CITY COUNCIL UNFINISHED BUSINESS SUBJECT: INITIATED BY:

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1 CITY COUNCIL UNFINISHED BUSINESS JANUARY 16, 2018 SUBJECT: INITIATED BY: UPDATE REGARDING THE WEHO PEDALS BIKE SHARE PROGRAM, AUTHORIZATION OF MOU WITH REGIONAL BIKE SHARE SYSTEM PARTNERS, AND UPDATE REGARDING NEW DOCKLESS BIKE SHARE TECHNOLOGIES COMMUNITY DEVELOPMENT DEPARTMENT (John Keho, AICP, Interim Director) (}-)0 (Bianca Siegl, Long Range & Mobilit~ t~ning Manager)f;'f~ (Tiffany Robinson, Senior Planner)~ STATEMENT ON THE SUBJECT: The City Council will receive an update on the status of the WeHo Pedals citywide bike share program and consider a Memorandum of Understanding (MOU) between the City and other Westside Cities for operation of a unified regional bike share system. The Council will also receive information on an emerging bike share technology called 'dockless' bike share, and consider its operation in the City. RECOMMENDATIONS: 1) Receive an update from staff on the WeHo Pedals Bike Share Program. 2) Authorize the City Manager or designee to sign and execute all necessary documents related to the Memorandum of Understanding for Operation of a Regional Bike Sharing System. (Attachment A) BACKGROUND/ ANALYSIS: This report addresses three topics related to the City's bike share program: 1) An update on the status of the citywide bike share program, WeHo Pedals, since system launch. The update includes details on system usage during the first sixteen months of operation, program enhancements since launch, revenue and funding, customer feedback, and next steps. 2) Approval of a Memorandum of Understanding (MOU) that will define the revenue sharing and operations agreements between West Hollywood and other regional bike share partners including the cities of Santa Monica, Beverly Hills, and UCLA for an integrated regional bike share system, to be called Bike Share Connect. Finalizing this MOU is the culmination of efforts that have been in the works since the introduction of bike share to the Westside region in 2015 and will allow West Hollywood and the partners to complete the integration of their systems. The integration will create a seamless experience for WeHo Pedals riders traveling within and between these partnering jurisdictions without being limited by the individual system boundaries. Staff is bringing the MOU to the City Council for approval in order to maintain the current Page 1 of 15 AGENDA ITEM 4.B.

2 project schedule for interoperability in early ) Lastly, the report discusses an emerging bike share technology called "dockless" or "free-floating" bikes that are operated by private vendors and require no public funds for capital or operational costs. In order to properly address the benefits and challenges of this new bike sharing model, the Council may wish to either conduct a pilot program to define terms and conditions to control operation of potential private bike share vendors in the City, or prohibit such operators in West Hollywood altogether. 1) Bike Share System Update West Hollywood launched WeHo Pedals, a citywide bike share system, in August of 2016 with the goals to: (1) provide efficient point-to-point bicycle transportation, (2) connect to key local and regional destinations, (3) use innovative technology, (4) provide ease of use for customers, (5) minimize footprint on City sidewalks and public spaces, (6) ensure compatibility with neighboring jurisdictions to the extent possible, and (7) be revenue neutral or positive and leverage sponsorship to the extent possible to cover operational costs. In the first year of operation, WeHo Pedals has been successful in achieving the first six goals. With the authorization of bike share, the City made a strong choice to be on the cutting edge of bike sharing in Southern California, implementing a system that used the latest bike sharing technology, in step with other Westside partners in Santa Monica and Beverly Hills. The program makes 150 GPS-enabled "smart bikes" available to residents, visitors, and commuters, and operates as one of the City's numerous transportation options, along with the Cityline and The PickUp. Major accomplishments in the first year of operation, through September 2017, include: Installed of 21 dedicated stations distributed in and around West Hollywood, including two stations installed in August 2017 at The Grove and Farmers Market Expanded the initial system area to 12.5 square miles, providing access to Runyon Canyon, Metro rail stops at Hollywood/Highland and HollywoodNine, and the City of Beverly Hills. 1,741 individuals completed 16,470 trips (covering 24,245 collective miles) and reducing communitywide greenhouse gas emissions by over 21,000 lbs. Hosted 17 pop-up "Hub Days" events throughout the community. Provided in-person training and free helmets to 70 community members through monthly Bike Share Basics Classes. Established reduced-price membership programs to enhance access for lowincome, senior, and student riders. Established an Ambassadors program to perform outreach at various community events about WeHo Pedals membership and events. Promoted WeHo Pedals on social media relations via the City's Twitter and Facebook page. Offered various promotions throughout the year, including May's Bike Month 20% off Annual and Monthly memberships, and June's Pride Bike contest. Page 2 of 15

3 Placed major advertising in print media such as the West Hollywood Magazine, Dujour Magazine, LA Times (with an insert for local subscribers of the Beverly Press), LA Weekly, and regular ad placements in Beverly Press and WeHoVille. Nominated for West Hollywood Chamber of Commerce Creative Business Award. Negotiated operating principles, revenue sharing standards, expanded system areas, and a MOU to govern seamless interoperability among CycleHop bike share programs in three Westside cities and the University of California, Los Angeles. Additional program details and highlights from the first year of the program are noted in Attachment C. Program Survey The City solicited public feedback on the first year of the WeHo Pedals program though an on-line survey. The survey asked current and potential users to discuss their thoughts on program implementation, barriers, ease of use, effect on their mobility choices, and their overall user experience. The survey was open from early September through early October and the City received more than 80 responses. Notice of the survey was sent out to all WeHo Pedals users via and the Social Bicycle app, and distributed to members of the public through the City's social media accounts. Highlights from the survey include: Respondents used WeHo Pedals most often for social activities/dining/shopping (51 %) and errands (47%) Respondents noted "lack of bikeways where I want to ride" (38%) and "Financial constraints (i.e. Membership Costs)" (35%) as barriers that prevent them from using WeHo Pedals more often 89% of respondents would like to see expansion of the program with additional bikes and stations Overall rating of system = 3.63 (3=Good, 5=Excellent) Staff is working with CycleHop apply this feedback to make adjustments to the program to enhance the user experience. Strategies include partnering with hotels and businesses, bicycle awareness events, promotions, and contests. More information about the marketing strategy is noted further in this report. Full survey results are noted in Attachment D. Program Revenue In the first sixteen months of operations, while operating as a geographically isolated system and without a permanent system sponsor, WeHo Pedals is not yet on a path to become financially self-sustaining. Based on initial projections completed by the system operator, CycleHop, it was expected that through a combination of rider fees, stationbased advertising, and system sponsorship, the bike share system could be financially self-sustaining, and possibly revenue positive, by year three of operation. Page 3 of 15

4 It was anticipated that funding for the ongoing operations of the City's bike share program would come from user fees and revenue from station-based advertising and a system-wide sponsorship. As detailed in the table below, the revenue received over the last twelve months only covers 33% of the system's operational costs ($344,750/year); excluding City employee costs. The table below shoes the initial revenue and expenditure projections for the system, as well as the actual numbers from the last twelve months of operation. Without a system-wide sponsorship, increased station advertising revenues, and increased ridership, the program will not be revenue neutral. It should also be noted that the City's initial capital investment for the program was approximately $500,000, and it was anticipated that excess revenues in future years of operation would help to off-set this initial expense; to date there have been no excess revenues to help off-set the initial capital investment. Annual Revenue Original Projections Actual (Last 12 Months) (Assumed Sponsor) User Fees $262,500 $32,968 Station-Based Advertising $115,200 $49,803 System-Wide Sponsorship $225,000 $31,000 Total Income $602,700 $113,771 Annual Expenses Original Projections Actual Operating Expenses $344,750 $344,750 City Employee Expenses $155,800 $155,800 (No Title Sponsor) Net Revenue to the City $1 02,150 -$386,779 Sponsorship and Advertising As part of the original financial projections for the system, the operator, CycleHop, projected that the City revenue from a system-wide sponsorship and station advertising to be approximately $340,000 annually, which would cover nearly all of the operational costs. As described in their contract with the City, CycleHop bears the responsibility of securing an overall, long-term sponsor for the bike share program. After an unsuccessful attempt at securing sponsorship with Hulu in June 2016 (sponsor of Santa Monica's Breeze Bike Share), CycleHop implemented a new sales strategy that included hiring Premier Partnerships to garner sponsorship for the WeHo Pedals system. For the past 12 months, the CycleHop/Premier team has worked with staff to develop and engage a list of prospective sponsors using Premier's vast network of client contacts. Staff has been meeting with the CycleHop/Premier team on a bi-weekly basis to review progress and provide guidance. Premier has a long history of work with the City on billboard valuation, and is one of the top firms in the country in generating sponsorship deals for a range of sports-related assets. Based on the fact that there are currently no prospective sponsors in negotiation, and the limited window of opportunity for inclusion in the calendar year budget cycle, the sponsorship team does not expect Page 4 of 15

5 that the program will be able to garner a title sponsor in FY2018. To offset the decreased revenue due to the lack of a title sponsor, staff has worked with CycleHop to secure vendors looking to use the bikes for short-term sponsorship opportunities such as Google (November 2017) and Paul Frank (December 2017). The revenue received from these short-term opportunities is comparable to the revenue that the system would receive from system sponsorship on a per-bike basis. For the two monthly short-term sponsorships to date, the City will net $31,000 in revenue to support the bike share program. In addition to generating immediate revenue for the City, shortterm sponsorships also help to demonstrate the value of the bike assets for potential title sponsors. CycleHop is projecting that there will be several additional short-term sponsors in The CycleHop/Premier team expects that potential corporate clients will be developing their marketing budgets and branding initiatives for FY2018/2019 between January and March Given this timeframe, staff is continuing to move forward with the current sponsorship team so that there will not be a gap in performance during this crucial time. Staff has directed the CycleHop/Premier team to improve upon the previous efforts to secure title sponsorship for FY2019 by (1) targeting new prospective sponsors, particularly those who have a vested business interest in the West Hollywood communigy, (2) leveraging the benefits of regional integration to sell the system and pursuing a single sponsor for the Bike Share Connect member cities, as an alternative to sponsorship for West Hollywood alone, (3) continuing to use the bike assets and marketing impressions from short-term campaigns to demonstrate the value of the system, and (4) coordinating marketing efforts with high profile short-term sponsors to increase the system's market capital. If CycleHop does not have a title sponsor or comparable sponsorship program in contract negotiation by the end of the 2018 fiscal year, staff may recommend an amendment to the CycleHop contract for the City to contract directly with an alternate vendor to procure a sponsor for the system. The system also continues to collect revenue from sales of ad panels located at 11 bike share stations throughout West Hollywood. Sales of the ad panels are managed by Outfront/Decaux as part of the City's Bus Shelter contract. Over the past twelve months, the program has garnered $49, Revenue from the panels is lower than originally projected largely because spatial constraints at the bike share stations have prevented installation of the panels in many locations. It is expected that this will continue to be a steady source of revenue for the system. Key Findings and Next Steps As with any new program, the first years of operations are instructive in understanding how the system may succeed over time. Challenges and opportunities identified in the first year of operation included: Lower than anticipated ridership levels and associated revenue. As' bike sharing programs typically appeal to less experienced cyclists, the lack of protected bike lanes and comfortable bicycle routes throughout the local area likely constrains ridership potential (see below). While the statistics show that l 1 ~ the bikes are being regularly used and ridership continues to increase, on-going membership growth and retention will also depend on expanded marketing and Page 5 of 15

6 outreach strategies from staff and from CycleHop, as required in their operational contract. Staff is currently working with the Communications Department to implement unique, targeted opportunities to promote the system, attract new riders, and continually engage existing riders to use the bikes. These opportunities include: o Enhanced Customer Relationship Management / Retention Efforts to Members o Print Display Advertising in Community Newspapers o Digital Display Advertising in Local E-News Publications o Event Marketing / Group Rides with Local Influencers o Promotions Related to Bike to Work Day and CicLAvia o Regional Cross-Promotional Efforts with Santa Monica, Beverly Hills, and UCLA o Materials to Promote Sponsorship Opportunities and Outreach to Businesses Staff has earmarked $35,000 in additional funding to support expanded marketing efforts for WeHo Pedals over the next 12 months. Ridership levels and associated revenue are also expected to increase as a result of integrating all Westside bike share systems under the "Bike Share Connect" umbrella (see Section 2, MOU, below). Greater number of Pay-As-You-Go (one-time or occasional) riders than annual/monthly members. Approximately 80% of riders pay by the hour (Pay-As-You-Go), rather than purchasing an ongoing membership option. This is consistent with membership patterns in Beverly Hills and Santa Monica whose Pay-As-You-Go memberships make up 97% and 90%, respectively, of their active members. Of WeHo Pedals' Pay-As-You-Go riders, approximately 37% are registered with a West Hollywood address. This indicates that the program appeals to visitors, and/or that local residents are using the bikes occasionally, rather than as a regular transportation choice. As a result, future program promotion may focus on (a) increasing the number of regular riders by encouraging monthly or annual memberships and providing additional incentives for local residents, and (b) working with hotels and local tourism agencies (e.g. Visit West Hollywood) to promote WeHo Pedals for visitors. Moving forward with installation of bicycle infrastructure improvements identified in the recently adopted Pedestrian and Bicycle Mobility Plan to increase rider comfort and safety. Feedback during development of the Mobility Plan and from the WeHo Pedals survey indicates that safety concerns are the primary reason people are hesitant to ride a bike in West Hollywood. Expansion of comfortable on-street cycling routes should be expected to support increased levels of cycling in West Hollywood. The Mobility Plan identifies priority bike projects such as the Willoughby Neighborhood Greenway to provide critical completion of an east- Page 6 of 15

7 west cycling route through West Hollywood, as well as north/south connections via the proposed GardnerNista and Almont Drive Greenways. Staff is currently pursuing grant funding for the Willoughby and Gardner Greenways, and plans to move forward with design and installation of the Almont Greenway (using funds from the Melrose Triangle development project) this year. Better regional bike connectivity will be aided by high visibility bike lanes along Santa Monica Boulevard soon to be installed by the City of Beverly Hills. These new lanes are expected to be completed in mid Staff suggests prioritizing the extension of the existing bike lane along westbound Santa Monica Boulevard between Willey Lane and Doheny Dr to align with the Beverly Hill bike lanes, and installing high-visibility green markings to enhance the existing bike lane, allowing for a continuous link between West Hollywood and Century City. Lower than anticipated station-based advertising revenue due to limited space to install such signs in the public right of way and non-standard ad panel sizing from the sign manufacturer. Currently, 11 stations include a backlight ad panel. Advertising sales are the responsibility of Outfront/Decaux, under its current contract with the City. Station-based static advertising panels will be replaced in the future with panels consistent with those developed for the Street Media Program, and may yield increased revenue as a result of Outfront/Decaux's ability to sell unified programs across both bike share and bus stop ad panels. Innovations Division staff is currently working with the Outfront/Decaux Street Furniture Team to finalize the design of the bus shelters based on input from Council. These panels are estimated to be installed by the year end Need for fully interoperable bike sharing system on the Westside. Execution of the MOU for integration and coordinated operation of all CycleHop bike share systems (West Hollywood, Beverly Hills, UCLA, and Santa Monica) will better serve the needs of bike share users, and provide ease of access to 830 bicycles and more than 35 square miles on the Westside. WeHo Pedals will also greatly benefit from the exposure and cross-promotion of the regional bike share network, Bike Share Connect (see Section 2, below). 2) MOU for Regional Bike Share Integration The City's bike share system is designed to support full interoperability with other CycleHop-operated bike share systems on the Westside. WeHo Pedals is identical to bike share programs in Santa Monica, Beverly Hills, and UCLA. While staff from each jurisdiction have been working closely together since launch, each system has so far operated separately. True seamless interoperability - where all bikes are available to all users, regardless of the jurisdiction that owns them, and each jurisdiction is included in a single unified system area - has been delayed in implementation due to technical challenges on the part of the bike share technology provider, Social Bicycles. The final step in moving forward with implementation is the Regional Bike Share Memorandum of Understanding (Attachment A). The MOU defines partner roles, connects all partner Page 7 of 15

8 bike share system areas into a contiguous service area, and enables the operator to concurrently operate the respective systems as one larger system. It also establishes a revenue sharing model and central banking system for shared revenue amongst the partners. West Hollywood will be the final jurisdiction to sign on to the MOU that will formalize the operational and revenue-sharing components of the regional bike share system, 'Bike Share Connect'. Under Bike Share Connect, each jurisdiction maintains its own identity, while offering a seamless user experience across the Westside. Regional System Area Regional integration will create one contiguous system area (see map in Attachment B), using the same pricing structure, and including all the bike share bikes owned by the separate partners (Beverly Hills, Santa Monica, UCLA, and West Hollywood). All riders in the Bike Share Connect Network will be subject to the same user terms and conditions. Once implemented, Bike Share Connect will provide members with access to 830 bikes and more than 139 stations throughout the Westside. This regional integration will likely provide the WeHo Pedals system with an increase in revenue from user fees and shared revenue from the other regional systems, better program visibility, and an increase in riders. The table below highlights the major benefits that WeHo Pedals users will experience as a result of the integration: Program Element Access to Bicycles Users must manually subscribe Users will be automatically able to each partnering network. to use a single account number and PIN in each partnering network. Daily Ride Time Subscription members are Members can use their 90 limited to using their 90 minutes minu~es of daily ride time on any of daily ride time in their home bike in the Bike Share Connect network. system. Out of Hub/Station Fees Users incur an out of hub fee Users will not incur an out of hub ($2) if they lock a bike outside a fee if they lock a bike to any designated station hub (rack). designated hub located within the Bike Share Connect system area. Out of System Area Fees Users incur an out of system Users will not incur an out of area fee ($20) if they leave a bike system area fee if t hey park a outside the West Hollywood/ bike at any hub located in the Beverly Hills system area. Bike Share Connect network, including Beverly Hills, UCLA, and Santa Monica. Shared Revenue All bike share revenue associated with the regional bike share network will be collected into a shared merchant services account before being split and disbursed to each individual partner's bank account on a monthly basis. Revenue will be collected and attributed to partners' individual bank accounts in two ways: Page 8 of ls

9 1. Ride Revenue/User Fees: Revenue will be distributed according to the jurisdiction that owns the bike used for a given trip. For example, if a user finds a WeHo Pedals bike locked to a Breeze hub in Santa Monica and chooses to ride it, the revenue from that trip would be attributed to West Hollywood because it is the owner of the bike. 2. Membership Fees: Membership fees will be split based on a Membership Fee. Attribution model (noted in the table below), which ensures a base percentage of revenue for each partner based on the number of trips generated by their bikes each month. WeHo Pedals currently generates 42% of its user revenue from Ride Revenue/Fees and 58% from Membership Fees. Under this MOU, WeHo Pedals would still continue to collect the Ride Revenue/Fees for WeHo Pedals bikes regardless of where the bikes end up in the Regional System. The table below provides an example of how the revenue will be shared amongst the partners. It is expected that revenue to West Hollywood from system-wide Membership Fees will increase as a result of this agreement. Example of Revenue Split Using Membership Fee Attribution Model Partner Agency Number Percent of Base Percent Bonus Membership of Trips* Trips (80% of Total Percentage Fee Revenue Trip Percentage Percentage) Santa Monica 75 75% 60% 5% 65% West Hollywood 10 10% 8% 5% 13% Beverly Hills 5 5% 4% 5% 9% UCLA 10 10% 8% 5% 13% Total % 80% 20% 100% * These numbers are for example only and do not reflect the actual number of trips by partners to date. The number of regional trips is expected to fluctuate by partner from month to month. Marketing and Branding for Bike Share Connect CycleHop has developed a 2018 marketing program for the regional bike share network which includes: (1) providing informational materials and promotional discounts to local businesses and hotels; (2) distributing a monthly digital newsletter to network users that includes information on events and promotions for all systems; (3) continuing to push content to local media outlets for events and program awareness; (4) updating the program website to build brand awareness, generate membership, and encourage engagement; (5) expanding the Ambassadors program to provide greater incentives for retention and regional promotion; (6) regularly programmed membership campaigns, i.e. January's "New Year, New You" Annual Member discount, and (7) continuing to host bike share awareness events that allow for community visibility of the program. CycleHop will establish one comprehensive website for Bike Share Connect that provides links to individual partner websites, and create a single monthly e-newsletter to members. CycleHop and individual jurisdictions will each promote a social media handle Page 9 of 15

10 to be used across multiple media platforms e.g. lnstagram. Each jurisdiction in the system must update the graphics on all bikes, at all stations, and on all media assets to identify the bikes as part of the new Bike Share Connect network and system area. CycleHop's operational team is responsible for creating and replacing all bike and station graphics with the Bike Share Connect logo and system area information. Regional integration also requires that all brand-specific membership programs have consistent pricing and branding system-wide. For instance, West Hollywood's current low income plan ($7/month) will be renamed 'Bike Share Connect For All' at a rate of $5/month or $60/year. The current Employee Benefits Program, offering employer discounts on bike share memberships, will also be rebranded as "Benefits for Businesses." Next Steps Once the MOU has been signed by all partners, CycleHop and technology partner Social Bicycles will move forward with the final integration of the technology platform. While modifications to the technology move forward, staff of the partnering agencies will work with CycleHop to implement the promotional strategy and marketing materials described above to ensure that all existing and potential users of the newly expanded service are notified of the enhancements to the system. Full interoperability of the system is tentatively scheduled for early spring Under the regional bike share MOU, all partners agree to analyze the impacts of the Bike Share Connect network after a six (6) month period and address any unforeseen operational impacts with CycleHop at that time through a service level amendment in their contract. Metro Regional Bike Share Coordination Since launching in the summer of 2016, Metro has placed about 1,400 bicycles at 125 stations located in Downtown Los Angeles, Pasadena, the waterfront in San Pedro and Wilmington, and Venice. This represents the completion of the first and second pilot phases of its long-term regional bike share plan. Metro intends to expand its program with more than 4,000 additional bicycles during the remaining three phases of system expansion. Metro's bike share system is based on an older 'smart dock' model, in which bicycles must be parked at designated docks (racks) spaced throughout a limited service area, and as such, provides less flexibility to riders. This technology will likely be eclipsed by 'smart bikes' (the WeHo Pedals model, for example) and/or dockless bike sharing technology. LADOT is currently working to develop a program to allow for dockless bike share operators in Los Angeles as a supplement to Metro's existing bike share system. In early 2018, Metro's bike provider plans to introduce a smart bike, called "B-Cycle Dash," and then incorporate electric assist (e-assist) bicycles later in Metro currently has no plans to expand their bike share system to portions of Los Angeles near West Hollywood. Metro's stated goal is to have all bike share systems in the region participate in a "seamless user experience." Staff continues to collaborate with Metro on bike share interoperability via a unified payment system that would allow users to move seamlessly between the Bike Share Connect system and the Metro Bike Share system by paying Page 10 of 15

11 with the Metro TAP card. This integration effort is being led by Metro and their vendor. Metro is first working to integrate TAP into their own bike share system before they expand integration to other regional systems. Full TAP integration for Metro is tentatively scheduled for summer 2018, with steps towards Westside integration to follow. 3) Dockless Bike Share Recently, a new generation of private, for-profit bike share systems have surfaced across the country. Part of the evolving transportation 'sharing economy', like Uber or Lyft, these bike share companies are well-financed by venture capital funds and have been targeting cities in which to expand operations. The Los Angeles area, and West Hollywood specifically, are prime targets. Under this new technology model, companies place inexpensive, on-demand rental bikes on sidewalks and private property in cities, and require no public funds to operate. The bikes need not be locked to a standard rack and do not require designated stations or hubs. A user typically finds a bike to ride via a web or mobile application and when their ride is complete, they end the trip by immobilizing the bike's onboard lock, which allows the bike to lock itself typically using a ring lock on the rear wheel. In this rapidly evolving field, there are at least six (6) dockless vendors operating in the U.S. Many cities such as Seattle, Washington D.C. and San Francisco, are restructuring their bike share model and policies to allow for these dockless systems through pilot licenses or other permitting mechanisms. Some of these cities have either discontinued their existing dock-based bike share program and encouraged dockless operators as a replacement (e.g. Seattle) or have allowed dockless to exist alongside and supplement their current bike share program (e.g. Washington D.C.). Rather than discouraging the competition, these cities have welcomed the new bike sharing models to serve the needs of the constituents and fill in the gaps in their bike share networks. This bike share model is gaining traction in neighboring Los Angeles where three different dockless bike share vendors have been operating since November These operations include: (1) a three-month pilot program in Council District 15 (Buscaino) with LimeBike; (2) a small pilot program in Koreatown with SpinBike; and (3) a pilot program in Griffith Park with Ofo Bike Share. In November 2016, Councilmember David Ryu introduced a motion to the LA City Council for LADOT to test dockless bike share by creating a dockless bike-share pilot program, and using the pilot to develop a regulatory framework and permit process for ongoing dockless operations. In response, the Los Angeles Transportation Department (LADOT) is developing rules for permitting dockless bike share operations and is expecting to bring this framework to the Los Angeles City Council's Transportation Committee in early On the Westside, the City of Santa Monica's Municipal Code prohibits any bike share operators that do not have a contract with the city, effectively banning dockless bike share. The City of Beverly Hills has not yet taken action regarding this new technology. Two dockless bike share companies have recently approached the City of West Hollywood to express interest in launching services here. Staff anticipates that pressure from such companies will grow. Our municipal code currently does not address dockless bike share operation in the City, thereby leaving no means for regulation or Page 11 of 15

12 permitting. Further, as dockless bike share programs expand in neighboring areas of Los Angeles, dockless bikes will appear on West Hollywood sidewalks whether the City expressly permits them or not. The Alternatives section, below, presents several options for consideration. Benefits Dockless/free-floating bike share systems can provide a number of benefits when compared to the existing bike share models (either "smart bike", like WeHo Pedals, or "smart dock" like Metro Bike): No bike share stations/racks. Bikes may be parked wherever a rider ends a trip. Lower price point ($1 for 30 minutes). No capital or operating costs to the City. Fast delivery and flexible trial periods, subject to City regulation. May provide a larger, more flexible, number of bikes throughout the City. Some companies allow for in-person registration at physical locations and/or cash payments. Concerns Dockless bike sharing is in its infancy and is not without significant challenges: Multiple companies each operating with hundreds of bikes in the same jurisdiction can be overwhelming for a city's public infrastructure. Bikes may be parked anywhere by riders, and may be left in precarious or inappropriate places, blocking access for other sidewalk users, or may accumulate in popular destinations. Dockless operators typically commit to a 24- hour response time for complaints. Overwhelmingly, the bikes used for these programs are inexpensive and of substandard quality and features compared to municipally-owned bike share system equipment, leading to issues of unsafe riding conditions, vandalism and rapid deterioration due to wear and tear. Certain vendors have been known to deploy bikes in cities without obtaining the proper permits for operation. Staff has been working closely with trade organizations such as the North American Bike Share Association (NABSA) and National Association of City Transportation Officials (NACTO) as they share lessons learned about dockless bike share and evaluate effective strategies for responsible use of the public right-of-way. ALTERNATIVES WeHo Pedals continues to provide a reliable, publically available transportation option for residents, visitors, and commuters to travel by bike, promoting public health and providing an effective alternative to local vehicle trips. The next nine to twelve months of the program will demonstrate how implementation of the integrated Bike Share Connect Page 12 of 15

13 system enhances regional bike sharing, as well as how the financial outlook for WeHo Pedals might improve as a result of marketing, changes in ridership, and program sponsorship. Staff will provide annual updates to the Transportation Commission and City Council regarding WeHo Pedals and Bike Share Connect. Staff presented details regarding the MOU and an update regarding dockless bike share programs to the Transportation Commission on November 15, The Transportation Commission was supportive of staff's recommendation to proceed with the MOU between the City and other regional bike share system partners as well as supporting consideration of a dockless pilot program. If the Council wishes to take immediate action regarding dockless bike share, there are two primary alternatives: 1. Prohibit Dockless Bike Sharing in West Hollywood. Direct staff to amend the Municipal Code to prohibit dockless bike share companies from operating in West Hollywood. Dockless systems would be a strong competitor to the city's current bike share program, WeHo Pedals, due to their lower fare structures and more flexible bike parking. Further, the City may benefit from allowing larger cities to continue to test and develop appropriate methods for regulating private corporations' operation in the public right of way. Technologies are evolving to allow Cities to designate appropriate parking areas, which are communicated to riders via the company's app, but these are not yet in widespread use. Allowing a large number of dockless bikes to be parked in the City's limited public rights of way could result in cluttered and obstructed sidewalks and public spaces, posing a threat to public health an'd safety if not properly managed. 2. Conduct a dockless bike sharing pilot program in West Hollywood. If the Council wishes to allow for operation of dockless bike share companies in West Hollywood, staff would develop a pilot program to allow for a limited number of dockless bike share companies to operate in West Hollywood for a one-year period. A pilot program would set strict and clear parameters for vendors looking to operate within the City and require orderly management of the bikes so as not to negatively impact public spaces (e.g. impede sidewalks). This would allow City to remain at the forefront of bike sharing in Southern California, testing new mobility options alongside LADOT, and refining operational standards to best meet the needs of our community. Staff would evaluate the pilot program at 6 and 12 months after the launch and make recommendations regarding next steps. Key issues to evaluate include: ridership levels on each bike share system (number of rides, miles traveled, key destinations), operational standards (bikes parked in intended locations, rebalancing/redistribution of bikes, bikes per square mile, number of bikes in good repair), user experience (end user behavior and satisfaction) and revenue (impact on WeHo Pedals revenue). The dockless model supports the City's goal of making biking an easy, affordable, and convenient option for getting around. Because of the lower price point to entry, dockless bike share would allow more of the West Hollywood population to access bike share. It also means that the pilot could reduce ridership/membership levels in Page 13 of 15

14 the WeHo Pedals system. Feedback from the pilot could be used to determine if this privatized dockless model could eventually replace the current City-owned bike share model. CONFORMANCE WITH VISION 2020 AND THE GOALS OF THE WEST HOLLYWOOD GENERAL PLAN: This item is consistent with the Primary Strategic Goal(s) (PSG) and/or Ongoing Strategic Program(s) (OSP) of: OSP-1: Adaptability to Future Change. OSP-4: Transportation System Improvement. In addition, this item is compliant with the following goal(s) of the West Hollywood General Plan: G-3: Provide excellent customer service, including utilization of emerging technologies. M-2: Collaborate on regional transportation solutions that improve mobility, quality of life and environmental outcomes. EVALUATION PROCESSES: Staff will continue to monitor the fiscal health of the system, including the amount and type of ridership, and revenue generated by user fees and station based advertisements Annual survey feedback will also be used to make adjustments to system programming. ENVIRONMENTAL SUSTAINABILITY AND HEAL TH: The "Smart bikes" used for the bike fleet tracks data on cumulative Vehicle Miles Traveled and GHG emission reductions associated with bike share utilization. Since the launch of the program, WeHo Pedals users have taken over 16,470 trips, adding up to 24,245 miles. Choosing this method of travel over driving has helped to reduce local traffic congestion, increase bike ridership throughout the city, and reduce the City's contribution of greenhouse gas (GHG) emissions by keeping over 21,000 lbs. of carbon dioxide from polluting the air. These measurable impacts target the GHG reduction goals set in the 2011 Climate Action Plan. Bike share has also been a contributor to community health by offering affordable and accessible bicycles to the public. COMMUNITY ENGAGEMENT: The pilot phase of WeHo Pedals began with a community event held on August 9, 2016, where members of the West Hollywood community were able to see how the bike share stations looked and operated, in addition to having the opportunity to enroll in membership. Beginning on August 14, 2016, the City of West Hollywood hosted a weekly WeHo Pedals bike share education class; a hands-on experience that educated and encouraged members of the public on how to safely and lawfully operate as cyclists Page 14 of 15

15 in the City of West Hollywood. The City continues to conduct trainings, informational workshops and engagement opportunities for community members and residents to solicit input regarding the bike share program, including a community survey and a 24ll feedback channel on the program website wehopedals.com. OFFICE OF PRIMARY RESPONSIBILITY: COMMUNITY DEVELOPMENT DEPARTMENT/ LONG RANGE & MOBILITY PLANNING DIVISION FISCAL IMPACT: In an effort to increase knowledge of the program, staff anticipates transferring $35,000 from budgeted funds for studies and specific plans to cover the costs of enhanced marketing and advertising for the system and support branding for the Bike Share Connect system over the next year. As shown previously in the staff report, without a system-wide sponsorship, increased station advertising revenues, and increased ridership, the program will continue to not be revenue neutral; generating a deficit each year of nearly $400,000. It should also be noted that the City's initial capital investment for the program was approximately $500,000, and it was anticipated that excess revenues in future years of operation would help to off-set this initial expense; to date there have been no excess revenues to help off-set the initial capital investment. If Council wishes to continue with the Bike Share Program the up-coming two-year budget will need to include General Fund subsidies equal to the annual operating cost. The City may see additional revenue generated from the bike share program as the result of the revenue sharing model under the Regional Bike Share MOU, increased profitability from bike station advertising, and continued sponsorship opportunities - both multi-year and short-term. AMOUNT DESCRIPTION $35,000 Funding for this item is already budgeted. ATTACHMENTS: Attachment A - Memorandum of Understanding for the Operation of a Regional Bike Share System Attachment B - Draft Regional Bike Share System Area Map Attachment C - One Year Program Highlights Attachment D-WeHo Pedals Survey Results 2017 Page 15 of 15