San Francisco’s bike sharing program reckons with an uncertain future

Bay Wheels could help The City meet its transit and climate goals—if it can survive

Bay Wheels was riding high at the beginning of 2020. Day after day, the Bay Area’s bikeshare system was smashing its own ridership records, coaxing thousands of commuters out of over-crowded buses and congested freeways with its sleek, dockless e-bikes, and utilitarian pedal-powered bicycles.

Then came the pandemic, which caused a precipitous drop in ridership and prompted the system’s parent company, Lyft, to enact an unpopular price increase. But these widely reported developments only scratch the surface of Bay Wheels’ current state.

Public records obtained by The Examiner paint a more complete portrait of this privately-operated public service, which currently enjoys a monopoly on bikeshare in San Francisco. Bay Wheels’ financial woes in recent months have been compounded by a dramatic decrease in membership, as well as high rates of vandalism and theft that take stations offline for days at a time.

Meanwhile, conflicts between Lyft, the San Francisco Municpal Transportation Agency (SFMTA), the Board of Supervisors, and neighborhood groups have hampered the system’s expansion. These unique obstacles, combined with high prices and the enduring popularity of remote work here in The City, mean that Bay Wheels hasn’t seen the same post-pandemic “bike boom” as New York, Chicago and other big cities where Lyft operates bikeshare systems.

As a green, human-scale form of transportation, Bay Wheels’ success — or lack thereof — could have a major impact on The City’s climate plan to shift 80% of all trips onto sustainable modes by 2030, and its Vision Zero goal of eliminating traffic fatalities. There are indications that robust bikeshare systems can get people out of cars: In New York City, 40% of Lyft rides take place on bikeshare bikes, compared to just 12% in the Bay Area.

But there are bright spots on the horizon for Bay Wheels and for riders. This week, Bay Wheels announced a sponsorship deal with Mastercard, a move expected to improve its financial sustainability. Bay Wheels is also set to begin expanding again, with nearly three dozen new stations in The City planned to be up and running by early next year.

This unique public-private partnership between Lyft and SFMTA will continue to be a source of debate, in light of a forthcoming city report on what it would take to create a fully publicly owned bikeshare system in San Francisco. These documents illuminate the inner workings of the private company that owns and operates San Francisco’s bikeshare program, and the agency that oversees it. While Lyft and SFMTA don’t always get along, they must contend with similar issues on a day to day basis. Like managing a fleet of buses and trains, running a bikeshare system in The City is politically fraught, expensive and requires difficult trade-offs.

Pandemic slump

Bay Wheels bikes are available in San Francisco, the East Bay, and San Jose, with each sub-region subject to local regulations. The vast majority of rides take place in San Francisco, where Bay Wheels offers cheaper pedal bikes that must be docked at a bikeshare station, and more expensive electric-assist bikes that can be parked at a station or a metal bike rack nearly anywhere in The City.

The emails, memos and presentations obtained by The Examiner in a public records request show just how much this bikeshare system was affected by the pandemic. Bay Wheels memberships declined from 19,362 in February 2020, to 6,787 in May, according to the documents, a drop of about 64%. While Bay Wheels membership is trending upward, it remains 62% down from its February 2020 peak.

Ridership and revenue trends went in the same direction: In the year following March 2020, average monthly ridership in San Francisco hovered just over 100,000, a steep decline from the 369,000 rides The City saw in February 2020. (E-bikes were offered at no extra charge during the first two months of 2020, adding a confounding variable to ridership.)

The documents reveal bleak financials during this period, as well. In a presentation to SFMTA staff from June 2021, a bar graph without specific numbers depicts “ridership revenue” at about one-fifth the size of “operating costs and depreciation” for 2020. The projected revenue to cost ratio for 2021 appears closer to one-third.

Vandalism and theft represent a major driver of costs, Lyft reported to the SFMTA. Lyft spokesperson Jordan Levine elaborated on these issues in an email to me. Bike theft and vandalism costs are six times higher in the Bay Area than they are in New York City, Levine wrote. Thieves frequently target station kiosks for batteries, which removes that station from service until it can be repaired. Despite “station hardening” efforts by the company, the Bay Area is on pace to see 250 station batteries stolen by the end of the year, which is nearly equivalent to the total number of stations in San Francisco.

As a result, starting in March, Lyft began to raise the prospect of a Bay Wheels price increase with SFMTA, setting in motion a protracted negotiation process. At first, SFMTA staff, led by Bikeshare and Bike Parking Program Manager Adrian Leung, met Lyft’s request with skepticism. Leung worried the price increase would decrease ridership, even as it improved Lyft’s financials, observing that the two sides’ incentives were “misaligned.”

In response, Colin Hughes, Lyft’s senior policy manager for bikes, scooters and transit, compared the company’s position to that of the SFMTA Board of Directors when it voted to raise transportation fares in April 2020. These “tough decisions, like raising prices,” are necessary for long-term financial sustainability, Hughes argued in an April email. “If anything,” he wrote, these questions “may be more acute for a private company as we do not have the same access to bail-out funds,” invoking the Board of Supervisors’ reversal of SFMTA’s fare hikes the previous year.

By June, SFMTA staff appeared to acknowledge there would have to be a Bay Wheels price increase. However, Leung emphasized in an internal email Lyft would have to provide significant concessions in exchange: “We need to be clear that Bikeshare needs wins for the Public in order to balance any more revenue for Lyft.”

‘A bit baffling’

Despite their disagreements, Lyft and SFMTA eventually found common ground. Bay Wheels got its price increase starting on Sept. 23, and SFMTA got a commitment from the company to build new stations, expand its Bikeshare for All discounted membership program by 2,000, and refrain from discussing price increases for another 10 months. The new pricing scheme simplifies the cost structure, and makes San Francisco’s bikes the most expensive on a per-minute basis of all of the station-based bikeshare systems operated by Lyft, in New York, Chicago, Washington, D.C., Boston, Minneapolis, Columbus and Portland. For nonmembers, e-bike prices are now roughly comparable to shared kick scooter prices.

Shortly after the announcement, David Zipper, a fellow at the Harvard Kennedy School of Government who studies micromobility, panned the price increases. “It’s a bit baffling to me, when I looked at the pricing of Bay Wheels and I realized it would cost a family of four like $48 for a half-hour trip” for nonmembers on the e-bikes, Zipper told The Examiner in September. “We’re implicitly pushing people to drive or to use a car via ride hail. I don’t understand why we as a society would want this state of affairs.”

SFMTA staff, it turns out, aren’t particularly happy with this state of affairs, either. “I will be the first to admit: ebike pricing is already very disappointing,” Leung wrote in an email to a San Jose transit planner in June, before the latest price increase went into effect. “I hope San Jose holds out for as long as possible,” Leung continued, referring to the cheaper e-bike pricing scheme in that part of the Bay Wheels system.

In the same email thread, Leung also expressed frustration about the perception that bikeshare is an agent of gentrification. Before high prices became the object of Bay Wheels critics’ ire, many associated the bikeshare system with the tech industry’s encroachment into low-income neighborhoods.

In 2017, the bikes, then owned by a different company and sponsored by Ford, were set on fire, drowned in Lake Merritt, covered in paint and vandalized in various other ways. On the political front, the Mission District community group Calle 24, with the support of Supervisor Hillary Ronen, made sure bikeshare stations would not be installed along the 24th Street commercial corridor, including at the 24th and Mission BART station.

Leung recalled this history in reference to a tweet complaining about the high cost of a Bay Wheels ride through the Mission District, writing that there was actually a station permitted where the trip started, at 21st and Capp, but it was never constructed because anti-gentrification advocates felt “it wasn’t for The People.”

“What’s silly,” Leung continued, “is that there is still bikeshare reaching this area, but without a station, it’s more expensive… So, because advocates said it isn’t for The People, we weren’t able to offer the cheaper product for more people.”

Slow growth

Concerns about gentrification, as well as loss of car parking, have continued to hamper Bay Wheels’ expansion across The City.

Levine says Lyft has conducted technical studies and community engagement for several new stations in the eastern Mission and the Marina, two areas with high demand, but the Board of Supervisors has not moved to approve them. Additionally, Lyft has been asked by SFMTA to hold off on constructing nine fully approved stations, some for as long as two years.

“During the initial expansion, the agency halted several installations based on community feedback,” SFMTA spokesperson Stephen Chun wrote in an email. “With the goal of installing more bikeshare stations around the city, the SFMTA continues to work with residents, communities, commuters, local stakeholders, and elected officials.”

As part of the recent price increase agreement, SFMTA must allow Lyft to install 35 more bikeshare stations by March 1, or else incur the cost of storing the additional bikes that Lyft is procuring — a condition the company insisted on due to its previous experience with approved stations languishing.

In an April email to Leung, David Fairbank, Lyft’s general manager of bikes and scooters, explained how station approval contributed to Bay Wheels’ financial struggles. “Rapid station expansion has not been possible due to slow SFMTA approval of stations, even when we have permits issued, which has led to much higher station installation costs in S.F. than any other market.”

Compared to New York, Chicago, Boston, and Washington, D.C., where bikeshare stations extend far from the urban core in every direction, San Francisco only has bikeshare stations in certain residential neighborhoods, though e-bikes are available everywhere. The map will begin to fill out with the forthcoming station expansion, which will see bikeshare docks completed in Ingleside, the Excelsior, the Presidio and the Sunset, Chun said.

The agency is also in discussion with Rec and Park about allowing new bikeshare stations in Golden Gate Park. There is still no specific timeline for completing the remaining 30 stations that would fulfill the system’s original 2015 service agreement of building 320 stations across San Francisco.

The new stations should help boost bikeshare ridership in The City, which is basically flat compared to 2019 levels, even though e-bikes were not available for much of that year. When the East Bay and San Jose are included, Bay Wheels ridership is down 22% compared to 2019 levels. That’s a much better outcome than the Bay Area’s transit agencies, but a far cry from other big city bikeshare systems. New York’s Citibike and Chicago’s Divvy have each seen about 35%ridership growth compared to 2019.

But things appear to be looking up for Bay Wheels, financially speaking. Lyft’s sponsorship with Mastercard will include branding on bikes and stations. In a June email, a Lyft staff member said the sponsorship “brings us one big step closer to financial sustainability.”

Looming over questions of Bay Wheels’ financial sustainability is a forthcoming Budget and Legislative Analyst report, requested by Supervisor Dean Preston, that will explore the possibility of a municipally-owned bikeshare program. One of the key variables the report will address is whether this system could get around Lyft’s exclusive contract to operate bikeshare in San Francisco through 2025.

As the Examiner previously reported, Preston hopes The City can have more oversight and control over the bikeshare system than it does under the current public-private partnership model, aligning the system with Muni service and keeping fares affordable to low-income residents.

But there’s another way to reign in prices and increase democratic control of the bikeshare system, according to Zipper, the micromobility expert. “This is a mode that is really good for society, and good for a city,” he said. “So why not subsidize it?”

Zipper concedes subsidizing a private company like Lyft might “make people uneasy,” but it could be a lot cheaper than the government taking over completely. Boston and Washington, D.C.’s bikeshare systems essentially operate under this model, where local governments own the the underlying infrastructure, subsidize rides and pay Lyft to operate the system.

“If we’re reducing driving, that’s a positive social goal,” he said. “Why are we as a society making it so prohibitively expensive for many people to take the mode that creates virtually no safety risk for other people in a city, that is environmentally clean, that requires relatively little space?”

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