people that hadn’t been on a bicycle since childhood got on a bike and went down the B-Line. There’s this sort of untapped freedom that a bike-share program can really provide the community,” Dragovich said. “As painful as it is for me to admit it, the data does drop off with the arrival of the scooters.”
Bird and Lime launched their electric scooter-shares in September and riders flocked to the self-propelled alternative. Karl Alexander, senior market manager for Zagster, said it was ultimately a financial decision to pull out of Bloomington. He said scooter-share companies pulled venture capital funding away from bike-shares, and the 10-20% Pace earns in rider revenue isn’t enough to cover the cost of its Bloomington operations.
“We understand the precedent of the bicycle and what it means in Bloomington,” Alexander said. “We still see the value in bicycles as a form of transit, but sometimes, the economics of it gets in the way a bit.”
Alexander said Zagster plans to collect its bikes from the Bloomington market so they can be used in other cities where there are local subsidies available to support those operations.
According to the termination agreement, Zagster must continue to provide around 150 bikes until May 15 or pay $8,500. That’s because Zagster’s initial agreement with the city required the company to provide annual financial contributions to help offset any costs associated with the bike-share program. The city has already collected the first annual installment of $2,500 from Zagster and would’ve collected $8,500 over the next two years if the company had decided to stick around.
Alex Crowley, the city’s director of Economic and Sustainable Development, said the city is willing to forgive those financial commitments as long as the company doesn’t leave users hanging. If Zagster does pull out before mid-May, Crowley said the city will collect on those contractual obligations.
“I don’t think it’s reflective of the potential or viability to have any bike-share program in Bloomington,” Dragovich said. “The transportation field at large is evolving very rapidly. Moving forward with any future bike-share program, I think the next step to make a bike-share program successful is to include pedal assist or e-bikes.”
The city is already looking at replacement providers that offer pedal-assisted or electric bikes, but Crowley said he’d like future partnerships to be nonexclusive. Even though it helped curb the sort of mayhem that might arise from a fleet of bikes that can be chained to anything, he said exclusive partnerships could stick the city with an underperforming provider.
“If you’re a strong player, you’ll survive. If not, we don’t want to be stuck with you,” Crowley said. “There’s something to be said for letting the market figure out who the strong players are and let that play itself out.”
This may not be the end of Zagster in Bloomington, though.
Alexander said Zagster has partnered with and helps manage Spin scooter-shares in a half-dozen cities across the nation. Spin has already signed an interim operating agreement with the city, so Zagster may not be gone from Bloomington for long if Spin decides to use Zagster’s management services.
Given the chance, Alexander said he’d love the opportunity to manage Spin’s Bloomington operations.
This article provided by NewsEdge.