Does L.A.’s Deal with CBS/Decaux Make Bike Nation’s Plans D.O.A.

While New York City is enjoying the successful launch of CitiBike, the nation’s largest bike share system, Los Angeles is still waiting for Bike Nation to begin installation of the 4,000 bike bike share system it promised at the April 2012 CicLAvia. The system was supposed to begin operation last winter, and then last April, but there is still no announcement for when the system will begin operation.

While the world laughs at the over the top, and really really over the top, media coverage of CitiBike, news reports on the West Coast have been more subdued about Bike Nation. In fact, the only recent coverage in a mainstream publication is an editorial in today’s Daily News, which admits that it doesn’t know much about CitiBike, bike share or Bike Nation.

But while we wait for news from Bike Nation, advocacy website Bikeshare.com published a piece today that offers one explanation for the delay: the advertising model that Bike Nation is counting on is not allowed in the city’s ordinance allowing bike share kiosks. In short, the ordinance disallows advertising on the kiosks that will hold the Bike Nation bikes. While Bike Nation refuses to give the specific numbers for its business model, it has stated that kiosk advertising was one of a few revenue streams that it is counting on.

Bikeshare.com explains:

The City also places a number of restrictions on the bike share stations including: No excavation or damage to the Public Right of Way and no permanent structures are allowed to be installed.

No advertising is allowed on non-moving property in the Public Right of Way. This means no street furniture-like advertising is allowed on the kiosks.

Advertising on bikes is required to be painted or decaled on the body of the bike.

Officials with the city and with Bike Nation have yet to comment on the story, or what the ordinance means for bike sharing in Los Angeles. Complicating issues, changing the advertising ban on kiosks is not as easy as just changing the words in a motion.

Los Angeles signed a Street Furniture Contract in 2001 with CBS/Decaux allowing the advertising giant the exclusive right to advertise in the public right of way. Whether Bike Nation didn’t fully understand the contract, or thought they would be able to get around it, is not known. However, the officials with City Planning that drafted the ordinance obviously disagreed.

One city staffer, speaking on background because he is not a spokes person, holds up the bike share ordinance as a model for permitting bike share kiosks that is open to all vendors, is consistent with the City’s contractual obligations with CBS/Decaux. While initial press reports of the deal between Bike Nation and the City focused on a non-existent “exclusive” deal between Los Angeles and Bike Nation, it should now be clear what Streetsblog initially reported is true. There is no exclusive deal. If another company can do a better job than Bike Nation, the opportunity is there.

Whether or not Bike Nation can make bike share work in Southern California based soley on advertising has been a hot topic of debate on Streetsblog and among advocates across America. Whether they can do it without advertising revenue from kiosks seems a long shot, unless they can replicate what New York and Alta Bike Share accomplished in New York: find a major investor willing to underwrite the entire system.

AEGBikes, anyone? It’s sort of the exact opposite of OccupyBikes.