Bublr’s decision earlier this year to deviate from the traditional bike share pricing structure by axing late fees and annual memberships appears to be paying off in more ways than one.
The Milwaukee bike share system launched in August 2014 with a pricing structure similar to that of existing bike share systems. Rates started at $7 for a day pass, which granted the customer unlimited 30-minute trips for 24 hours and subjected them to overage fees for exceeding that window. Monthly and season passes were also available.
People were confused. The prevailing feedback was that customers felt they were being duped into paying overage fees. Many thought “day pass” inherently suggests all-day unlimited access, not an “unlimited 30-minute trips in a 24-hour period pass.”
Bike share systems can generate a solid amount of revenue off overage fees, but not if they refund much of it back to unhappy customers. Executive Director Kevin Hardman reports that in that first season the bike share returned 6 to 7 percent of revenue to customers who were confused by the walkup pricing structure. So, when they closed down the system for winter, the staff spent a lot of time evaluating what customers want and expect during those all-important walk-up trips.
“What we are selling with bike share is ease, simplicity and convenience,” says Hardman. “When you have that big of a percentage of customers who are confused, that’s undermining the tool. I couldn’t see us continuing with that structure.”
Their solution was to only offer two options: a $3 single-ride that covers 30 minutes (with each additional 30-minutes costing another $3) and a 30-day recurring pass for $15 that covers unlimited 60-minute trips. They debuted the new pricing structure in March at the beginning of its second season.
The result: The percentage of revenue refunded to customers confused by the walkup pricing structure dropped dramatically—down to zero.
“That is a profound change for us,” says Hardman. “We still have customer issues, and we’ve returned money for other reasons, but not over confusion about the pricing structure. It’s been tremendous.”
Not only has the change boosted customer satisfaction, it also means Bublr has one of the lowest—if not the lowest—cost of entry of any bike share system in the country. Hardman sees this as a boon for the system’s equity efforts, which it announced it will begin ramping up this year. He believes most people will at consider shelling out $3 to try a new form of transportation once.
Bublr is only midway through its first full season, but Hardman says the system has not seen a noticeable decline in revenue with the new pricing structure.
“We did wonder if there would be a drop, but so far we have seen revenue that is consistent or maybe even larger,” says Hardman, before adding the caveat, “though we know we don’t have a long track record which to compare. We do think it’s inspiring more people to ride.”
The Better Bike Share Partnership is a JPB Foundation-funded collaboration between the City of Philadelphia, the Bicycle Coalition of Greater Philadelphia, the National Association of City Transportation Officials (NACTO) and the PeopleForBikes Foundation to build equitable and replicable bike share systems. Follow us on Facebook, Twitter and Instagram or sign up for our weekly newsletter. Story tip? Write email@example.com