Title
Comprehensive Micromobility Program
Description
This report provides information to the Transportation, Infrastructure and Planning Subcommittee on the Street Transportation Department's development of a Comprehensive Micromobility Program.
THIS ITEM IS FOR INFORMATION AND DISCUSSION.
Report
Summary
The Street Transportation Department (Streets) is exploring the feasibility of a Comprehensive Micromobility Program to address the growing demand for a micromobility transportation system and additional mobility options in the City of Phoenix.
Background
The Federal Highway Administration is advancing research on the rapidly evolving field of micromobility and defines micromobility as, "…any small, low-speed, human or electric-powered transportation device, including bicycles, scooters, electric-assist bicycles (e-bikes), electric scooters (e-scooters), and other small, lightweight, wheeled conveyances." Micromobility initiatives and programs have increased in cities nationwide, primarily due to the deployment of shared fleets by private companies, and have become a popular transportation option for many users.
In early iterations of micromobility efforts nationwide, a small number of cities began operating docked bike share programs. Phoenix followed suit in November 2014 with the introduction of the GRID Bike Share program within the central City, which enjoyed great success initially but eventually resulted in the vendor electing to cease operations in Phoenix in December 2020, citing a drop in demand and a changing landscape in the micromobility industry. By 2017, dockless bike share programs emerged as an alternative to station-based (docked) bike share systems. Due to backlash from the public, who saw the proliferation and scattering of these bikes as a public nuisance and eyesore, cities began strongly regulating or even prohibiting dockless bike share systems within their jurisdictions. In 2018, e-scooters entered the micromobility market in a similar manner as dockless bikes. Although very popular with some residents, this newest iteration of shared micromobility came with a host of issues, including safety concerns for riders and non-riders. Similar to dockless bikes, there were public nuisance and eyesore issues, primarily due to improperly parked e-scooters blocking pedestrian pathways, which has been especially hazardous to the disabled community.
Currently, e-scooters are the only micromobility option in Phoenix, with the launch of the Downtown Shared Electric Scooter Pilot Program (e-scooter Program) in September 2019. This e-Scooter Program allows companies to operate a shared e-scooter service on City streets within downtown Phoenix under a permit-based program. Most recently, in March 2021, Council approved an extension of the Program through March 31, 2022, to support micromobility options in downtown Phoenix while allowing staff time to explore a more comprehensive program to include additional choices, including the possible return of pedal-powered bike share.
Downtown Shared Electric Scooter Pilot Program Update
From initial launch to the most recent extension, Streets staff has worked with the e-scooter industry and its vendors, to monitor, evaluate, and modify the operation of the e-scooter Program, including the fees to ensure the program is cost neutral to the City.
During the first 12 months of the e-scooter Program, vendors were required to pay a $500 application fee and a $5,000 permit fee. Vendors were also required to pay a surcharge of $0.10 per trip as well as a relocation parking fee of $80 per incident. In April 2021, Council approved a staff-recommended fee increase for the permit fee to $7,500, an increase to the surcharge up to $0.25 per trip and an increase to the relocation parking fee to $100 per incident. Streets established new fees within the Council-approved authority, but set the surcharge fee increase at $0.15 per trip.
During the first 18 months of the e-scooter Program, the City collected $40,333 in application and permit fees, and $55,074 in surcharge and relocation parking fees, providing a total revenue of $95,407 to the City. The City contracted with an e-scooter retrieval company, SWEEP, during the initial 12 months of the e-scooter Program to monitor, report and correct any vendor violations. This contract expired, and the City ended services with SWEEP in April 2021 in an effort to reduce expenses. In lieu of a e-scooter retrieval company's services, Streets staff has instead worked with the two current vendors to hire their own staff to proactively monitor and relocate improperly parked e-scooters. However, the total cost of e-scooter retrieval company's services amounted to $111,110, and Streets' staff cost to administer the e-Scooter Program to date is $63,080, making the City's total investment $174,190 through the first 18 months of the program.
During the most recent six months of operations, which began in April 2021, the City has collected $13,333 in application and permit fees and $5,280 in surcharge fees, providing total revenue of $18,613 to the City. Over the same period, Streets staff provided approximately four hours of program management efforts per week, at a total estimated cost to the City of $15,080.
The e-scooter Program is intended to be cost neutral to the City, and although this did not occur in the first twelve months of operation, Streets has made the necessary changes to make this a reality, as evidenced by the program's revenues and expenses over the past six months.
Comprehensive Micromobility Program
As the City moves from a downtown area e-Scooter Program to a permanent, expanded, and more comprehensive micromobility program, a number of elements of the existing e-scooter Program need to be evaluated. The information below is a summary of research conducted by Streets staff to understand best practices of micromobility programs in various peer cities in order to design a program that best suits the needs of Phoenix. The major focus areas of discussion include operational boundaries, type of micromobility devices, fleet size limits, parking requirements and addressing equity in availability of micromobility options.
Operational Boundaries
Cities commonly institute boundaries to control where micromobility vehicles can operate. Enforcement relies on geofencing technology where Global Positioning System (GPS) technology tracks vehicles and disables them once they leave the operating boundary. Phoenix’s current e-scooter Program boundary is unique in that it only allows riders to operate within a two-square-mile area in the downtown core. In contrast, Chicago allows micromobility vehicles to operate in every area throughout the city except the downtown core. Most other cities allow e-scooters and e-bikes to be used throughout their cities. It is also common for cities to designate “no-ride” zones in high pedestrian traffic areas such as universities and prominent tourist sites where riders are prohibited from riding micromobility devices. In our current e-scooter Program, the City has identified government complexes, Arizona State University Downtown buildings and Margaret T. Hance Park as "no-ride" zones, and are geofenced to not allow riders.
Staff has considered the possibility of expanding the program boundaries as part of a Comprehensive Micromobility Program based on input from the community. A boundary expansion could contribute positively to sustainability and air quality goals due to its potential to reduce single occupancy vehicle usage. In 2020, a national survey of micromobility users suggest that 36 percent of car trips (private and ride share) were replaced by bike or e-scooter share. Furthermore, shared micromobility can complement public transit usage. People are often deterred from using transit due to the long distance at either ends of the trip (first mile, last mile). According to a North American Bikeshare and Scootershare Association survey, 16 percent of all shared micromobility trips were for the purpose of connecting to transit. This suggests that by strategically locating micromobility vehicles near transit stops, a Comprehensive Micromobility Program can be poised to support the overall transportation network and reduce automobile dependence.
Streets staff recommends an appropriate operational boundary expansion to allow for the program to cover and support existing and future light rail alignments with either a one-mile buffer (Attachment A) or two-mile buffer (Attachment B) from those alignments. Even with an operational boundary expansion, the program would still need to consider "no-ride" zone designations, such as parks and government facilities.
Devices and Fleet Sizes
Types of Devices
The current market for shared micromobility is dominated by e-scooters and increasingly e-bikes. Many cities have a program with a mixture of these two options; however, e-scooters make up a strong majority of trips. National data shows that people prefer e-scooters over e-bikes and dockless over docked vehicles. Out of 136 milliion vehicle trips, 96 million trips were dockless. Of those 96 million dockless trips, 86 million were e-scooter trips, versus 10 million e-bike trips.
A number of local community advocates have stressed the need for traditional (pedal-powered) bikes within a Comprehensive Micromobility Program. Recent research has found that traditional bikes are becoming less common in shared micromobility programs in most cities. The introduction of e-bikes has reduced demand for traditional bikes. Most micromobility vendors find e-bikes to be more popular and, therefore, more profitable and have drastically reduced their offerings of traditional bikes. Tacoma, for instance, pursued traditional bikes in their recent solicitation process but only received proposals for e-scooters. Similarly, Denver launched their program with traditional bikes, but as of August 2021, they are no longer offered due to lack of demand. If Phoenix were to pursue a return of traditional bikes for its shared micromobility program, it may be difficult for the City to get vendors to supply them without a potential need to subsidize this aspect of the program. Staff recommends that our Comprehensive Micromobility Program, including any solicitation for vendors, be open for the following micromobility devices: e-scooters, e-bikes and traditional bikes.
Fleet Sizes
Micromobility device fleet size for cities varies considerably, and there is no standard methodology of determining appropriate size. Most cities have taken an iterative approach to arrive at their current cap, but still allow for adjustments. Vendors typically have a better handle on determining the appropriate size, but City-established limitations may still be necessary. Generally, cities dictate maximums and, in some cases, require a minimum number of vehicles to ensure availability and coverage. See Attachment C for a comparison of fleet sizes of different cities.
Parking Requirements
Cities have developed novel approaches and used technological innovations to manage and mitigate parking for micromobility devices. A popular approach is the parking corral system where users must end their rides within designated, marked spots in the public right-of-way. These corrals use GPS beacons to ensure micromobility devices are properly parked. Currently, Phoenix is the only city that is 100 percent corral-based parking. It is the preferred model for cities because it allows for better accountability. Vehicles that are not properly parked can be reported, and vendors must recover them within a certain timeframe (normally two hours). For Phoenix and other cities, the installation and maintenance costs of corrals are a major drawback, but these costs can be offset by incorporating them into fees for vendors.
A low-cost alternative is the use of pavement markings, which can be applied easily, but it also results in reduced corral visibility. However, pavement markings are especially useful in congested areas where street space is limited. Unfortunately, the corral system becomes less feasible as operating areas expand. A larger operating area exponentially increases the number of corrals necessary, which drives up material costs for managing and maintaining them. For vendors, more corrals can be difficult and cost ineffective for operations as vendors must dedicate more time and resources to ensure compliance.
Another alternative is the use of “lock-to” parking requirements, where users are required to lock vehicles to fixtures in the public right-of-way as long as it is compliant with the Americans With Disabilities Act. Vendors provide locks on vehicles and ensure vehicles are locked before riders can end their trips. Lock-to is easier to enforce than soley relying on geofencing and corrals, and is more feasible in larger operating areas. Chicago and Minneapolis have seen success using "lock-to" parking requirements. Chicago saw a dramatic decrease in complaints during their second pilot program where 97.3 percent of vehicles were locked and parked correctly. The two main considerations with this method are whether operators will need to lock vehicles during rebalancing efforts and decisions on what fixtures users can lock vehicles to such as street sign poles or bike racks. The "lock-to" requirement relies on a robust network of bike racks, which may pose a challenge for Phoenix where limited bike racks exist. The requirement may also interfere with people parking personal bikes if shared vehicles are taking up bike rack space. To make this a successful strategy, Phoenix would need to consider investments in public bike racks throughout the service area.
Addressing Equity
As cities have launched and grown their micromobility programs, they have also sought to address equity concerns in their programs, which may come in the form of micromobility device geographic distribution policies, equitable payment systems and reduced rates for people with lower incomes.
Geographic distribution policies, also called “opportunity zones” or “equity priority areas,” have been used to ensure an equitable distribution of micromobility vehicles in areas that have been determined to be “historically underserviced." In fact, 66 percent of North American cities with a micromobility program have such a policy in place. Cities impose a requirement that a certain number of vehicles (either a set number or a proportion of the fleet) be available in these key areas upon rebalancing. Each city varies in how they determine which areas are deemed in need of intervention. Seattle, for example, uses their own locally developed Access to Opportunity Index which compares levels of access to education, economic opportunity, transit, public services, and public health. Minneapolis uses a simpler measure where they focus on census tracts where 40 percent or more of family and individual incomes are less than 185 percent of the federal poverty threshold. Tucson uses four categories to assess their opportunity areas: socioeconomic status; household composition and disability; minority status and language; and housing and transportation.
Alternative payment systems are another important facet of an equitable program. Early docked micromobility systems used payment kiosks to rent vehicles, but most systems have migrated to rentals and payments through mobile phone applications, preventing some residents from accessing the system. Equitable payment systems focus on the small set of the population that does not own a smartphone and/or does not have a bank account or credit card. According to the Pew Research Center, roughly 15 percent of adults in the U.S. do not own a smartphone. In the Phoenix metro area, about 4 percent of the population is considered “unbanked” (do not have a checking account). About 21 percent of American consumers do not have at least one credit card. As of 2020, 74 percent of micromobility programs offer alternative payment options. For people without a smartphone, one option is to use text messaging to unlock vehicles and pay for rides. Users usually must contact a customer service number to set up the service ahead of time. People without a bank account or credit card can use prepaid debit cards to rent vehicles.
Cities can also stipulate in their solicitations that vendors must offer discounted rates to riders living on low incomes. There are two main methods vendors use to qualify users for reduced rates: users verify enrollment in a local, state or federal assistance program; or rates for trips that begin or end in designated low-income zones are automatically reduced. A combination of these strategies can reduce barriers to low-income communities. Roughly 83 percent of cities have some sort of discounted program.
Streets staff recommend Phoenix’s Comprehensive Micromobility Program, and any potential vendor solicitations, include requirements to address geographic distribution and balancing, alternative payment systems, and discounted rates for riders living on low incomes.
Fees for Vendors
The fee structures used to recoup the costs of maintaining micromobility programs vary between cities. All cities have an upfront fee to cover administrative costs in the form of application and permit fees. These can be a flat fee or a per-unit fee ($30/vehicle). Cities typically apply a surcharge to cover operational and maintenance costs tied to the number of trips reported by the vendor or the number of vehicles in the fleet. The decision to charge per trip or per vehicle can be consequential to revenue and each has its tradeoffs. A per-trip model can be more volatile and is subject to ridership trends but has the potential to generate more revenue to a city. Alternatively, a per-vehicle fee allows for more stability in revenue, but a city may miss out on higher revenues when trips are high. Some cities also tend to institute fines to recoup the costs of recovering incorrectly parked vehicles. Phoenix’s current e-scooter Program fees are largely comparable to other cities, with the following highlights:
- Phoenix has a relatively low application fee compared to other cities;
- Phoenix is within the same range of recurring fees as some cities;
- Phoenix falls in the middle of what other cities have set for trip surcharge fees; and
- Phoenix has established parking fines that are relatively higher than other cities.
See Attachment D for a comparison of Phoenix’s fee structure relative to other cities.
Procurement Information
Streets staff researched micromobility procurement and regulation in peer cities to understand what would be appropriate for Phoenix. Phoenix's current Program is operated through a permit process. An alternative, used by many of Phoenix’s peer cities, is to use a Request for Proposals (RFP) process because of the benefits of a competitive selection process. With an RFP process, cities are able to retain more control and ensure alignment between the City’s goals and the vendor’s goals. Cities can work with vendors to balance community needs with ensuring a profitable program.
The RFP process also allows cities to narrow down the number of vendors in a transparent and fair manner. Minneapolis city staff stated that with such a high-profile program, it is vital that the process be transparent to the public and to the vendors. Additional feedback from other cities recommended limiting the number of operators as too many vendors in a market can be incredibly taxing on city staff time and resources. Chicago, for instance, allowed ten vendors to operate during their first pilot program, and the required coordination was deemed "incredibly hectic." From a rider’s perspective, it is also a challenge and impractical to download and utilize ten different mobile applications. A limited number of vendors is easier to manage for all.
In general, cities across the nation are moving toward the RFP process to secure vendors for their shared micromobility programs. Some of the cities that have already completed the process and have launched their programs include: Tacoma; San Antonio; Denver; Boulder; Tampa; and Omaha. In addition, the cities of Tempe, Minneapolis, and Portland (Oregon) are expected to release their own RFPs this fall.
The timeline to complete the RFP process is different for every city and is largely dependent on the procurement process. For example, the City of San Antonio completed the process in nine months from subcommittee approval to program launch. On the other hand, the City of Tacoma attempted a quick timeline of three months from subcommittee approval to program launch but was delayed due to both contracting delays and the COVID-19 pandemic. The standard timeline for RFPs in the City of Phoenix is one year; however, procurement staff has laid out an expedited timeline that could be completed in as little as five months and aligns with the expiration of the current e-scooter pilot program on March 31, 2022.
Next Steps
Staff will continue to work toward establishing a Comprehensive Micromobility Program through the RFP process. Currently, e-bikes are prohibited from operating on public roadways, so staff would also pursue an amendment to the motorized play vehicles ordinance to allow the use of micromobility vehicles on public roadways.
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Street Transportation Department.