Reports of Vélib’s Demise Greatly Exaggerated

velib_decaux.jpgJCDecaux touted Vélib on the cover of its 2007 annual report [PDF].

If you’ve read this BBC story currently making the rounds, you’d be forgiven for thinking that Vélib, Paris’s wildly popular bike-share system, has suddenly been afflicted by an epidemic of theft and vandalism that threatens its very existence. Vélib bikes have been "torched," strung up from lamp-posts, and smuggled across borders, the Beeb reports in alarmist tones. A spokesman for JCDecaux, the outdoor advertising firm that operates Vélib, calls its contract with the city of Paris "unsustainable," and the whole system is referred to in the past tense.

So is Vélib destined to burn brightly only to flare out after a short time? Hardly. Vélib is here to stay, according to officials and transportation experts familiar with the details of its operations. The BBC’s portrayal of a mortal threat, they say, is best understood as a negotiating ploy on the part of JCDecaux. (Note that the JCDecaux representative is the only source quoted in that story.)

"Decaux is using media sensationalism in order to obtain more money from the city of Paris," said Denis Baupin, who as Deputy Mayor for Transportation oversaw the Vélib launch in the summer of 2007.

The basic structure of the Vélib contract works like this. JCDecaux runs the whole system in exchange for the rights to 1,600 outdoor displays, turning its profit from selling that ad space. The city of Paris keeps the revenue from Vélib user fees, so it can claim to provide the service at no taxpayer expense. Now, with the full Paris network of 20,600 bicycles and 1,451 stations completed, penalties for inadequate maintenance are in the process of taking effect. Hence the hue and cry from JCDecaux.

"It’s in large part a PR issue," says Luc Nadal of the Institute for Transportation and Development
Policy
. Some aspects of the Vélib contract are still in flux, and the sky-is-falling press coverage
gives JCDecaux a stronger hand in those negotiations. "Their bargaining position depends on the public’s perception."

Not that bicycle abuse is a phantom problem. It exacts a real toll, but much of that cost has been anticipated and accounted for. Last July, the city of Paris agreed to pay JCDecaux 400 euros for every bike stolen in excess of four percent of the total fleet each year. Given the enormous popularity of Vélib — users have taken 42 million rides since its debut — the cost of those payments is minimal. Using the BBC’s figure of 7,800 missing bikes, the pricetag for the city comes to less than 2 million euros annually, out of 20 million euros in user fees.

"It averages out to about 15 stolen per day, out of 80,000 daily users," says Eric Britton, founder of the Paris-based New Mobility Agenda. Hardly a fatal blow. "It’s like skinning a knee."

Not only does the city already pick up a big part of the tab, but JCDecaux reportedly hauls in about 80 million euros per year from its outdoor displays, according to estimates cited by Britton. It’s difficult to know the exact figure — and how much is profit — because JCDecaux guards the data like a nuclear secret. Even the precise cost of replacing one Vélib bicycle remains unknown to the public. Inquiries we sent to JCDecaux’s headquarters in Paris have not been returned.

Public support for Vélib remains unflagging. "Vélib has been totally embraced by Mayor Bertrand Delanoe himself," said Nadal. What politician wouldn’t jump at the chance to be identified with a program that enjoys 94 percent satisfaction among constituents?

This is largely a testament to JCDecaux’s success in operating the system. According to Baupin’s office, however, Vélib maintenance workers report that management has let upkeep slide in order to amplify the perception of vandalism.

JCDecaux’s media gamesmanship "is short-sighted," said Baupin, in a statement translated from the French. "One
should not lose sight of the remarkable success of this
transportation mode due to a slightly underestimated rate of
vandalism." 

Then there’s the matter of JCDecaux’s own self-interest, and whether the rumors and exaggerations will hurt the company’s attempts to secure bike-share contracts in other cities. Said Britton: "Why would they run away from a golden goose?"

  • Chris in Sacramento

    This outstanding follow-up to yesterday’s worrisome “news” is excellent journalism. Thank you.

    One very attractive aspect of Velib-like projects (as opposed to traditional bike facility work such as lanes, trails or parking racks) is the amount of hard data that is produced. Usage, theft, etc are easily measured.

  • J

    As someone familiar with the financials behind a large bike share operation, I can confirm that the current Vélib model is unsustainable. The city of Paris is taking too much, and the current advertising climate does not allow JC to make enough money. On top of that, they underestimated some costs, including the price of each bike, which is closer to 1,000 euros than 400.

  • J (the original)

    J,

    This story provides the other side of the story that was missing from the BBC piece. My guess is that the truth lies somewhere in the middle, but if JCDecaux is so secretive, it tells me that they have something to hide.

    If this really is the goldmine that Streetsblog contends it is, than JCDecaux will have a hard time walking away from it and if they do, other companies will be lining up for a piece of the action. If it truly isn’t profitable, then Paris will have to pony up for a new company to run the thing. Time will tell.

  • WillyH

    Whatever the truth of the matter, New Yorkers deserve all the facts before a big government bike share concession is granted. That means JC Decaux or other bidders have to release their info to the public. This is public space that is being taken for bike parking and for advertising. The contractor has to make their financials public if they want this public contract. New York City hopefully learned from Paris in this regard. (Though the secretiveness of the extent of subsidies to the Yankees, Mets and Atlantic Yards are cause for concern.)

  • J2

    Sorry J(the original) Im waiting for my confirmation email and just used the letter.

    Other companies cant just come in and grab the contract if JC gives it up. There are enormous start up costs involved, and in this environment ad agencies will not want to pay.

    Im not saying JC will walk away. They cant. Even if Paris is a money loser, they need the city to sell global or national ad campaigns. However, theyre probably very unhappy with the loss because it could be corrected if they got the user revenue.

  • Obviously any system in the U.S. needs more transparency so that the company can’t claim to be losing money without proving it. Also 1,000 Euros a bike seems like quite a lot especially for those bikes. I know I’m not used to really paying for bikes (having gotten all of mine used from coops, etc.) but that price seems unsustainable for the abuse they take. In any case, I really hope to see some good study–and not just anecodotes–about the success of the program in the long run.

    One thing of note. I was in Paris in early August 2007 right after Vélib was introduced and it was great. I went back in November 2008 and found many many more problems with the bikes. I think 2/3 or 3/4 of the bikes I chose had problems. Some of these were minimal like missing grips from the handelbars. Some were slightly bigger, like not being able to stay in gear without holding the shifter (and the gearing on the bikes is so low that you don’t move if you’re not in the highest gear), to really serious problems of missing chains, flat tires (despite them being filled with foam…). These problems can be fixed but in a climate where the main investor is trying to shy away from its responsibilities it could be very problematic. Also, I found more stations full than ever before which means you have to find the closest station nearby to return the bike. None of this bothered me, particularly… but I remember getting into more discussions with other users of the system about its condition than a year earlier. Vélib’s popularity is directly related to the extent that people trust it. Once it gets the image of giving broken bikes and not functioning properly it will be hard to recover. Unlike the Subway when it faced its huge image problems decades ago Vélib can (relatively) easily be removed.

  • J2

    Fritz, the bikes cost 1,000 euros (or so) because they 1) have a locking mechanism, 2) have dynamo lighting and most importantly 2) are built to be used 12 times per day, unlike the average bike

  • This news would seem to give all those “private/public partnership” bike-sharing skeptics more reasons to doubt the merit of these arrangements.

    I wonder what the news is out of Lyon and Barcelona?

  • I live in Paris and have been looking into this story for the past couple of days. Can any of you please enlighten me on this: in order to rent a velib, you have to either have a pass, which you obtain by giving Velib your bank account details, or you have to use a credit card and give a temporary deposit on your card. As I understand it, you’re then liable for the bike you have taken. Velib makes a big deal about making sure the bike is locked back into the rack, which a solid red light on the lock confirms, before you walk away after your ride. So how is it that so many bikes could be stolen or simply abandoned? I can’t get my head around it.

  • Moser

    Dismissing this problem as entirely a bargaining chip is ridiculous propaganda itself, unless you think the universe can be supported through unlimited subsidy and that the public agrees with you.

    More compelling is the fact that Barcelona reported only about a 3% theft rate in its system’s first year of operation, and that in a city with higher rates of reported theft, burglary and auto theft than Paris. This suggests there is a big design flaw in Velib’s locking system. Both cities have significantly higher crime rates in these areas than NYC.

  • Ian

    I took out ten bikes in one day in October and all were fine and only once did I have problems parking and that was due to an event at Notre Damme. People were obviously cycling there…

    Alas, the BBC does not do real journalism any more… Some of them can’t spell, and the grammar I hear is often poor. Unfortunately people do listen to what the BBC says – and we have now adopted a Canadian train company as being British… Such silly mistakes!

    I too am puzzled as to how bikes cannot be charged for if not returned when credit card details are taken.

    The real problem is public order. CRIME! Even in the UK buses do not venture into certain areas due to stone throwing yobs. Given that my local Welsh police had the recent embarrassment of two of their officers physically fighting over who got to drive their new patrol car and this weeks assault of a Bishop, it would seem that Europe needs to sort out its police forces and then tackle this kind of crime.

  • Dave

    Even if Decaux’s business model is sustainable given that the city pay for stolen bikes in excess of 4% already stolen, it’s clear there isn’t enough of a deterrent to stealing these bikes. Do user’s have to give a credit card # before using the system? Can’t they be charged the price of the bike if it’s not returned? I suppose the program is only as sustainable as someone is willing to subsidize the replacement costs of the stolen bikes.

  • Brittany

    One of the major issues is not actual subscribers stealing the bicycles but subscribers locking the bikes up improperly. As a user of both Velo’V and Velib’s, I can attest to the difficulty of locking. The locking mechanism is attached to the frame of the heavy bicycle and you need to roll the bicycle frame alongside the bollard so the frame piece locks into the bollard (I hope I’m describing it well, it’s hard to explain). People who are unfamiliar or in a hurry will tend to rush away before checking to ensure they locked it properly (a light flashes and there’s a beep). Therefore people can go around to stations and jiggle certain bikes and remove them. Voila- that’s where I assume most of the theft is coming from.
    -Brittany from Philadelphia

  • JS

    Washington, DC’s bikshare program is due for a major expansion this year. It will be interesting to see if ClearChannel starts pulling the same tricks.

  • Peter

    Glad to see the calls for transparency of financials. That should be one of the requirements for winning any taxpayer money.

    To those confused about theft — it happens in Paris, too.

    I wonder if lengthening the amount of time from 30 minutes to an hour or more would help. It might give folks more time to lock up properly.

    As is the case with the transit crunch happening all over the U.S. right now, we need to build public transit systems that are sustainable — that are not so easily subject to the profit-over-people motive, and unruly markets.

  • Your post in response to the recent BBC article which cast doubt on the sustainability of Paris’s Vélib’ system was very enlightening, and I enjoyed the more positive tone you took in regards to the future of the bike-sharing scheme. As someone who spent considerable time in Paris last year, I had the opportunity to witness firsthand how popular and convenient vélib’s are for both inhabitants and visitors, and reading about the program’s possible downfall was very disheartening. While certainly, as you mention, the bicycle abuse undeniably “exacts a real toll” in terms of financial costs, you present an extremely compelling counter-argument by bringing up the potential “negotiating ploy on the part of JCDecaux.” In presenting concrete information about the agreement the company has with the city of Paris, specifically the financial statistics, you offer a very strong case defending the Vélib’ system while also delineating key reasons as to why JCDecaux would want to emphasize some of the more negative facets of the program. It upsets me that a corporation would exploit the less desirable aspects of such a system as a means to gain an upper hand in contract bargaining, especially taking into consideration the overall success of Vélib’ and the environmental benefits that such bike-share programs could create for major cities across the world. As the BBC article itself touched upon, many cities are taking the example of Paris’s system across the pond, with San Francisco among those interested in setting up similar initiatives. One person who commented on your blog mentioned New York City as an additional place where community bikes have the potential to be extremely useful; do you personally believe that this kind of system could be successful in the United States? Certainly New York already has a public transportation system comparable to the metro system in Paris, but are Americans truly ready to embrace the bike as so many Europeans have done?

  • ramonchu

    AP Newton is right about it not making any sense that Decaux isn’t charging users who lose their bikes; I suspect they aren’t to further doctor their numbers. Even if Velib is subject to the inflated claims of theft, the fault is DECAUX’S for their mismanagement of the system (they are the organization in charge of the maintenance of the bikes). I hope the Parisians learn a lesson from the debacle we’ve had here in the US and hold their transportation (can’t believe im calling a multi-national advertiser this) corporations accountable–before it’s too late.

  • Zach

    i live in Lyon. i find the Velo’v system very convenient for a few reasons. for one, you can take mass transit to a destination and go home by bike if you miss the last metro. it also encourages exercise when you’d otherwise only take the metro or bus or tram. i also like how it encourages cities to allot specific lanes to cyclists.

    but i can tell you that a lot of bikes arent in great shape. few are perfect. lots of blown tires, messed up chains, etc.

    there is a new generation of Velov’s coming out soon. i have only seen one and i rode it. i prefer it to the old generation. hopefully it will suffer from less problems.

    overall i think it is a system that is worth fighting for in places where it exists and is worth trying out in places it doesn’t.

  • Fergus

    Just beware when renting Velib bikes that you may not ever get your deposit back (150 euro per bike). My girlfriend paid for 2 bikes (300 euro) by debit card almost 4 months ago and never got her deposit back. I have been ringing and faxing the company but still they have not returned this money.

  • Matt

    The other side of the story?
    Excellent journalism?

    “Skinning a knee?”

    Did anyone do the math?

    There was no contesting of the number of stolen bikes at 7800 of 20,600.
    That’s 38% of the bikes!
    That’s not a bit of epidermis being scraped off!
    That’s vital organs gone missing!

    Knowing that 38% of rolling stock is disappearing each year, I would not be accusing JC Decaux of gaming the city. They are correct to call the program into question.

  • People who are unfamiliar or in a hurry will tend to rush away before checking to ensure they locked it properly, I wonder if lengthening the amount of time from 20 minutes to an hour or more would help. It might give folks more time to lock up properly.

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