City of Santa Monica
California

Staff Report
3877

Introduction and First Reading of an Ordinance Extending the First Shared Mobility Device Pilot Program and Creating a Second Pilot Program

Information

Department:Mobility (PCD)Sponsors:
Category:07. Ordinances

Recommended Action

Recommended Action

Staff recommends that the City Council:

·         Introduce for first reading the proposed ordinance, amending Section 3.21.090 of the Santa Monica Municipal Code to extend the term of the first Shared Mobility Device Pilot Program from May 17, 2020 to June 30, 2020, and enacting new Chapter 3.22 of the Santa Monica Municipal Code to create the second Shared Mobility Pilot Program extending until December 31, 2021.

Staff Report Body

Executive Summary

When dockless electric scooters landed in Santa Monica in September 2017, they provided a new and potentially attractive mobility alternative to trips by car that could help the City achieve its broader mobility and sustainability goals. Given the disruptions and safety concerns caused by their appearance, Council directed staff to create the Shared Mobility Pilot Program to develop a new area of policy, regulation, operation and enforcement for shared mobility services in Santa Monica. The program was designed to provide flexibility to solve new challenges while adapting to a nascent and rapidly evolving industry.

 

The first pilot program launched in September 2018 with four shared mobility companies, Bird, Jump, Lime and Lyft. Following the launch, people quickly took to riding shared electric bicycles and scooters, generating a total of 2,673,819 trips from October 2018 to October 2019, with 49% of all riders reporting that they would have otherwise traveled in a car (either driving alone or via a transportation network company such as Uber or Lyft).

 

While the operators largely met minimum operational requirements as defined in the Pilot Program Administrative Regulations, efforts did not always achieve the desired pilot program equity, safety and rider behavior, and program oversight outcomes. The pilot program evaluation presented to Council in November 2019 identified several areas to be addressed to further advance shared mobility in Santa Monica, namely: affordability, equity, sidewalk riding, parking, industry instability, and oversight. At that meeting, Council directed staff to develop a second pilot program and explore options to reimagine the City-owned Breeze Bike Share system as part of the City’s shared mobility network.

 

Pursuant to Council direction, this report recommends that Santa Monica enact a new Shared Mobility Ordinance (SMMC 3.22) modeled on the existing Shared Mobility Ordinance (SMMC 3.21) to establish a second 18-month pilot program beginning in July of 2020 that builds on the successes and structure of the first pilot program. The second pilot program would: 

·         Maintain the structure and flexibility of adaptable Administrative Regulations;

·         Reduce the number of operators, but maintain the total maximum number of devices to meet peak rider demand;

·         Seek to include a diversity of different device types to meet diverse mobility needs;

·         Clarify and/or intensify other regulations toward ensuring customer reliability, affordability, and access, while improving safety, rider behavior, sustainability, and administrative outcomes;

·         Maintain an open and productive partnership between the City and operators;

·         Ensure compliance with the administrative regulations through a clearly defined progressive penalty structure, and

·         Continue to recover the costs to oversee and enforce the program.

 

Staff would select shared mobility operators for the second pilot program through a Request for Applications (RFA) process in spring 2020. Staff recommends extending the term of the existing Pilot Program from May 17, 2020 to July 1, 2020 to allow staff time to develop the second Pilot Program, solicit and select operators, and coordinate a transition period between the two pilot programs in June of 2020. Following the selection of the second shared mobility pilot program operators, staff will solicit proposals through a Request for Information (RFI) to explore new potential partnership, ownership, and revenue models for Breeze Bike Share system, which terminates in November 2020.

 

Background

 

In September 2017, shared e-scooters were introduced by a private operator in Santa Monica. The new shared micro-mobility devices (e-scooters, e-bikes, etc.) provide lower-emission mobility options for short trips around town. Santa Monica engaged with these new devices because of their potential synergy with community goals to reduce transportation emissions and congestion, and to improve access to daily needs in Santa Monica. On June 26, 2018 (Attachment A), Council approved the creation of a shared mobility pilot program to develop a new area of policy, regulation, operation and enforcement for shared mobility devices in Santa Monica. Many improvements have been made during the first pilot program, however, challenges remain in managing the streets and sidewalks, encouraging public safety, adapting old regulations to new business types, and ensuring companies are accountable for public outcomes. These challenges are amplified by the dispersion and movement of shared mobility devices and the unpredictability of the industry at this time. 

 

Santa Monica’s pilot program was structured to be adaptable to the rapidly changing industry, while allowing staff to test management tools and explore different services, technologies, and partnership structures. The pilot was guided by Administrative Regulations addressing device quantity, distribution, maintenance, safety information, responsiveness to complaints, user education, outreach and equity. The pilot program included fees to recover costs of program administration and code enforcement, and a use of public right-of-way (PROW) fee that has been used to partially fund the painting of green lanes to increase rider comfort and safety.

 

Bird, Jump, Lime and Lyft were selected as operators for the first pilot program that launched in September 2018. Riders took to the shared electric bicycles and scooters right away. Riders generated a total of 2,673,819 trips from October 2018 to October 2019. Riders reported using shared mobility devices to access destinations all over Santa Monica for a wide range of trips including: 29% work-related trips, 26% recreation, 14% eating out, 10% home and 8% shopping, replacing many trips that would have been taken by car, Uber, Lyft or other car service.

 

Early in the first pilot program, staff installed 107 designated shared electric scooter and bike parking zones around the city to help address haphazard parking and normalize parking behavior. Increased device parking enforcement presence in early 2019 further improved operator responsiveness to parking and public space management. Santa Monica was one of the first cities to use geo-fencing technology to keep riders out of prohibited zones, particularly the beach path, which largely eliminated prohibited riding there. The City also implemented an extensive public education campaign about riding rules and etiquette and required operators to provide “in-app” education about the rules at the start of each ride and to perform routine driver’s license verification. Police operations were focused in advance of busy summer holiday weekends to spread knowledge about the safe operation of shared mobility devices.

 

While the operators largely met operational requirements as defined in the Administrative Regulations, these efforts did not always achieve the desired pilot program outcomes especially maintaining reasonably priced rates and access to shared mobility service for all potential users, ensuring riders follow the rules of the road and avoid haphazard parking, and program oversight. The program evaluation identified further needs to: ensure the reliability of shared mobility as transportation by improving access and affordability; strengthen systems and education in order to mitigate sidewalk riding and haphazard parking; balance the City’s needs to effectively oversee and enforce the pilot program regulations on a nascent and ever-evolving industry.

 

On November 12, 2019 (Attachment B), staff returned to Council to present the pilot program outcomes and discuss next steps. Council directed staff to develop a second shared mobility pilot program that reduces the number of operators, maintains flexibility to adapt the evolving industry, and focuses efforts toward ensuring customer reliability, affordability, and access, while improving safety, rider behavior, sustainability, and financial outcomes. Council extended the term of the existing Shared Mobility Pilot Program ordinance (SMMC 3.21) to May 17, 2020 to allow time to develop and transition to the new pilot program (Attachment C). Council also directed staff to explore options to reimagine the city-owned Breeze Bike Share System beyond its scheduled contract termination in November 2020.  

 

Discussion

 

The first pilot program, launched in September 2018, demonstrated rapid adoption, high ridership, and the potential for shared mobility services to help replace short vehicle trips. Although challenges remain to be addressed, the City’s approach of adaptable regulations, collaboration with providers, and enforcement proved to be effective in mitigating some of the undesired impacts like haphazard parking or riding on the beach path or other prohibited areas. The second pilot program will continue successful elements of the first program, complemented by new or revised features to address Council and community priorities.

 

The second pilot program will seek to:

 

·         Continue to offer a variety of shared mobility options to users;

·         Maintain flexibility as the industry continues to rapidly evolve;

·         Focus oversight onto priority areas of reliability, affordability, safety and sustainability; 

·         Modernize management tools and use technology to be more effective and efficient;

·         Continue to increase user awareness of safe and legal behaviors for operating devices;

·         Ensure operators are responsive to pervasive issues and service complaints, and

·         Catalyze industry improvement in devices, technologies, and service that deliver better outcomes.

 

Second Pilot - Program Approach

The second pilot focuses regulatory efforts in areas with clearly defined performance expectations, and seeks to align them with reporting and enforcement processes. This approach narrows the focus but right-sizes regulations to the oversight resources with continued development of technology-based tools for management and enforcement.

 

User behavior change and operator adaptation are crucial components of program success and require a hands-on detailed approach to program management. Reducing the number of operators will enable the program coordinator to focus on productive partnerships and solutions with a more manageable number of parties. Continued investment in education and enforcement are needed to reduce dangerous user behaviors and set clear expectations of safe riding and parking. 

 

The second pilot would be created by the proposed ordinance (Attachment D), which defines basic program procedures including application and selection, and authorizes staff to develop and make adjustments to the flexible Administrative Regulations. Day to day oversight will be guided by the Administrative Regulations. 

 

Second Pilot - Program Structure

1.    Pilot Term: 18 months (beginning July 2020). Formal evaluation of the pilot would begin at 12 months, ending with a report and recommendation to Council for next steps within the 18 months.

2.     New Device and Operations Selection Process: Hold an open, competitive application process to identify the best available devices and system operators to participate in the second pilot. Devices could include pedal bikes, standup electric scooters, electric pedal bikes, electric non-pedal bikes, three wheeled devices, etc. The proposed ordinance defines the selection and appeal processes for the second pilot program. Operators in the second pilot would begin operations on or after July 1, 2020. The City could seek up to 3 operators with experience, a diversity of high-quality devices, systems that reduce sidewalk riding and haphazard parking, a commitment to reliable and affordable access and a demonstrated willingness to work collaboratively with the City. Provision of devices accessible to people with disabilities would be encouraged.

3.    Scale of Program: Allow an initial 3,250 devices total (equal to the existing pilot program cap). Establish two seasonal fleet size caps (peak season and slow season) to adjust the number of devices and operator per device fees for seasonal demand. Seasonal fleet size caps could be adjusted based on a demonstrated sustained fleet utilization.

4.    Progressive Penalty Structure: Operators would be required to comply with all Administrative Regulations and be subject to a clearly defined progressive penalty schedule for non-compliance. The pilot program would establish a progressive penalty structure that defines the terms of escalating penalties for PROW and administrative regulation violations.

5.    Operating Fees: The costs to oversee and enforce the program should continue to be recovered through permit and impound fees. Operators should continue to contribute to investing in capital infrastructure through the PROW fee.

 

Second Pilot – Administrative Regulations

The Administrative Regulations include, but are not limited to, criteria relating to lawful conduct, public safety, data sharing, data privacy, and/or the timely removal of hazards. The pilot would maintain the general structure of flexible Administrative Regulations that define specific system and operating requirements. The Administrative Regulations will be clarified and updated to ensure that staff is effectively able to track and evaluate compliance. Many of the minimum requirements and established expectations of the existing pilot program would remain constant in the second Pilot Program, while other requirements would be removed or clarified to strengthen administrative oversight efficiencies, or added with the intent of achieving better reliability, affordability, safety, equity and sustainability outcomes.

 

Administrative Regulations – New and Revised Elements

Updates to the Administrative Regulations would include, but not be limited to, the following changes specifically targeted toward achieving better administrative efficiency, and reliability, affordability, safety, and sustainability outcomes.

 

1.     Safety and Rider Behavior: Rider behavior has gradually improved over time, especially with more frequent use; however, riders are still becoming familiar with the shared mobility rules and etiquette, and all users of the road are still adjusting to their presence. Through an open procurement process, the City will be able to evaluate and select operators that offer devices with new and advanced safety features and technologies that can help to drive improved rider behaviors. Strengthened parking incentive requirements will reduce occurrences of haphazard parking. Specific safety messaging will be required in apps.

Outcome Targets

Administrative Regulation Requirement Adjustments

A.    More durable devices

A.1 Require certification of detailed maintenance and operations plans

A.2 In selection process, give preference to devices with robust safety features like better kick stand, larger wheel size, hand breaks, etc., and companies with a demonstrated safety record

B.    Reduce occurrences of sidewalk riding.

 

B.1 In selection process, give preference to new devices/system technologies that detect and address sidewalk riding.

B.2 Require specific in-app education messaging content, cadence and format; require acknowledgement of rules by the user

B.3 Set minimum education requirements and number of monthly engagements.

C.    Reduce occurrences of haphazard parking and sidewalk obstructions.

C.1 Require specific parking incentives and rating systems, e.g. $1 off current ride for parking in designated Drop Zone. (NEW)

C.2 In selection process, give preference to devices with “lock-to” capabilities. (NEW)

C.3  In selection process, give preference to operators with customer complaint features on the mobile-app home page

 

2.     Customer Reliability and Access: The cumulative deployment of four operators and frequent ride ends in Downtown created an oversaturation effect and uneven distribution in neighborhoods. By defining and strengthening distribution and rebalancing requirements, the operators will ensure a more balanced availability of devices matched to seasonal demand. Requirements to strengthen connectivity with other modes and discourage spur-of-the-moment service termination will improve riders access and dependability of the systems.

Outcome Targets

Administrative Regulation Requirement Adjustments

A.     Even distribution and access in all neighborhoods throughout the City

 

 

A.1 Establish citywide rebalancing zones and daily rebalancing service levels that must be maintained. (NEW)

A.2 Establish seasonal fleet size caps to better match seasonal demand fluctuations. (NEW)

B.     Connectivity with other modes

 

B.1 Require in-app information regarding other modes of transit. In the selection process, give preference to systems that prioritize non-car options.

C.    System dependability

 

C.1 Require operators to notify the City and customers about service termination 45 days in advance to allow for transition to another operator. (NEW)

 

3.       Customer Affordability: Shared mobility is serving a transportation need but has to remain affordable for regular use and low-income individuals. By establishing a not-to-exceed-fare, giving preference to operators with commitments to fare stability, requiring transparency with regard to fare increases, and expanding low-income offerings, companies will be committed to ensuring affordability for all-users.

Outcome Targets

Administrative Regulation Requirement Adjustments

A.     Affordable rates that encourage shared mobility over other car modes.

A.1 In selection process, give preference to operators who commit to fare rate stability.

A.2 In selection process, give preference to operators who commit to affordable rates through combinations of not to exceed fare prices and low-income rate programs. (NEW)

A.3 In selection process, give preference to operators that offer membership options

B.  Transparency for customers about fare adjustments to better inform transportation decisions.

B.1 Require operators to notify the City and customers 14 days in advance of rate changes. (NEW)

C. Availability and access to Low-Income Programs

C.1 Require specific outreach to disadvantaged communities, clarify education requirements about the number of engagements for disadvantaged neighborhoods.

C.2 Clarify low-income offerings, visibility, and process in-app and on websites.

C.3 Develop low income sign-up and/or ridership targets. (NEW)

C.4 Require non-smart phone un-lock options, like text to un-lock.

C.5 Require payment options for the unbanked, like Pay-near-me.

 

 

4.     Sustainability: The City will select operators with strong commitments to sustainability goals and plans that ensure low-emissions/ energy consumption operations, long device life expectancy, and end of life device recycling practices. Requirements for low-emission maintenance vehicles and device battery swaps will ensure operators are creating more efficient and cleaner operations.

Outcome Targets

Administrative Regulation Requirement Adjustments

A.     Certify that operators are striving for sustainable best practices in their operations.

A.1 Require detailed sustainability plans and certifications. (NEW)

B.     Reduce emissions generated from operations.

B.1 Require devices that are capable of field-swappable batteries. (NEW)

B.2 In selection process, give Preference to low-emission maintenance/ re-balancing vehicles.

 

5.       Administrative Efficiency: Providing high-quality oversight of four operators with 3,250 devices in constant motion is resource intensive. Staff will develop more streamlined Operator reporting processes to enable better tracking education, outreach, equity, customer service requirements. Having a better-defined progressive enforcement structure, and technology-based tools would improve outcomes and empower companies to resolve issues before they become critical.

Outcome Targets

Administrative Regulation Requirement Adjustments

A. Reduce the number of operators and ensure partnership with the best providers and best devices

A.1 Select up to 3 operators through a competitive application process. (NEW)

A.2 Establish tiered fees and fines for non-compliance. (NEW)

 

 

Administrative Regulations – Continued Elements

Operators would continue to be required to do the following:

1.     Minimum Vehicle Standards and Maintenance: Meet minimum vehicle component standards including durable brakes, lights, hardware, and rider safety information. Require maintenance and safety history reports and strengthen certain aspects of vehicle standards to include specificity around messaging, location and size of company contact information and vehicle ID, etc.

 

2.     System Operations and Technology: Provide adequate ground operations teams to rebalance the systems, respond to complaints, and ensure a high level of maintenance. Devices must continue to be use speed reduction/geofencing technology to ensure compliance with protecting prohibited riding areas and encouraging appropriate parking behavior. Operators must continue to report using the current version of mobility data specifications (MDS).

 

3.     Deployment and System Operations: Comply with deployment, parking and response requirements; including but not limited to: not impeding ADA access or creating hazards; not deploying less than 18 inches from the curb face; not blocking transit stops, parking meters, fire hydrants, or loading zones; and responding to city complaints within 2 hours of receiving notice. Operators would continue to be required to implement operations changes as directed by the City during special events and emergencies.

 

4.     Customer Service: Provide 24-hour customer service emergency response number and allow users to submit notifications through mobile-applications. Strengthen customer service requirements to include specific size and location of customer service number on the devices, provide easier access for community members filing complaints, and submit monthly reports on the timing and content of complaint resolutions.

 

5.     Outreach and Education: Regularly educate riders about safety, rules, and riding etiquette through the mobile-application and on-device messaging. Operators must continue to regularly deploy outreach and engagement teams to educate users about riding safety and rules, and attend and participate in community meetings and events. Strengthen education requirements and reporting protocol to better track impacts. 

 

6.     Data: Comply with all data requirements including providing the City Mobility Data Specification (MDS) and General Bikeshare Feed Specification (GBFS) data application program interfaces (API). Operators must continue to submit monthly reporting on complaints, incidents, and safety, as well as distributing surveys to users every 6 months on behalf of the City.

 

In order to continue to allow shared mobility devices to operate in the PROW, engage permitted operators through a partnership approach, and ensure public safety, administrative oversight, education, data collection/analysis, and enforcement, staff recommends continuing the staffing of a full-time program coordinator and a limited-term Code Enforcement officer liaison for the duration of the second pilot program. Staff also recommends the continued contracting with a third-party vendor for Code Enforcement assistance and ongoing PROW management needs. The third-party vendor would continue to be responsible for periodic drop zone cleaning and assisting Code Enforcement with responding to hazardously parked devices and device impoundment.

 

Permitting Fees

Santa Monica currently collects fees from the shared mobility operators for program cost recovery and for investment in PROW improvements that enable safer device use.

In November 2019, Council directed staff to balance the operators’ financial constraints and considerations, while recovering the City’s operational cost and facilitating investment in the PROW improvements needed for shared mobility use. Staff recommends adjusting the annual operator and per device fees that would pay for the ongoing oversight, engagement, data management, communications, and enforcement, while potentially lowering operator insurance costs and fees.

 

Operators have represented to staff that the City’s current insurance requirements are overly burdensome and requested that the requirements be reevaluated. Over the course of the existing pilot program staff was able to better assess and gauge the risk factors of Shared Mobility in Santa Monica, and identified adjustments to insurance requirements that could help reduce insurance costs for operators. Further, because fewer operators would be permitted in Santa Monica, the selected operators would have more devices in the City, less competition to capture ridership, and potential to generate more revenue than before, which would help them off set their annual operations fees.

 

Staff also recommends continuing to charge operators a PROW fee to continue to invest in the capital infrastructure. On July 24, 2018 Council committed to reimburse the City for the expansion of 19-miles of green bike lanes thought the City with the use of PROW Fee (Attachment F). The City will collect approximately $1.8M from the first pilot program use of PROW fees through June 2020. Approximately $0.4M will remain to be collected in the second pilot program in order to complete the reimbursement as Council directed. Staff recommends continuing to collect a user of PROW fee until the green lane project has been completely reimbursed, which will occur in approximately August of 2020 under the current fee structure of $1 per device per day.

 

Council may consider directing staff to adjust the use of PROW fee to lessen the financial impacts on the operators, while continuing to contribute to capital infrastructure. One way to do this would be to adjust the fee annually with the seasonal device cap fluctuations, which could reduce the burden of per device fees during periods when ridership and revenue are lower through winter months. Another option would be to require the operators to charge an additional nominal fee to the riders on every trip. This option could lessen the operator costs, but would increase the cost to users and potentially discourage ridership. Council could also direct staff to eliminate the use of PROW fee completely after reimbursement for the expansion of the green-lanes is complete. This option could lower the costs for operators, but would also eliminate revenue funds that could support ongoing infrastructure investments that can improve safety for shared mobility riders. Depending on Council direction Staff could return with a use of PROW fee resolution adjustment with the Annual budget in June 2020.

 

Staff Recommended Fees

Permit

First Pilot Program

Fee Structure

Recommended Second Pilot Program Fee Structure

Annual Operator Fee

$20,000 per operator

$20,000 per operator

Annual Per Device Charge

$130 per device

$104 per device

Use of PROW Fee

$1 per device per day

$1 per device per day (recommended until green lane reimbursement is complete; could be adjusted based on Council direction)

*Selected operators will be required to comply with all State Service and Use tax law. 

 

 

Progressive Penalty Structure

The Administrative Regulations of the first pilot program do not define a progressive penalty structure that could be applied to both PROW violations and administrative regulation non-compliance. The flexibility of the first pilot program structure allowed staff to work with permitted operators to resolve non-compliance with administrative issues, like data management, technology bugs, education messaging., while issuing citations and/or impounding devices for PROW violations, like ADA blockages, improper deployments, and complaint response time. The lack of a defined progressive penalty structure allowed operators to at times slowly resolve important administrative issues or consider PROW violations a cost of doing business. In order to ensure effective penalties and remedy processes for non-compliance, the second pilot program would establish a progressive penalty structure that would define different classes of penalty types and amounts, and enforcement escalations for both PROW violations and administrative non-compliance. 

 

To date the city has collected approximately $0.76M from administrative fines and vehicle impound fees. While this amount is substantial, it is not included in the shared mobility budget forecasts, as it is not a reliable source of revenue. Staff anticipates a reduction in violations, issued citations, and fines with improved operator compliance through the second pilot program.

 

First Pilot Program Extension –to July 1, 2020

On November 12, 2019, Council extended the existing pilot program through May 17, 2020 to facilitate the orderly and timely adjustments to the shared mobility regulations and maintain a continuity of service on the current systems. Staff anticipates that an additional six weeks will be required to allow adequate time for the selection process, including the time to adjudicate any potential appeals. Staff recommends extending the term of the existing Pilot Program from May 17, 2020 to June 30, 2020 to allow staff time to develop the second Pilot Program, develop a new set of Administrative Regulations, solicit and select operators, and coordinate a smooth transition period between the two pilot programs in June of 2020 to minimize disruption to users and City regulatory efforts. Through the course of the pilot program staff would adjust regulations as needed to adapt to market changes and will conduct a structured review of the second Pilot Program in the fall of 2021.

 

Breeze Bike Share

In November 2015, Santa Monica launched LA County’s first shared micro-mobility program, Breeze Bike Share. The City owns the Breeze bikes and operates the system through contracted services. The public ownership of Breeze requires that the City assume many of the responsibilities that come with that ownership, like ongoing capital investment in new and replacement equipment. While most costs for overseeing and enforcing the private shared mobility services are recovered through permitting fees, the ongoing industry evolution could cause instability for users in the future. Whereas the Breeze model has allowed the City to ensure the many benefits of a public bike share system over the last four years, like affordable memberships, low per-minute usage rates, equity programs, outreach efforts, and maintenance standards enforceable through service level agreements (SLAs). However, the arrival of dockless competitors has reduced Breeze ridership and raises the question of its continuing viability.

 

The Breeze Bike Share operating contract and sponsorship contract remains in place until November 2020. On November 12, 2019, Council directed staff to explore options to reimagine Breeze Bike Share and research ways to continue to fund Breeze as the public shared mobility option which could complement private options.

 

In the second pilot program selection process staff intends to give preference to applicants that can achieve some of the current benefits of the public bike share system, including the Citys goals for maintaining affordability, equity engagement, and consistently reliable shared mobility services. If shared mobility applicant offerings do not sufficiently meet these goals, staff plans to solicit proposals for public bike share operation in April 2020. Solicited proposals would explore new potential partnership, ownership, and revenue models for Breeze, and prioritize complementary services to the offerings provided in the second shared mobility pilot program. The City received multiple proposals to operate Breeze, however, it is unknown if a private or non-profit operator would be interested at this time. The market for shared mobility remains very strong in Santa Monica but there are now multiple operators competing in the market, potentially reducing the available revenue. Staff will seek proposals for services that:

·         Complement the services selected through the second Shared Mobility Pilot Program, by potentially offering different device types (including e-bikes and non-e-bikes);

·         Ensure that bike share remains affordable and reliable through monthly, annual, student, and low-income membership options;

·         Provide flexibility to adapt to future market shifts, and

·         Offer a sustainable long-term commitment through contracted services that limit the City’s ongoing capital investment in bikes and equipment, and operating costs.

 

Santa Monica is not alone in exploring methods to reduce financial liability at this time.  Portland (BIKETOWN) and West Hollywood, are releasing similar requests for proposals to explore new models of supporting public bike share systems. Larger bike share systems like Boston, Chicago and LA Metro, in contrast, are continuing to fund public bike share systems under original operating agreements as a complement to private services.

 

Staff has explored the option to participate in the Metro Bike Share program. Cities are required to pay 50% of capital costs and 65% of net operating costs after revenue and sponsorship. User revenue recovery is currently low, and there is no system sponsor, so this option is anticipated to require a multi-million dollar upfront investment and on-going cost to the City; more than another potential option structured similarly to Breeze. Currently, the City of Los Angeles is the only remaining partner City operating the Metro Bike Share System.

 

Funding opportunities for public bike share systems have also drastically changed. Grants from Metro and the Air Quality Management District grant obtained in 2011 funded the initial Breeze bike purchase and system launch, and program operations are majority funded through user fees and sponsorship revenues from Hulu. As directed by Council, staff explored different state, local, and non-profit grant funding for public bike share systems and found limited options that could provide ongoing capital reinvestment and operations support for the Breeze Bike Share system. California Air Resources Board, Caltrans, and Metro offer potential funding sources for pedestrian and bicycle projects generally, however funds would only cover the capital cost of bikes/ equipment and the City would still be responsible for paying the ongoing operations cost of the program. Because of the emergence of private sector shared mobility options, it is unlikely that granting agencies would prioritize and award grants to bolster existing public bike share programs like Breeze. Further, the grant cycles and award timelines for most grant funds require a number of years to activate the resources, which would create significant gaps in service for the Breeze system. Through an RFI process staff would better understand the potential partnership, ownership, and revenue models for Breeze, which would inform the options for continuing the program.

 

Next Steps

·         Draft Administrative Regulations for the second Pilot Program;

·         Advertise the Pilot Program Request for Applications, select and notify the Pilot Program operators;

·         Refine compliance and enforcement protocols, and develop reporting and tracking tools;

·         Establish regular communications with partner operators, and systems for information sharing among Code Enforcement and Mobility staff; 

·         Plan transition between existing pilot program operators and operators selected to participate in the second Pilot Program;

·         Issue Vendor Permits for FY 20-21 to applicable operators;

·         Release RFI for Breeze Bike Share proposals, and

·         Evaluate the program and return to Council with recommendations for next steps beyond 2021. 

 

Financial Impact

The second, 18-month Shared Mobility Pilot Program ending in December 2021 will require an appropriation of $274,524 in FY 2020-21 and $137,262 in FY2021-22 for staffing and program costs, for a combined total of $411,786. The program will generate estimated revenues of $0.58M over the 18-month period in operator and per device fees to fund staff and program expenses, and $1.8M in use of PROW fees to complete the reimbursement for 19-miles of green lanes and other infrastructure projects unless Council directs staff to adjust or eliminate the use of PROW fee. Additional revenue may also come from enforcement fines, however, fines are not easily predictable. Staff will return to Council in February with specific budget actions as part of the FY 2019-20 Mid-year budget and in the spring of 2021 for future year funding.

Meeting History

Jan 28, 2020 5:30 PM  City Council Regular Meeting
draft Draft