The economics of bike corrals could have us singing “yippie ki-yay”

“Bob and Barbara’s really needs this,” says Marcus Ferreria of the South Street West Business Association. What’s the “this” in that sentence? A discount of PBR? New bathroom facilities? No. Like so many other area businesses, what Bob and Barbara’s really needs is a bike corral. “There are bikes plastered all over its railing, especially on weekends,” says Ferreria.

Bike corrals are those collections of five or six bike racks installed in the street in front of your favorite bars and restaurants in the city. You’ve seen them sitting plainly at Tattooed Mom and Johnny Brenda’s, looking sharp in front of Shake Shack and hidden on Sydenham Street. Bike corrals take the place of a car’s parking space, but provide bike parking for up to 12 bikes – a trade-off many area businesses are eager to make.

“It definitely has a positive impact on business,” William Reed, co-owner of Johnny Brenda’s in Fishtown, wrote in an email. “We would double the size of the corral immediately if we had approval for it!”

His business partner echoed Reed’s enthusiasm for the corrals. “I’d gladly double the size at Johnny Brenda’s with support from the city,” said Paul Kimport. Kimport and Reed also own Standard Tap in Northern Liberties, and they’d like to see a bike corral there as well. “It would be a great relief to the many cyclists to have one,” said Kimport.

A business plan based on volume

The need is most acute in the neighborhoods with the greatest number of bicycle commuters: South Philly, Center City and the neighborhoods just north of Center City. According to the Bicycle Coalition of Greater Philadelphia’s 2014 annual report, ridership in these neighborhoods are 5.5 percent and 5.3 percent, respectively, placing them in to the top 25 biking neighborhoods in the nation. Since 2005, bicycling commuting in Philadelphia has risen 260% and now makes up 2.3% of the commuting share. That growth has been driven largely by infrastructure improvements, according the Bike Coalition study.

Not coincidentally, we’re talking about the same neighborhoods that have seen a 78 percent rise in the number of young college graduates living there.

Young people like Jamie Shanker, a F&M and Temple Law graduate who lives in Grad Hospital and commutes via bicycle and regional rail to Mount Airy. She’d love to see a safer, more secure place to park her bike near Suburban Station. “I’ve had two bikes stolen and one tire stolen,” she said.

Shanker’s experience is sadly common. Philadelphia has the displeasure of being one of the worst cities for bike theft. Improperly locked bikes and bikes locked up away from other bikes on less trafficked streets are at the greatest risk.

Knowing he can park his bike hassle free in front of his business,Tattooed Mom, is one of the things Robert Perry likes best about the corrals. “It definitely helps me out,” said Perry, who also raved about the impact on local businesses. “I think it absolutely makes a difference,” he said. “I know it works. I see people using [the bike corral] every day. People use them, go into stores and come into Tattooed Mom.” Perry said other business owners on the block were “very positive” about the corral.

Their anecdotal evidence tracks what studies in Australia and Portland have found: upticks in business from bicyclists after bike corrals were created. Sixty-seven percent of respondent businesses within a half-block of a bike corral in the Portland study said the corral increased foot and bicycle traffic.

Eighty-four percent of the Portland study respondents also said corrals enhanced the street and neighborhood identity. In other words, if Philadelphia wants to keep and continue to attract the millennials it has so successfully courted (and it does), more bike corrals will help.

The Australian study showed that bike corrals can increase customer spending. Even though bicyclists tend to spend slightly less per stop than drivers, increased volume, which you get by replacing one parking spot with room for 12 bikes, more than makes up the difference.

This may take awhile

Only a few businesses were lucky enough to secure a bike corral in the Mayor’s Office of Transportation and Utilities pilot program – those eight racks were paid for by the city. Since then, only one business has managed to secure a permit to build and maintain a corral using its own funds – Shake Shack in Center City. So far, no others have been approved, although at least two have been made.  

Bob and Barbara’s and its neighboring businesses put in an application for a bike corral back in 2013. They are still waiting today. The delay, in part, was caused by the need to get approval from the Center City Residents Association, which balked at the less-than-pleasing aesthetics of the original design offered by the SSWBA.

But waiting for the Mayor’s Office of Transportation and Utilities (MOTU) to approve the application has taken the most time. For his part, Ferreria, who handled the application on behalf of the area businesses, said he understood the delays: “MOTU is just swamped right now.” MOTU has been busy leading up the bike sharing program efforts. The office is small, just thirteen employees, and bike share is a huge program to implement, on top of the work they do elsewhere planning transit, parking, and municipal operations.

“It’s not a criticism, it’s just unlucky that when I put in the application,” said Ferreria “It was probably the very worst time to do it.”

Still, the need is obvious. As Philadelphia’s population increasingly turns to bicycles and mass transportation to get around, the need for parking spaces decreases. More bicycle infrastructure encourages more bike riding, which in turn means more bikes. That means fewer drivers and reduced traffic. Increasing the number of bike corrals available is one of those “everyone’s a winner” moments.  

Aaron Ritz, Bicycle/Pedestrian Program Planner at MOTU, admitted delays that have been caused in part by new regulations related to the corrals, but said he hopes, going forward, to have new applications cleared in about 2 months.

At a few pages long and requiring a $125 fee, the application itself isn’t terribly onerous. What is a bit intense, however, is getting the necessary recommendations from neighboring businesses, residents, civic associations and city council members.  While getting more than just 51% of neighbors to sign off is merely “encouraged, but not required,” any lawyer worth their salt will tell you that bureaucratic recommendations should be treated like requirements.

As a result, the two months Ritz mentioned is really much longer, taking up lots of a businesses’ time, which, as Ben Franklin’s famous maxim reminds us, is costly.

A common good for the people

If the business or non-profit is successful, then they get the honor of paying for the corral, which run about $2,000 for the most basic designs. While bike corrals do benefit local businesses, the one business applying won’t exclusively enjoy the profits of the rack they pay for. It’s a classic collective action problem: we have an exhaustible, non-exclusive good – only so many people can use a bike corral at once, but there is no restriction on who can use it, which makes the economic argument for individual businesses less compelling.

Under the current regime, the benefits are public – everyone in the area gets to enjoy the boost in business from a bike rack – but the costs are born privately.  If a business is lucky, it can convince its neighbors to chip in on paying for the corral, but neighbors are more likely to free ride.

The most common way to overcome this problem is also the simplest: government action. Governments work in the public’s interest. If the city is unwilling or unable to find the funds to build more bike corrals, at very least the permit process should be made less onerous by removing the “encouraged” sign-offs.

As this article in Governing argued, the way for cities to succeed is by standing out from their competition: other cities. Among the ten largest cities in America, Philly’s number one in biking. But we drop down to eleventh when we look at cities with populations over 200,000 – traffic-circle obsessed Washington D.C., muggy New Orleans, arid Tucson, hilly San Francisco, rainy Seattle, and even frigid Minneapolis beat us in bicycle commuting.

We can make Philadelphia the premier bicycling city – and thereby gain a real selling point.  If you think cyclists are jerks, then I get why you’d be opposed (also, you’re wrong). Like most good things, it requires careful planning and public investment.