Recently, the Calgary Economic Development launched an Ideas Contest in partnership with local firm Chaordix as part of their #LoveYYC campaign.
They asked Calgarian's to submit their ideas for a five-year business plan that would have a significant positive impact on Calgary’s job opportunities and communities. Their criteria were as follows:
Imagine you've won the lottery and want to invest a significant portion of your winnings into Calgary’s economy.
You can either:
- start your own company
- invest in an existing company/industry
- or acquire a company from another city and move it to Calgary
Your goal is to get a maximum return on your investment over the next five years while having a positive impact on Calgary’s job opportunities and communities. How would you invest your lottery winnings?
As a lover of all things YYC, I decided to put together a proposal for a business that I think is long overdue here in Calgary – a public bike share system.
We shall see if my proposal gets selected, but in the meantime (and for entertainment purposes) here is the proposal I put forth. Thoughts?
GreenCycle Calgary was selected as the winner of:
'BEST NEW COMPANY'!
GreenCycle is a bicycle sharing system in which bicycles are available for shared use on a short-term basis, allowing users to borrow a bike from Point A and return it at Point B.
GreenCycle rental stations are located at strategic locations around the downtown core and surrounding neighborhoods including Bridgeland, Inglewood, Kensington, Sunnyside, the Beltline, Marda Loop, 17th Ave., Mission, and East Village.
GreenCycle stations in the downtown core are strategically located along bike paths as well as Calgary's cycle track system.
Calgary's GreenCycle differs from other bike share systems by allowing users to select a local charitywith which proceeds are shared. Proceeds are distributed with the help of local firm Benevity.
GreenCycle bike sharing serves as a catalyst for a fundamental transformation in thinking and behavior by operating a bike sharing system in Calgary to enhance mobility while promoting all aspects of sustainability, including quality of life, equity, the environment, economic development, and public health.
- Increase Calgary's bicycle commuting population to 10% of all commuters by 2022. Currently 1.75%.
- 1,200 bikes and 75 bike share stations across downtown and surrounding neighborhoods within 5 years.
- Based on a ratio of 0.01 bikes per user. Ratio determined as per comparable case studies.
- Complement and integrate with Calgary's comprehensive metropolitan transportation system.
- Encourage the replacement of short car trips for recreational, social and functional purposes.
- Serve a broad spectrum of transportation users and needs.
- Contribute to Calgary becoming the healthiest and greenest city in Canada.
- Advance the perception of cycling as a utilitarian mode of transportation.
- Solidify GreenCycle as a modality option in Calgary's transportation landscape.
- Be an efficient, safe, and reliable system that has bikes in the right place at the right time.
Revenue Model & Pricing
GreenCycle Calgary will cost $1.8 million in initial setup costs, after which a variety of revenue flows will maintain the GreenCycle system.
GreenCycle memberships are available to Calgary residents at a cost of $99 per year. Residents can signup online or through the free GreenCycle app by verifying their address and associating a credit card with their account.
GreenCycle student memberships are available at a cost of $49 per year.
A GreenCycle membership entitles Calgary residents to unlimited 30-minute rides, after which a discounted rate of $5 for each additional 30-minutes is charged.
Tourists and visitors to Calgary have 3 available options:
- 24-hour pass for $12.50 that allows unlimited 30-minutes rides in a 24-hour period, after which they are charged $7 for each additional 30-minutes.
- 48-hour pass for $20 that allows unlimited 30-minute rides, after which they are charged $6 for each additional 30-minutes.
- 72-hour pass for $28 that allows unlimited 30-minute rides, after which they are charged $5 for each additional 30-minutes.
- GreenCycle will partner with Tourism Calgary to promote the awareness and pre-purchase of visitor passes prior to arrival in Calgary.
- Visitors may also pre-purchase a GreenCycle pass while traveling aboard WestJet flights via the WestJet Connect onboard entertainment system.
Calgary-based companies may purchase corporate memberships for their employees. There are several corporate membership options available for GreenCycle:
- Individual corporate memberships at a discounted rate of $79/year/employee.
- Corporate 10-pack: 10 annual memberships, $690/year.
- Corporate 20-pack: 20 annual memberships, $1,180/year. Additional memberships available at a discounted rate of $59/year/employee.
- GreenCycle will partner with the Calgary Economic Development as well as the Calgary Chamber of Commerce to provide additional benefits and incentives for local businesses.
Sponsorship revenue: advertising on GreenCycle bikes as well as docking stations is available and will account for approximately 32% of GreenCycle's income, as outlined below.
- Membership fees – 46%
- Sponsorships – 32%
- Usage fees – 16%
- Grants & Contributions – 6%
Projected Membership Growth (5-year target)
According to the 2016 Census 1.75% of Calgarian's ride a bike to work. This equates to approximately 22,155 people (source).
GreenCycle's goal is to increase Calgary's bicycle-commuting population to 10% of all commuters by 2022, or 126,600 commuters. To achieve this 5-year target GreenCycle will adhere to the following projected growth targets:
- 2018: 15,000 total memberships;
- 2019: 23,250 total memberships (55% y/y user growth);
- 2020: 35,107 total memberships (51% y/y user growth);
- 2021: 51,959 total memberships (48% y.y user growth);
- 2022: 75,340 total memberships (45% y/y user growth);
- 2023: 106,983 total memberships (42% y/y user growth).
With the goal of 10% of all commuters using some mode of bicycle transportation by 2022, this would require GreenCycle to generate 106,983 memberships by January 1st, 2023.
Combined with the existing 22,155 commuters who already ride their bike to work, this would equate to approximately 129,138 bicycle commuters or approximately 10.20% of the population, effectively reaching our goal.
Additional Notes on Memberships:
Offering unlimited 30-minute rides for local residents encourages signups and the use of the GreenCycle bike share system, reducing the amount of automotive traffic and subsequent pollution in our city during the summer months.
Offering a variety of visitor pass options reduces the amount of automotive traffic and pollution from tourists while giving them an affordable way to move around the city.
By the year 2023, GreenCycle Calgary will generate approximately $10.6M in annual membership revenue, in addition to all other forms of revenue.
Operating expenses will remain consistent at approximately $2M annually.
Community Investment, Operating Expenses & Employment Opportunities
GreenCycle proceeds are divided three ways:
- 70% of proceeds are invested back into the maintenance of the GreenCycle system, including:
- Depreciation & amortization – 33%
- Staff/payroll – 33%
- System maintenance – 16%
- Warehouse & storage facility rent – 7%
- Insurance – 5%
- Transportation vehicles – 4%
- Other – 2%
- 20% of proceeds are distributed to the City of Calgary to help maintain and expand bike-lane infrastructure.
- 10% of proceeds are distributed among various local charities as dictated by GreenCycle members; i.e. upon signup, members are asked to choose a local charity of their choice. 10% of all GreenCycle proceeds will be distributed equally, on a monthly basis, among the various charities as dictated by members.
- GreenCycle Calgary will contract local firm Benevity to help distribute all charitable proceeds.
System & infrastructure growth will be determined annually based on usage statistics from the previous year. GreenCycle stations can vary in size to accommodate additional bikes at certain "hot spots" around the city.
As per GreenCycle's projected membership growth (outlined in the previous section), GreenCycle anticipates the following rate of expansion and infrastructure development to successfully accommodate annual user growth (based on an average of 16 bikes per station):
- 2018: introduce 240 bikes across 15 stations;
- 2019: 304 additional bikes and 19 additional stations;
- 2020: 384 additional bikes and 24 additional stations;
- 2021: 160 additional bikes and 10 additional stations;
- 2022: 112 additional bikes and 7 additional stations;
- 2023: 1,200 total bikes across 75 total stations.
By January 1st, 2023, GreenCycle plans to reach its goal of 1,200 bikes, 75 bike-share stations, and 10% of all commuters using a bicycle.
GreenCycle Calgary will employ approximately 25 full-time staff members along with the hiring of additional part-time, seasonal staff members to help rebalance bikes during the summer months.
Environmental Impact: Supporting Arguments
Many Calgarians have given the cycle tracks a try, with over 17,100 bicycle trips in and out of the downtown core per day, The City has seen a 40% increase in Calgarians arriving by bicycle since the cycle tracks were installed.
More bikes can equal fewer cars, which leads to a reduction in greenhouse gases and an improvement in local air quality.
- Source: The economic contribution of public bike-share to the sustainability and efficient functioning of cities.
In 2016, the City of Denver reported the following environmental & economic benefits as a direct result of their bike share system. Given the similarities between Calgary and Denver in both size and population, GreenCycle estimates similar environmental results:
- Estimated pounds of CO2 emissions avoided – 1.5 million.
- Estimated gallons of gasoline not used – 76,500.
- Estimate gasoline savings ($) – $172,000.
- Estimated pounds of NOx avoided – 16,200.
- Estimated pounds of VOCs avoided – 30,100.
GreenCycle supports new developments and allows sites to add new jobs without creating additional pressure on parking spaces or local roads.
Washington DC Capitol bike share has saved its residents hundreds of millions of dollars in time savings by cutting congestion by 4%.
Economic Impact: Commercial & Retail Activity – Proven Case Studies
75% of Calgary merchants surveyed reported that the city's cycle tracks brought them a similar number of, or more customers daily.
A 2008 study undertaken by Australian urban planning researcher Alison Lee compared the economic contributions of cyclists to drivers in Melbourne’s shopping strips. Lee found that drivers spend more than cyclists per hour, an average of $27 compared to $16.20. However, since 6 bikes can fit into a single car parking stall, the potential payout for that space is $97.20 per hour if converted to bike parking. Lee argued that there would be an economic gain to converting more car parking to bike parking.
- Source: What is the Economic Contribution of Cyclists compared to Car Drivers in Inner Suburban Melbourn’s Shopping Strips?
A separate study undertaken at the University of Portland in 2012 found that, although cyclists do indeed spend less per trip, they make more frequent trips, resulting in a higher average monthly spending than people in cars.
Researchers at the City University of New York undertook a study in 2013, analyzing the specific economic impacts of converting curb space from on-street car parking to public bike share docks. The authors examined reported usage patterns of 7 bike share stations in different New York City neighborhoods, which held a total of 283 bikes, generated an average combined total of 587.3 trips per day, and replaced 41 automobile parking stalls. By comparing the usage frequency of bike share docks to car parking stalls, and the average spending patterns of each user, the researchers estimated that the conversion of 20 feet of curb space to a bike share facility has the potential to increase commercial spending from $219.65 per day to $334.06 per day, an increase of $114.41.
A recent study conducted by the European Cycling Federation concluded the following economic benefits among European cities with bike share systems:
- 70% of businesses reported a positive impact on their neighborhood after launch;
- 20% of businesses and 23% of users reported a direct impact of spending from bike share; cyclists spend more money in city centers than those traveling by car;
- The study reported an extra spend of US$1.20/user/week in proximity to bike share stations;
- Visiting cyclist spends on average £25/day locally compared to a car-borne visitor’s £7.30, as cyclists can’t always carry what they need with them and feel hungrier from exercising;
- Bike share draws visitors to tourist attractions through a fun, flexible, fast and affordable travel mode. E.g. leisure cycling on Liverpool’s waterfront and Belfast Titanic quarter;
- 16% reported spending in new locations due to the accessibility of a new bike share station;
- Bike share introduces people to cycling and complements people riding their own bike. With an increase in bicycle sales, 9% of respondents to the UK survey stated they purchased a bike.
A 2014 research study examined 140 businesses within 0.1 miles from a Capital Bike Share station in the Washington, D.C. area. The research concluded that business owners and managers had a generally positive attitude toward public bike sharing. 70% reported a positive impact on neighborhoods due to greater access to these areas. In addition, 16% of bike share users reported that they engaged in new spending at these neighborhood businesses because of the access provided by bike sharing. In short, for both businesses and consumers, bike share systems seem to have a positive effect on business activitydue to increased accessibility within local neighborhoods.
GreenCycle will procure the services of local bike shops to help conduct maintenance and support on the fleet, thus further reinvesting into the local economy.
Off-season (December to February)
Due to dangerous riding condition (i.e. snow and ice), GreenCycle Calgary will suspend service between December 1st and March 1st. During this time all bicycles will be collected and brought to a central storage facility for maintenance and repair.
During the off-season, GreenCycle membership holders will receive 25%-off Calgary Transit monthly passes and individual fares.
GreenCycle members also receive a free Car2Go membership with 10 free minutes per month, to be used during the off-season.
Additional Membership Perks/Benefits
GreenCycle members get a 2-for-1 beer voucher once per month to be used at participating local breweries.
GreenCycle members receive 50%-off the purchase of an All Access Pass for YYCBeerWeek.
GreenCycle members receive special discounts at participating local retailers, including food, clothing, bike accessories, event tickets, and much more!
Building the case for GreenCycle Calgary: supporting a HEALTHY city
Reduced expenditure on healthcare: the World Health Organization reported that inactivity, and the health issues related to it, creates a significant cost to developed countries. Therefore, offering city dwellers a transportation method that also provides physical activity could benefit the economy by providing savings on healthcare.
The WHO also suggests that cycling to and from work can contribute to a more personally productive workday, since the exercise is done in association with work, as opposed to exercise done during leisure time.
While the economic effects of bike sharing’s health benefits are of course difficult to quantify, the research indicates that, overall, using an active method of commute like biking, even for a short time each day, can lead to a healthier population, and therefore a healthier, more productive workforce.
Burn calories: In 2016, the City of Denver estimated it’s citizens rode 755,400 miles using its bike share system. As a result, Denver citizens burned approximately 22.6 million calories!
More efficient cities create more effective economies: After analyzing data and conducting surveys among users of Dublin’s bike share system dublinbikes, researchers concluded that the integrative and time-saving qualities of bike sharing are the clearest example of how these schemes can benefit a city’s economic culture.
By making work commutes more efficient, cities and urban economies ultimately become more productive.
The research frequently points to bike sharing not as a stand-alone method of transit, but as a criticalconnective element of urban mobility. Bike share systems address capacity constraints in cities by decreasing journey times and increasing workers’ access to the city, including so-called “last mile-first mile” trips. Giving workers greater and more time-efficient access to the city can, the authors conclude, provide improved access to more suitable or higher-paying jobs. In short, removing certain mobility constraints can allow for greater participation in the urban labor force.
In addition, the presence of bike share schemes can make the workday itself more productive. The authors refer to “in-work trips” such as those to and from meetings within the city center, where the time savings offered by biking “can be used productively as working time.”
The article also discusses the concept of agglomeration, which is the collection of businesses, industries, and government operations in close proximity to one another in the city center. This compactness allows for more efficient economic activity, and bike sharing is a cost-and-time-effective way to provide mobility within these dense economic centers. This fills a difficult gap in city-center transportation. By allowing economic players to collaborate more effectively, bike sharing enhances the city’s economic productivity.
- Source: Craig Bullock, Finbarr Brereton, and Sive Bailey. “The economic contribution of public bike-share to the sustainability and efficient functioning of cities.” Sustainable Cities and Societies. Vol. 28, January 2017, pages 76–87. https://ntl.bts.gov/lib/51000/51900/51965/VT-2013-06.pdf
Bike share systems provide greater transportation options, including filling the gaps of other transit methods. They also grant greater access to neighborhood and city-center business activities. Overall, research shows how the improvements to urban mobility offered by bike sharing helps to create a healthier workforce and a more interactive, competitive economy.
Public bike share has seen explosive growth worldwide in the past 10 years, and the momentum shows no signs of slowing. As of June 2017, there were nearly 900 public bike sharing systems in more than 50 countries across 5 continents, operating over 1,000,000 bicycles at more than 37,500 stations! While the naysayers will always remain, the evidence is speaking for itself, and cities are listening.
Please join the movement and help Calgary further solidify its place on the world stage as a healthier, cleaner and more economically efficient place to live and work.