The rapid rise of venture capital-funded dockless scooters and bikes has prompted the city of Santa Monica to reevaluate its bike share program, which is losing ridership and revenue to the private companies the city has allowed to operate here.

The city council discussed Tuesday whether Breeze Bike Share should avoid obsolescence by adopting the dockless, electric model created by private companies or offering another type of vehicle for people who don’t use scooters and bikes. The council also discussed contracting with a private company to operate Breeze.

Breeze allows riders to rent non-electric bikes for 12 cents per minute or for a monthly or annual fee. Its private competitors charge a $1 unlock fee and 23 to 30 cents per minute.

The city launched the program in 2015 and integrated it with similar systems in Beverly Hills, West Hollywood and UCLA last April to give users access to bikes across the region.

Breeze is sponsored by Hulu, which is headquartered in the city. The company has committed to provide about half of the program’s funding through next November. User fees have historically covered the other half of Breeze’s operating budget.

When the city launched the Shared Mobility Pilot Program last September, giving four scooter and bike companies license to operate in Santa Monica, officials said the program was intended to build on Breeze’s success.

Instead, the widespread adoption of dockless, electric devices has depressed Breeze ridership and the revenue the City collects from the program. 212,175 trips were taken on Breeze bikes in 2018, one-third fewer trips than the year prior. The city lost $6,130 on the program in 2018 after it earned $316,769 in 2017.

If ridership trends continue, Breeze will require $255,000 in subsidies to continue operating through next November, said Kyle Kozar, the pilot program coordinator.

“The market share for Breeze has shrunk to 3% of the paid micro-mobility trips,” Kozar wrote in a report on the future of micro-mobility in Santa Monica. “This forces the question of whether continuation of the Breeze model justifies increasing financial subsidies.”

Kozar cautioned, however, that eliminating Breeze and rendering the city dependent on private companies that have yet to turn a profit could be risky. The operators could shut down suddenly or sharply increase prices, as all four companies allowed to operate in the city did this year.

“The business model of how to generate revenues sufficient to continue operations without ongoing losses that require continued, and generally increasing, investor subsidies, is not yet clear,” Kozar wrote.

He added that most public bike share systems, like bus and train systems, require an ongoing subsidy.

“Despite the need for subsidies, many other cities continue to operate and invest in bike share programs,” Kozar wrote.

Several council members said they think the city could boost ridership by partnering with a private company to make the Breeze fleet electric and dockless.

“Electrifying that fleet and taking away the docks will certainly improve the program,” said Councilmember Greg Morena. “I think we need to reimagine Breeze in that way, but I don’t know if it’s necessarily our job to do. If there are better operators out there … great, let them operate it.”

Mayor Gleam Davis raised the idea of offering adult tricycles with storage compartments to serve people who feel uncomfortable riding scooters and bikes or those who want to transport groceries without a car.

“Is there a way to tailor Breeze to specific parts of our community?” Davis said. “We could imagine what modes these transit companies are not providing.”

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