Boulder & Denver bike-share: boon or boondoggle?

B-cycle is Boulder’s new bike share program. Denver’s B-cycle program is a year old. Does “B” stand for boon or boondoggle?  The Boulder program’s start-up costs included half a million dollars taken from taxpayers: half collected by the City of Boulder, half from federalstimulusfunds.  Denver B-cycle received $210,000 from the “stimulus.”  Yes, B-cycle’s bikes and technologies do sound impressive. But if it’s a true boon, then it should have been able to raise sufficient start-up funds from investors, sponsors, and donors.

Some might argue that private funding could not have built B-cycle. But as economist Henry Hazlitt would say, B-Cycle “has in fact been built by private capital – the capital that was expropriated in taxes.”  We won’t see the goods, services, and non-profit ventures that never materialize because governments took money by force from people who would have spent it differently.

Potentially expensive bike maintenance may deter private investors from investing in bike-share ventures. As law professor Steve Clowney describes: “No individual bears a significant portion of the costs if they damage a bicycle … users have little incentive to take care of the bikes.”  The New York Times reports that sustaining Paris’s bike-share requires the repairing “some 1,500 bicycles a day,” or seven percent of its fleet.

Or maybe Montreal’s experience deterred investors. Because of high start-up costs, “the non-profit agency that runs the city’s bike-rental program … is running a $31.7 million deficit,” reported the CBC.

Voluntary donations, sponsorships, and investments should fund B-cycle. It should be a revenue source for Boulder and Denver, not an expenditure of taxpayers’ money. For example, they could charge B-cycle for placing “B-stations” on city-owned land.

A version of this article was published in the Boulder Daily Camera on May 21, 2011.

Thanks to Marc Scribner at the Competitive Enterprise Institute for his post on Washington DC’s bike-share program.

The Henry Hazlitt quote is from his excellent book, Economics in One Lesson, which the Foundation for Economics Education has put on-line.

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3 Comments

Filed under economics, published

3 responses to “Boulder & Denver bike-share: boon or boondoggle?

  1. Allen G

    Not that I’m a fan of spending taxpayer money on these programs but $210 million for B-Cycle sounded insane.  It was $210,00.

    Speaking of taxpayer money, how does the writer at the Daily Camera write that $210,000 was granted to the program and then a couple paragraphs later write that no taxpayer money went to the program?  

    And that doesn’t even touch on to non-cash taxpayer contributions that you eluded to.   And of course after all that help, B-Cycle still only serves it’s key voting class and not “unimportant” neighborhoods where this program would do a lot more good than helping out a bunch of middle class folks that can afford a bicycle.

    “That group received $210,000 in federal stimulus money last year,”Read more:Denver beats Boulder to public bike-share program – Boulder Daily Camerahttp://www.dailycamera.com/news/ci_14998719#ixzz1NlDijQNDDailyCamera.com

    • Anonymous

      Woah, thanks for catching that error, Allen!  I just corrected it. 

      The Camera article said “No taxpayer money will be used in the Denver program.” Note the future tense, which does not rule out tax dollars already spent. I think saying “No *more* taxpayer money…” would have been better.

  2. Allen G

    Not that I’m a fan of spending taxpayer money on these programs but $210 million for B-Cycle sounded insane.  It was $210,00.

    Speaking of taxpayer money, how does the writer at the Daily Camera write that $210,000 was granted to the program and then a couple paragraphs later write that no taxpayer money went to the program?  

    And that doesn’t even touch on to non-cash taxpayer contributions that you eluded to.   And of course after all that help, B-Cycle still only serves it’s key voting class and not “unimportant” neighborhoods where this program would do a lot more good than helping out a bunch of middle class folks that can afford a bicycle.

    “That group received $210,000 in federal stimulus money last year,”Read more:Denver beats Boulder to public bike-share program – Boulder Daily Camerahttp://www.dailycamera.com/news/ci_14998719#ixzz1NlDijQNDDailyCamera.com

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