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Tuesday, August 4, 2015

The Uniqueness of San Diego's Bike Sharing Program

Bike sharing is common in many developing cities across the country. San Diego's bike sharing program unique because it is run by a company called DecoBike that doesn't receive public subsidies. The program must compete and make profit from their bikes and run an actual business while still serving their stakeholders. With as much as 180 sites planned over the next coupe of years the bike sharing program isn't yet a lucrative business.

It takes time for bike sharing programs to catch on. They need to be placed in high-density, high traffic areas, where a middle age and younger demographic resides. The company will likely chose sites that create the greatest revenue as they install stations throughout the city. The most lucrative starting first.

The purpose of a bike sharing program is to reduce congestion and improve lifestyles and this means attracting a customer base that seeks alternative and greener forms of transportation. They are not trying to attract people who already own bikes or people who are unwilling to pay for renting a bike.

Because they are not receiving tax payer subsidies they will need to be sure that each dollar they spend is returned with a profit. If this doesn't happen the bike share program will either disappear or need government money to maintain. No one wants that!

It is entirely possible to marry portions of business with government and the needs of the people. If this program is successful in the long-run it can be expected to be a model for other like-minded businesses that can both win by serving public functions while drawing a reasonable profit.

Whether you like the program or not depends on how you look at government's job. If the job is to be all and provide all for people then it would make sense to subsidize programs and keep them under the government's umbrella. Unfortunately, as we have learned in history trying to be all for everyone makes programs inefficient and costly in the long-run. San Diego's bike share program is interesting because it create a entrepreneurial public-private program with a possible win-win situation.

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