Divvy costing taxpayers big...

... according to this item from the Illinois Policy Institute:

http://illinoispolicy.org/blog/blog.asp?ArticleSource=6230

I have real basis on which to form an opinion. I have yet to try Divvy (I have plenty of my own bikes) and don't live in Chicago. A friend at work passed the link along.

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Permalink Reply by Duppie on October 4, 2013 at 8:48am

When reading that article, keep in mind that the Illinois Policy Institute is a conservative anti-tax think-tank.

Permalink Reply by Tank-Ridin' Ryan on October 4, 2013 at 8:48am

My favorite line from the article: "For every taxpayer dollar spent on bike share programs, that dollar cannot be spent elsewhere in the local economy."

Really?  Well, for every taxpayer dollar spent on item X, that dollar cannot be spent for item Y in the local economy.

The solution is obvious here: stop spending taxpayer dollars on anything.

Permalink Reply by Skip Montanaro 0mi on October 4, 2013 at 9:00am

Sorry, "I have no real basis...". That's what I get for trying to bat something out quickly while at work.

S

Permalink Reply by Duppie on October 4, 2013 at 9:00am

The writer of the article lives in Schaumburg, IL

Permalink Reply by Apie (11) on October 4, 2013 at 9:10am

I LOVE DIVVY!!

 

Thanks Gov't and taxpayers!

Permalink Reply by Skip Montanaro 0mi on October 4, 2013 at 9:23am

They don't? Or was there a joke hidden in there someway?

h' 1.0 said:

I think people should have to pay to use the Divvy bikes.

Permalink Reply by Tom Dworzanski on October 4, 2013 at 10:47am

I don't understand why so many people have to immediately jump to superficial attacks on the group like this is the Huffington Post or something. There are many holes to the content of the article there is not need for such nonsense.

Hole 1: Divvy hasn't been around for 12 months so it's not fair to split their total revenue by 12. In fact, even starting at the launch date wouldn't be fair unless you can someone compare only the original stations to the subset of the same stations at some point in the future.

Hole 2: These numbers don't account for the massive amounts of money Divvy is taking in from overage fees. Believe me, all those people laying on this beach this summer next to their rented Divvys were not meeting the 30 minute time window. Nor are other tourists or even regular riding key-fob holders (like yours truly).

Hole 3: You don't need a graduate degree in finance (though having one I will vouch for this) to know a capital-intensive project like this has high start-up costs that won't be recovered for years. A Divvy bike is a massive piece of steel that will last a long time. You have to spread the cost over many years and match those against revenues (there's also a need to account for the time value of money, disposal revenue, relative profit vs alternative modes of public transport to the city, relative costs versus other modes of transportation which one of the commentators on the article mentioned, and other fancy things).

Hole 4: There is a mind-share aspect to Divvy that requires time to develop. Many people are scared to adopt something new until something else happens (like being convinced to try it). Early adopters do not represent future usage. (Though if they are an indication of future use, I think Divvy has a bright future.)

Hole 5: The article puts tremendous weight on winter but that will ultimately be a minor driver of Divvy use. What really matters is the tourism industry in this city to feed system with $7 + overage fee riders continuously.

The article does point out something important though: "Chicago selected the politically connected ALTA despite the fact a local company, Bike Chicago, placed a bid that was nearly 40 percent cheaper." This, like all contracting in this city and state is a big problem I describe here. When someone recently complained about a Divvy situation, I wrote in to the city in support that person and received a reply from someone at this company. I'm sure there are so many layers of sub-contractors in this system that the costs will never be overcome by the revenues because the people who run the system will never let it happen.

Permalink Reply by pceasy on October 4, 2013 at 11:58am

Do roads and expressways make money? 

Permalink Reply by Thomas Bruzan on October 4, 2013 at 12:15pm

I'll bet revenues double when Divvy puts out the boys bikes.

Permalink Reply by Tom Dworzanski on October 4, 2013 at 12:17pm

From the article:

  • Five-year cost is $17,105.26 per bike

Seventeen f'n thousand dollars per bike. It's not about quality with that kind of money involved. The quality of operating steel bike sharing was maxed out many many thousands of dollars ago. In fact, it was probably maxed out by Bike Chicago many thousands under their bid as well.

PS. I still love Divvy. I just hate corruption.



h' 1.0 said:

Is there some requirement that the lowest bidder has to be chosen?

If I throw a bike share proposal together and undercut all the others, do I automatically get it?

Bike Chicago sucks ass and learning that they didn't get it brightened my day.

All major search engines must have been down the day the "Illinois Policy Institute" wrote this piece.

Coverage here:

http://bikeportland.org/2012/03/19/alta-bicycle-share-wins-chicago-...

and here:

http://gridchicago.com/2012/bike-sharing-selection-process-tainted-...

and here:

http://www.suntimes.com/11341996-417/rival-citys-bike-sharing-progr...



Tom Dworzanski said:

The article does point out something important though: "Chicago selected the politically connected ALTA despite the fact a local company, Bike Chicago, placed a bid that was nearly 40 percent cheaper." This, like all contracting in this city and state is a big problem I describe here. When someone recently complained about a Divvy situation, I wrote in to the city in support that person and received a reply from someone at this company. I'm sure there are so many layers of sub-contractors in this system that the costs will never be overcome by the revenues because the people who run the system will never let it happen.

Permalink Reply by Tom Dworzanski on October 4, 2013 at 12:25pm

LOL +1000

Thomas Bruzan said:

I'll bet revenues double when Divvy puts out the boys bikes.

Permalink Reply by Anne Alt on October 4, 2013 at 1:39pm

Ha!  My first thought on that line was: "what about the benefits of improving transportation to/within neighborhood business districts? How about the potential increase in sales/jobs/tax revenue if businesses near Divvy stations see more revenue?"

Tank-Ridin' Ryan said:

My favorite line from the article: "For every taxpayer dollar spent on bike share programs, that dollar cannot be spent elsewhere in the local economy."

Really?  Well, for every taxpayer dollar spent on item X, that dollar cannot be spent for item Y in the local economy.

The solution is obvious here: stop spending taxpayer dollars on anything.

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