 Welcome to this week's Moving Hawaii Forward. I'm your host, Tim Appichella. In the next week or so, Waikiki and downtown residents will soon see a thousand new beaky bikes stationed on our sidewalks and streets. Bike Share Hawaii is a nonprofit company that has brought this new program to Honolulu. A couple months ago, we had Laurie McCarney, CEO of Bike Share Hawaii, on to this show to describe the program in detail and those benefits the Bike Share program will bring to Waikiki. However, since that visit, there have been a couple of issues raised in the news that prompted me to revisit the Bike Share program. One issue is the rental rate for bikes that local residents and tourists will pay if they wish to ride and take advantage of this new program, which is partially funded by the city of Honolulu. Our today's guest, Wyatt Gordon, German Chancellor, fellow and urban planner, recently wrote an opinion editorial in the Honolulu Civil Beat News which focused attention on why should the bike rental rate be higher here in Honolulu than elsewhere in the Bike Share where Bike Share Hawaii has other operations in the USA. I suppose, given yesterday's Newsweek article that rated Hawaii the most expensive state to live in for the seventh year in a row and the looming, ugly debate about the rail project and the taxes needed to pay for it and other pending taxes, proposals that really highlight the issue of the cost of living here in Hawaii, these articles seem to be in the news almost every day. So perhaps it is a good time to look at the pricing of this new Bike Share program and we're going to do that. We're going to get to the bottom of this. Wyatt, thank you for coming on our show this morning and I look forward to a healthy discussion about BIKI and Bike Share Hawaii and the pricing structure. Thank you for having me. The article was titled, Honolulu residents get a raw deal with Bike Share. That's a pretty bold title. So let's talk about your editorial and kind of some of the main points that you raised in that op-ed opinion. So I chose a really bold title because the pricing system that's been put forward I find to be extremely bold to say the least. This is a completely unprecedented type of model. They've never done pay as you go where you buy blocks of minutes. So they're trying out something new which I totally respect but what I don't find acceptable is that they've left out options for residents for kama-aina and for low-income individuals which were explicitly recommended in the pricing study that was released by the Department of Planning and Permitting. So Bike Share Hawaii is a non-profit organization. They had some assistance from the Department of Health and I believe the City County of Honolulu in the form of grant dollars. Correct. They received $1 million each from the State Department of Health and the City and County of Honolulu. Okay. Were the requirements of those grants were they designed to address any specific criteria regarding pricing for residents or low-income? As far as I know that there were no strings attached to the money in terms of what the pricing should be for the residents I think is a real oversight from the people who gave out the grants. Because if I recall your article it was you implied that because we're getting public tax dollars to bring Bikki bikes to Honolulu that maybe there should have been some implication that a pricing structure would be beneficial for local residents. Well I think the expectation of residents here is that if they're going to spend $2 million of their tax money towards something that they should get something out of it I think that's an expectation that goes unstated. So for them to put out these prices that expect people to pay $180 to $300 a year just to use their bikes I find that to be pretty outrageous. Okay. One thing that your article did highlight was the fact that their annual price which there is no annual price for this new Bikki bike system it was a monthly way of pricing structure of $15 and you just took that by 12 months and you came up with $180. Correct. Because the pricing studies that were released by the Department of Planning and Permanent which is actually commissioned from Nelson Nygaard a very reputable planning firm and the study that came out of the University of Hawaii, Manoa Department of Urban and Regional Planning both suggested an annual pass that it's $75. They however ignored these recommendations and went forward with only a monthly pass. So the best value for locals if you want to use this bike share system year round is to buy 12 monthly passes at $15 a pop that makes $180 a year to use this system. Right. Minimum. If you want to get the 60 minute ride version instead of 30 minutes then you have to pay a full $300 a year to use bike share. Right. Now that was very clear in your op-ed. Now you compared that to San Francisco, Boston, Washington, D.C. which for one year type of annual pass there were about $90. Yeah. The average for bike share annual membership rates on the mainland is $85. A little bit higher, a little bit less but that's the average. Yeah. That's a full $95 more expensive than our best option here in Honolulu. Correct. And so in fairness I don't have Laurie McCartney here at this table with you. I thought about it but I did reach out. I would have been open to it. Yeah. Good. Yeah. I have no problem with bike share. I'm not a bike share hater. I really love this system and I actually volunteered with bike share for nine months doing community outreach and engagement. So I really want this system to succeed but I think the problem is is when you do something the wrong way here in Hawaii especially people will never forget it and if you shut locals out right at your launch and you don't offer an annual pass you don't offer anything to come INA you don't offer anything to low income people that's what people are going to remember from years into the future and they're just creating bad will for themselves. Yeah. Well I don't have her here at this table but she did actually respond to this morning a publication Honolulu Civil Beat kind of responding to your editorial so we have dueling editorials going on here and she does make one point that did make sense to me and that was that in these markets be it San Francisco, Boston, YGC they have a winner and here in Honolulu they're very minimal so her point was that we have operational costs for a 12 month period versus an operational cost that maybe be 7 months in some of these other states where there's a real winter so therefore the overhead is greater here therefore that the fair recovery revenue needs to be higher to cover a 12 month period of time. Well you have to consider that's a completely different because yes they only have to pay for operations maybe 9 months out of the year which isn't even true I used to live in DC when Capital Bike Share launched and people bike throughout the winter it's just part of the life on the mainland that you live through winter and on the other hand so yes you do have to pay for the operations 12 months out of the year but you're also bringing in revenue 12 months out of the year exactly because they can operate 12 months of the year unlike a lot of other systems where they do see ridership decrease in the winter so their argument that oh we have to pay for operations year round you're also making money year round so this is no excuse Not to the degree though in some of these other cities to where here in Hawaii they'll be able to capture revenue because we have better weather and other things that were cited that makes Honolulu a good market is that the terrain is flat yeah actually McCarney CEO Larry McCarney she actually boasted about that she said quote unlike other cities we have all five factors that make for a successful bike share system good weather, flat terrain, urban density government support and lots of tourists and that was in a Hawaii business magazine interview from this past January so in this past January how this has all of the best factors to be one of the most profitable systems in the world but then she feels like it's unreasonable to give locals a fair deal so you just don't think locals are going to use this you just think that the pricing is too high and that they're not going to use it and this this bike system here that's being introduced this week is in your words the most expensive in the country or in the world it is, there's no other bike share system in the world that's more expensive than this one for an annual usage I don't see how locals are going to be able to afford that because if you think it's $180 a year well I could go to Walmart and buy a brand new bike for $100 which is almost half the price of what they're introducing just to rent a bike so I don't see how that's really affordable especially considering that this isn't an either or I've heard a lot of people trying to compare this to a bus pass for $100 a month but that's really a false argument because we're going to want people to use bike share in conjunction with the bus so say you live out on the west side or up in Mililani and you catch the bus to town but you're still eight blocks away from where you want to be for your job we want people to get off the bus and hop on a bike we want it to be convenient, we want it to be easy but that means that people are going to have to afford both a bus pass and now a bike share pass so it's actually compounding the problem of affordable transportation for locals where I see the benefit of Bikki is which you just pointed out is a connectivity issue and particularly once rail is here and you have a station but you're still six blocks away from work or even further than that this would be an ideal situation to just hop on a bike but that would be for the commuter that is using it full time every day to go to work and I'm not sure to what extent Bikki is addressing the everyday commuter I mean that is certainly a market segment that they're trying to address the other market that they're trying to address is people who use it periodically and that could still be a commuter they just not going to use it all the time but once in a while when they want to run an errand during lunch or something like that it might be a very good product to use yeah no I'm all up for experimentation and pricing and I have no issue with the current pricing system except that I feel that it lacks options that are affordable for comma INA and for low income people so there's two ways of looking at revenue and there's two ways of looking at expense and one is you keep the existing pricing structure exactly where it is but to get to your point do we charge the tourist and keep the pricing structure right where it is or do you take it in the shorts a little bit and you just reduce the pricing for local residents given the fact that they need to be viable and self-sustaining and profitable to keep this program going wouldn't it make more sense to increase the price to tourists? so the prices for tourists are already high that is how all bike share models function the idea typically is that you have monthly and annual passes and the daily, weekly and monthly passes are priced above where you would expect them to be so they make a lot of profit off of those very short periods of rental use whereas the annual pass is set at a very low level so that way it can be subsidized by all of the excess profit generated by the short term usage of tourists predominantly so basically it's a way to use tourist dollars to subsidize the mobility and the environmentally friendly form of transportation for locals to incorporate into their commute but that's not what they've done in this system with this system they're trying to get both lots of money from tourists which is understandable and traditional but also get lots of money from local people to the point where I think that locals will just simply choose not to ride it considering all of the other hassles you have to deal with as a biker in fairness to bike share so I'll draw Lori's comments about what percentage of this program is going to be dedicated to commuters versus what percentage of this program is going to be dedicated to tourism I think in your op-ed you said 70% tourism yeah it's generally that's based off of what people have seen in various bike shares across the mainland it can be anywhere from 70 to 90% of tourists depending on the city and the structure so this is going to be predominantly used for locals for our tourists minimum 70% of all users will be tourists which is an even stronger argument to offer a good deal to the 10 to 30% of local people who will be trying to use this system one thing I do know is that when cities obtain grants be it a CMAC grant or a federal T21 transportation efficiency or an active 21st century that those grants are usually when the grant proposal goes through is to address the commute market and trying to reduce congestion from commuters not more as a promotion for tourism so I guess I'm just wondering how many trips or cars will be reduced off the streets on a program that may be dedicated more to tourism than to the commuter we don't know until this program actually takes effect but it goes to your point a little bit to say well if you want commuters to take advantage of this then the pricing structure needs to be advantageous for those commuters the way that bike share was launched and sold actually began with the EPA and it started with the EPA looking at ways that we could reduce our vehicle miles traveled on the island the EPA actually put forward money to get bike share started but don't quote me on that so it all started about trying to get people to bike more instead of driving cars but as the non-profit was formed and they failed to get any private donations then it became imperative upon the city and the state to put forward money so what was originally envisioned to be a completely self-sustaining NGO non-profit then had to come to the taxpayer and beg for money to keep themselves alive until they could find a private donor what was that thought, we're running out of time we're going to take a commercial break I'm Tim Appichelle, this is Moving Hawaii Forward I'm here with Wyatt Gordon and we'll be right back Aloha and thank you Aloha, I'm Tim Appichelle welcome back to Moving Hawaii Forward I'm here with Wyatt Gordon who recently wrote an article in the Honolulu Civil Beat regarding the Bikie Bike Program which is being sponsored by Bike Share Hawaii and specifically we're talking about the fare structure and specifically to that we're talking about the fare structure of what the cost is to local residents so again welcome back thank you and you had a graph in your op-ed piece and I think we want to take a look at that I want to pull it up that would be excellent and here it is well we won't be able to look at it because that one's offline but you have it right in front of me I want you to go ahead and explain it so basically what you see here are eight of the top cities that have Bike Share systems on the mainland Honolulu, New York City, Chicago, Denver, San Francisco, Boston Washington D.C. and Minneapolis and there are two bars for each of them and one it explains the cost of the price per year for 30 minute unlimited rides just to be sure we're comparing apples to apples so all cities offer the same one and then the other one the darker bar is the purchasing power in the metropolitan area this comes from Forbes in 2014 so what Forbes found was that Honolulu ranks actually 107th out of 113 American cities in terms of purchasing power so if you look at the graph you see that not only is Bike Share Hawaii going to be the single most expensive system in the country if not the world but it also has the lowest purchasing power based on all of those eight cities so essentially Bike Share Hawaii is asking residents who have the least amount of money to put toward this the highest prices in the world okay again Miss McCartney is not here but I'm going to bring up a point that she raised and that was they did extensive research about the marketplace here in Hawaii and one of the things that they they came up with was that they're trying to get away from the annual pass system because they feel that those annual pass systems are restrictive and they're not as successful in these other marketplaces and so by their research which they came up with they're claiming that maybe it wasn't the best pricing structure for Bike Share Hawaii or the Biki program so annual passes do lose money and they lose money by design because annual passes are designed for the local people who actually live in the city that host the Bike Share because as we've seen over the past week hosting a Bike Share system basically as a whole doesn't always directly translate into benefits for all residents so from where we've seen parking stalls disappearing infringements on sidewalk space possible ADA compliance issues and general frustration from the thousands of oblivious bikers we're going to have added to our streets overnight basically it's a way for the Bike Share system to say hey we know that this isn't necessarily something for all individual residents but for those people who do want to use the system and be part of it we're going to make it affordable and that's a very strategic move on Bike Share systems part because what it's doing is buying them allies they need allies who are local residents you're saying that a discount for local residents is basically a mitigation from some of these things that Biki may present to it's a way to apologize and make up for all of the frustrations that come with having a large Bike Share system because we have a lot of tourists if you just think back to the Bike Share system in Kailua that was 12 bikes it was a nightmare people complained about it to this day and it's going to be like that but with a thousand bikes in urban Honolulu in Waikiki with a lot of one way streets and we're going to be dealing with a lot of tourists from other countries that have very different laws regarding bikes and the flow of traffic it's inevitable that there's going to be an immense amount of frustration and offering an affordable annual pass is a very effective strategy for a Bike Share to get buy-in from local residents that might otherwise simply complain or seek to dismantle the system completely you made your point very well on that if I recall that this program that Bike Share Hawaii was going to place ambassadors out on many of these bike stations I don't know for what period of time or duration but these bike ambassadors are going to be there to kind of help tourists get by the fact that they don't know the rules of the road here in Hawaii and try to educate them about biking courtesy I guess if you will one point you made that I do want to talk about before the show ends and that is the elimination of parking spaces that I'm already hearing about my neighborhood some of these spaces are disappearing so we're going to talk a little bit about that okay so your point is that there should just be a discount because one if you want to encourage the commute market then address the commute market but two is a mitigation for the inconveniences that local residents in the downtown core and Waikiki are going to have to experience three local tax dollars two million worth went into keeping the system alive when no private entity would pay for it before the private company of PBSC Urban Solutions swooped in and installed this new bike share system and four because they really need local allies this could become a political fight and if they don't treat locals right then locals could easily agitate for a mandatory helmet law which would effectively kill the system as just happened in Seattle so if they don't treat local people right then local people are going to look for ways to end bike share in their city so it's really just in their best interest to offer local people a good deal so that locals are also benefiting from this system and support the system's existence so if you had your way or if you had your dreams come true on this what pricing structure would you what would you feel would be a win-win I feel that they must introduce an annual pass the studies from UH Kauai Manoa and from the Department of Planning and Permitting suggest $75 for that annual pass maybe that's negotiable maybe that's where we come to a compromise and set something higher there are a couple cities on the mainland that have raised their annual pass prices but only to $85 or $99 not to $180 you said that an annual pass is a losing proposition it's always going to be a losing proposition so if I'm trying to make a program viable and viable for the future why would I implement a pass structure or a pricing structure that is going to lose money for the for our operation it's exactly the same way that they offer affordable passes to low income residents for example, Boston, New York City the Bay and Chicago $75 annual passes to people who are below the poverty line and in Washington DC they give it out for free that's not to make money but a bike share system's sole purpose isn't to make money this is a non-profit that's supposed to have a heart and it's supposed to care about the community it took all of this money $2 million from the public so it should care about the public and yes, they'll lose money on adding a $75 annual pass adding $5 low income pass options but that's what it means to be a part of this place to be a part of the community and to care for those around you you're not just out to make money you have to actually try and do something beneficial and that's why they got all the grants from the city and the state to make an impact on residents' lives and to give real benefits well they are going to make money I mean the projection for the first year is $1.2 million second year it's $2.6 million so that revenue is going to go towards expanding and investing the system as Laurie McCarney continually repeats but it also has to go back paying for the loan for the bikes that were purchased with PBSC's money the private company and a portion of that revenue is going to go to PBSC Urban Solutions or else why would they spend so much money as a private company to come in with the system for our non-profit okay the point is well made I want to talk about the issue that I hear residents talking about is the elimination of some parking spaces and I'm going to run through the math very quickly but there's a thousand bikes and each station holds 15 bikes so if you take a thousand you divide it by 15 bikes you come up with about 67 stations and that's just installed 87 because there are going to be more stalls than there are bikes so when you show up to any given station there should be extra stalls available for you to dock well I didn't do the math on 87 there are 87 I saw 87 in the news this morning about a third of all stations will or have already removed parking stalls so based on 67 you take a third of that and you're basically looking at about 44 if you take 82 times that by 2 because two parking stalls are being removed you've got about 44 46 stalls removed from these new stations is that a lot? if you take the number 87 roughly 90 we divide by 3 so we have 30 stations that are using parking multiply it by 2 so we actually have 60 parking stalls that have disappeared for bike share I personally know and understand the outrage it's extremely hard between all of the abandoned vehicles and commercial vehicles that park in our area I understand the frustration that's part of why I choose to bike for a lot of my transportation but that doesn't take away from the fact that they're taking away what were publicly available stalls and turning them into more of commercial enterprises because if these private if these bike share system isn't priced for locals to use then locals have essentially lost their parking stalls and gained a tourist amenity in their place so that's not really a good deal for local people yeah I think if there's a criticism that might come out a little bit louder it won't necessarily be over your pricing structure as you've op-ed on I think it's going to be the loss of parking spaces because people notice that right away they already know how tight these neighborhoods are I think that's where in fact on Capulani Park there's a lot of discussion about public lands the trust but the city has the right of ways there they have right of ways so it's up to them to increase parking charges if they wish or remove parking if they wish so I don't know if the public land argument works or wins the day I did see the attorney general investigating that because the Capulani trust explicitly states that there can't be any commercial enterprises and one interpretation is that bike share is based on these profit numbers so it's going to be investigated by the state attorney general I'm going to follow up with the city representative he's a public information officer about that point and I just didn't have a chance to do it before the show but yeah that needs to be kind of looked at and hopefully I'm going to tell you where I'm coming from on this I hope this program succeeds I do too I spent 18 years of my life trying to reduce traffic but at the same time I would like to see the commuter market of this program and it's great that tourists take advantage of it I just don't know how many trips or how many cars we're taking off the road from tourists and my hope is that more residents local residents take advantage of the program and we get rid of more cars so that we have less congestion I really want the system to succeed I spent nine months volunteering for them completely unpaid as an intern working on issues of community engagement and outreach this is on the community what benefit is this system going to bring to the community and the way I see it priced now I don't see local people having the opportunity to use this and enjoy any of those benefits to mobility or public health so we really just spent these two million dollars for a tourist bike system okay well I'm glad you brought your points up I may ask Lori McCarney to come back again I'd love to hear your responses thank you for taking your time to join us I'm Tim Appichella, this is Moving Hawaii Forward we'll see you in a couple weeks Aloha