Divvy Surveying Members About Different Pricing Options

DivvySurveyQuestion
What’s the ideal pricing structure for Divvy?

Divvy started sending out surveys yesterday asking how members use the system, whether their patterns have changed over time, how often they drive and take public transit, and what would get them to ride a bike more. The survey also asked members for their opinion of hypothetical changes to the system’s current price and fee structure.

The survey I received laid out these potential scenarios for memberships: $25 per month or $90 per year for the same package that’s currently offered for $75, and a $125 annual membership called “Gear” that includes includes five one-day guest passes. (This offer is currently available on Groupon for $65.)

Rest assured, Divvy isn’t on the verge of hiking the annual fee. “We’re trying to get more information from riders so we can offer them the best membership options,” said spokesman Elliot Greenberger, adding that customers have asked for a monthly membership option and a longer period to take trips without incurring late fees. “The goal of the survey is to find out what riders actually want.”

The Institute for Transportation and Development Policy’s bike-share planning guide says that while many cities have done their own “market studies to understand the effect of various price structures on usage and revenue generation,” there has been little academic research.

The surveys Divvy is sending vary, with different versions of the pricing questions randomly distributed, Greenberger said. The survey I completed also asked how much I would be willing to pay for a 45- or 60-minute use period without fees.

In addition to monthly memberships, one option Divvy should consider adding is a seven-day pass, which New York’s Citi Bike offers. At $25, it’s cheaper than a one-week MTA pass. Citi Bike sells annual memberships for $95, with a 45-minute period before fees kick in.

  • Anne A

    “The survey I received laid out these
    potential scenarios for memberships: $25 per month or $90 per year for
    the same package that’s currently offered for $75”

    That wasn’t quite it. One of the questions was whether or not the current annual scenario ($75/yr for unlimited 30 minute trips) would be preferable to a $90/yr annual membership for unlimited *45* minute trips.

  • Jeff Wegerson

    Weekly passes are really good when one is a tourist. I have experience with that option and it worked well for us. A half hour can be tight when you don’t know your way around but then socking the tourists to subsidize the locals is a time-honored tradition. Perhaps some day there will be a planetary option where your local membership has privileges world wide.

  • Different people received different questions. My question looked exactly the same as the screenshot above but instead of the $20, $75, and $115 options in the screenshot, my options were $25, $90, and $125 – all offering 30 minutes.

  • Alex_H

    “The surveys Divvy is sending vary, with different versions of the pricing questions randomly distributed, Greenberger said.”

  • “socking the tourists to subsidize the locals is a time-honored tradition”

    It’s not a tradition but part of the business model. According to ITDP’s bike-share planning guide, it’s common practice to create a pricing structure that recoups more costs per trip from casual users than subscribers.

    “In an analysis of U.S. systems, while annual members took a large majority of the trips, the casual members provide roughly 2/3 of the revenue for the system (Alison Cohen 2013, Toole Design Group).”

  • BlueFairlane

    … it’s common practice to create a pricing structure that recoups more costs per trip from casual users than subscribers.

    This is what has bugged me most about Divvy. I’ve just been a casual user, as I’m rarely an early adopter of any new system. I like to test it out first, but every time I do, something happens that makes me feel just a little bit gouged. This makes me far less likely to become anything more than a casual user, and in fact lessens even my casual use.

  • So become a subscriber – you’ll get a key and avoid having to bother with the slow kiosks, making dock surfing easier to do (avoiding the overtime fees).

  • BlueFairlane

    As it stands, I’d still get charged extra for a 32-minute ride. And anyway, I’m not likely to respond to annoying inconviences I’ve encountered in a system by giving that system more money. And I think that’s true of most people.

    This is an aspect of the business model I think Divvy’s going to have to address. One can assume that all the advocates and early adopters have adopted early. There may be some increase as Divvy expands its territory–though who knows the status of that now–but otherwise the membership level has probably incorporated all the gung ho and will then plateau right around 13,000. And this may be enough for the program to consider itself a success. If it wants to continue to expand its membership in the spring, though, it’s going to have to appeal more to people like me. It’s going to need to give the casual user some incentive to join besides the stick of extra fees and annoying, time-consuming delays.

  • I’m with you. I think Divvy should be cheaper, and they may address that if/when they get a brand sponsor.

    Memberships are at 12,608 as of Sunday.

  • I didn’t get that question. I did get one asking what I’d pay for 45 minute rides. I would pay $90, BTW, but I wouldn’t get this option anyway. 30 min is enough.

    I wish it were cheaper in general. That might attract more people. Velib is $39 per year.

  • WestLooper

    I’d be surprised it it plateaued at 13000. This spring will be a big sign up period I think.

  • I looked at other bike-share systems’ prices before publishing to make the case that it should be cheaper, because all of the ones that are in the high-performing quadrant in ITDP’s bike-share planning guide are much cheaper than Chicago (except for NYC, which arguably provides a better value because it has more bikes and stations and allows 45 minutes).

    However, I don’t know all the details about those systems’ respective funding schemes. Is it typical for European systems to have their operations subsidized in ways similar to their transit systems?

    For reference, the high-performing bike-share systems in the guide are NYC, Rio, Paris, Barcelona, Lyon, Montreal, and Mexico City.

  • john

    In Dublin an annual membership is €20, a 3 day pass is €5.
    Such low rates practically guarantee that residents and visitors will buy memberships, use the bikes, and rack up the extra use fees.
    JC Decaux provides the bike share system and places advertising on the infrastructure to generate the income required to fund the bike share.
    It’s basically free money, leasing public property (but for 15 years not 75!) in return for a public good
    http://www.dublinbikes.ie/Subscription/Pricing-Structure/Pricing-structure

  • Lyon and Paris are both financed by JCDecaux. If I remember right Paris is 1 € a day (maybe 2 now) and Lyon is 1.5 €. For a year it’s 29 and 25 €, respectively (15 in Lyon if you’re 14-25 years old!)

    According to the Vélo’v website (for Lyon) and from my own knowledge of Vélib in Paris is that they’re funded by advertising revenue. “Completely funded by advertising” is what the websites say. There’s no ads ON the bikes, by the way… I know in Paris the city sold its municipal billboards (at street level) to JCDecaux in exchange for them running the bikes. Must be the same in Lyon.

    By the way, I remember Vélib is only 19 € ($25) if you’re 16-25 and live anywhere in the ile-de-france. That would include students. They also actively recruited people on my campus to join Vélib. It was a van with a window – like a food truck – and they parked it on the campus at the start of semester and you could sign up right there.

  • Divvy has said they will pursue advertising dollars in the future. It disappoints me that NYC accomplished this thoroughly while we’re left looking like we don’t care to offset cost.

  • I don’t believe that Divvy and CDOT have ever looked like they don’t care about offsetting costs.

    CDOT announced at the very beginning that they were using three separate contracts to run bike-share.

    1. Station placement. Sam Schwartz Engineering.
    2. Operations. Alta Bicycle Share.
    3. Advertising/sponsor acquisition. Van Wagner. Details on this 5-year contract.

    However, Klein told WBEZ in November that an “eight-figure deal” would be signed by the end of 2013.

  • “Such low rates practically guarantee that residents and visitors will buy memberships, use the bikes, and rack up the extra use fees.”

    Divvy sells the $75 annual membership to corporate buyers for $65, and again, is selling the premium membership on Groupon for $65. I would think it’s reasonable that they have marked these memberships in order to track the difference between these members’ use and members who purchased via normal methods.

  • john

    $65 still isn’t cheap enough that I’d pick up a divvy membership on a whim, with no plan to use it, but to have it “just in case”
    An alternative would be a model like Ventra or iPass.

  • john

    JC Decaux’s model is to offer “free” street furniture in exchange for advertising. For example they provide and maintain bus shelters and keep the revenue from the poster sites. It has been a success for Dublin and it’s a lease rather than a sale.
    If leases are kept fairly short any problems can be fixed when they are renegotiated…

  • Alex_H

    My comment on this post was deleted. John and Steven, I think it is frustrating when posts are deleted without any notice or evidence of their deletion. Why not include a note that a comment was deleted?

  • john

    The problem is right there. Hiring an ad manager.
    The city is out of pocket with no guarantee of revenue?
    Perhaps Van Wagner are on a fee schedule where they don’t get paid unless they conclude a successful deal?
    I’m wondering why the city doesn’t do that in house.

  • Katja

    It’s actually much larger than it looks. I carried all my Black Friday purchases in it, and it was very secure. It doesn’t hold a six-pack, which is a little annoying, but it’s probably better than you expect!

  • BlueFairlane

    I have only a vague memory of what the comment was … something along the lines of the others discussing the content of your particular survey. I don’t recall anything that would justify deletion. I’m curious whether this happened for some technical reason, or if the guys have developed an itchy (and oddly inconsistent) trigger finger.

  • Jeff Wegerson

    I’m waiting for the full extension into Edgewater to get a membership.

  • Jeff Wegerson

    I guess I’m thinking of all the loop hotel taxes and other stuff like that.

  • I’ve attached my medium-large messenger bag on the front rack:
    http://www.flickr.com/photos/jamesbondsv/12105221503/

  • Alex_H

    Anne A posted (above) that Steven’s post was incorrect in its description of the survey’s questions and presented the questions from the survey she received as evidence.

    I posted a quote from Steven’s article: “The surveys Divvy is sending vary, with different versions of the pricing questions randomly distributed, Greenberger said.”

    I don’t know why the comment was deleted. Was it perceived to be too rude? Should I have couched the quote with some kind of softening language?

    I’m on board with the site’s policy of deleting offensive comments in the name of raising the level of discourse, but it would be nice to have some kind of note, “Comment deleted for ____ reason,” or something, visible.

  • BlueFairlane

    Oh, I’m fine with them deleting comments for whatever reason, and I do appreciate it when they’re trying to eliminate the truly offensive. It’s their world; I’m just trolling in it. I just find it a bit random at times, and some comments get deleted for infractions much less severe than those in other comments left standing. One particular frequent commenter, for instance (I won’t name names, but let’s call him “Bryan”), will post several versions of the same comment in the same tone, but only half of them will be deleted. And sometimes the reason is just a puzzle, which makes it difficult to know what to avoid. A short explanation would be useful.

  • I removed it because it was a duplicate of my own comment and I applied our comment policy too judiciously. I’m sorry for removing it and I’ve restored it.

  • Alex_H

    I could swear I commented before you did. But thanks for the explanation; I appreciate it, Steven.

  • Alex_H

    I’ve seen John give polite warnings many times explaining the comment policy; I think that is a good approach to first-time offenders and it helps all of us understand what is and isn’t permissible.

  • It’s quite possible we were responding simultaneously!

  • Alex_H

    What if we had simultaneously posted the same thing word-for-word? THAT would be cool.

  • Actually, per Streetsblog Editor-in-Chief Ben Fried, repetition is not a basis for deletion. The point of the line “comments that we feel don’t add any real value to the conversation that’s underway” is that comments should be on topic.

    Sorry for the mix-up. We try to be fair about moderating comments and keep the trolls in check in order to maintain a reasonably civil environment in the comments section, but we have dozens of comments to read each day and we occasionally make errors in moderating or miss objectionable comments. Please bear with us. Thanks.

  • Alex_H

    I really appreciate the responses, guys. Now I feel silly for complaining. Keep up the great work!!

  • Thanks Alex, and thanks for reading.

  • what_eva

    I would hope they’re looking for other populations to survey as well. First year members aren’t going to be a good representation of potential membership. ie, they need to find out what would get more people to sign up, and they’re not going to get that information from early adopters.

  • Anna Schibrowsky

    What sold me on the $75 annual membership is if you use it 11 days out of 365 you’ve gotten a better deal than buying 11 $7 day passes. I did wait until they installed stations in my neighborhood, so I expect as they roll out stations in new places they’ll get new members.

    I haven’t used the front rack, but I have carried a lot on Divvy using my backpack. The Divvy bikes are also really stable, so I’ve carried home a doggie bag in my hand while piloting Divvy with the other hand.

  • WestLooper

    Chicago is an expensive city. $65 bucks is three longish cab rides to the north side from downtown.