WeHo Pedals, West Hollywood’s bike share program, has fallen fall short of projected revenue from riders and advertisers and sponsors.
A report from the city’s Community Development Department states that “In the first 16 months of operations, while operating as a geographically isolated system and without a permanent system sponsor, WeHo Pedals is not yet on a path to become financially self-sustaining.”
“The revenue received over the last twelve months only covers 33% of the system’s operational costs ($344,750 a year); excluding city employee costs,” the report states. The city also has incurred $155,800 in city staff expenses, bringing the total cost of the program to $500,500.
The report says total revenue generated by the memberships and rides equaled only 13% of the revenue projected for the program. When advertising and sponsored revenue is factored in, the program generated only 19% of the projected revenue. That left the program with a loss of $386,799, which doesn’t include city’s initial capital investment of about $500,000.
The bike share program, launched in August 2016, has 150 “smart bikes” at 21 stations, 19 in West Hollywood and two at the Grove shopping center. The program is operated by CycleHop LLC, which plans and operates bike share programs throughout North America. The “Smart Bikes” used in the system are manufactured by Social Bicycles, which uses wireless technology to allow riders to use a smartphone app to reserve bikes, pay for using them and track and share ride data with friends online.
People can rent the bikes by the hour for $7 or buy monthly or annual memberships. The monthly plan costs $25 and gives one 90 minutes of ride time a day. The annual plan costs $99 and also provides 90 minutes a day or ride time. There is a $7 monthly plan for students and also special plans for low-income people.
While the WeHo Pedals program has fallen far short of its financial objects, the WeHo Pedals annual report calls the program a success based on its ridership numbers, which it says “have shown that there is a healthy appetite for bike share as a mode of transportation in West Hollywood.”
According to that report, the program has 1,656 active users, with the vast majority (1,479) using the pay-by-hour method to use the bikes. There are 98 people with annual memberships, 33 with monthly memberships and 46 with student memberships. The number of riders has increased steadily since the launch of the program, but the number of paid memberships has not.
The annual report says that WeHo Pedals users made 16,743 trips in 2016, travelling a total of 24,685 miles.
CycleHop’s contract with the city calls for it to secure an overall, long-term sponsor for the bike share program. An example of such a sponsorship would be Citibank’s decision in 2013 to sponsor New York City’s bike share program, which is known as Citi Bike.
CycleHop now has contracted with Premier Partnerships, to help it find sponsors. Premier negotiates sponsorships for stadiums such as the Rose Bowl Stadium and theatres such as Grauman’s Chinese Theatre.
“Based on the fact that there are currently no prospective sponsors in negotiation, and the limited window of opportunity for inclusion in the calendar year budget cycle, the sponsorship team does not expect that the program will be able to garner a title sponsor in FY2018,” the report states.
Because of that, city staffers are working with CycleHop to find short-term sponsors. Google was one such sponsor in November of last year, and Paul Frank was another in December, with the city getting $31,000 in net revenue. Paul Frank is the comic illustrator whose popular images have inspired a brand that includes clothing and musical instruments.
“If CycleHop does not have a title sponsor or comparable sponsorship program in contract negotiation by the end of the 2018 fiscal year, staff may recommend an amendment to the CycleHop contract for the city to contract directly with an alternate vendor to procure a sponsor for the system,” the report states.
Another source of continuing income is the sale of advertising space on panels located at 11 of the bike share stations. Sales of the ad panels are managed by Outfront/Decaux as part of the city’s bus shelter contract. Over the past 12, those sales have totalled $49,803.
The Community Development Department will ask the West Hollywood City Council on Tuesday to approve a revenue sharing and operations agreement between West Hollywood and other regional bike share partners including the cities of Santa Monica, Beverly Hills and UCLA for an integrated regional bike share system, to be called Bike Share Connect.
“The integration will create a seamless experience for WeHo Pedals riders traveling within and between these partnering jurisdictions without being limited by the individual system boundaries,” the proposal says.
The department also will ask the City Council to consider “an emerging bike share technology called ‘dockless’ or ‘free-floating’ bikes that are operated by private vendors and require no public funds for capital or operational costs.
“In order to properly address the benefits and challenges of this new bike sharing model, the Council may wish to either conduct a pilot program to define terms and conditions to control operation of potential private bike share vendors in the city, or prohibit such operators in West Hollywood altogether.”