Divvy Is Hiking Membership Fee to $99, Adding an Installment Option

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While Divvy has previously used CMAQ money to cover operations shortfalls, they probably won’t need to in the future. Photo: John Greenfield

The bad news: Divvy’s announced today that their annual membership fee will be rising from $75 to $99, starting on February 1. The good news: The bike-share system will be offering a new option of paying for a membership in monthly installments.

When Divvy launched back in June 2013, yearly memberships cost $75 and 24-hour passes were $7. In July 2015, the day pass price was raised to $9.95. That change didn’t affect most Chicagoans who use the system, since about two-thirds of the passes are purchased by out-of-towners, while the vast majority of members are local residents, according to the Chicago Department of Transportation.

Also in July 2015, the city rolled out the Divvy for Everyone equity program, an attempt to address the system’s lopsided membership demographics. An earlier survey of members had found that, as is the case with most American bike-share networks, Divvy membership skews white, male, young, affluent, and well educated.

The D4E program offers one-time, $5 memberships to low-income Chicagoans, and waves the usual credit card requirement. The program, which is funded by a grant from the Better Bike Share Partnership, plus matching funds from Blue Cross Blue Shield, has been wildly popular, with more than 1,100 residents signing up within five months.

The upcoming price hike for regular Divvy memberships is necessary “in order to maintain the high level of customer service that our users have become accustomed to and to continue to grow the program,” according to CDOT spokeswoman Susan Hofer. She noted that over the last two-and-a-half years, the system has expanded to have the largest coverage area of any North American bike-share network.

Hopefully, the extra revenue will be used to address the system’s growing pains. At a recent Mayor’s Bicycle Advisory Council meeting, South Side community representative Anne Alt noted that there have been more problems with bike availability this year, as well as maintenance issues like non-functional headlights.

D4E manager Amanda Woodall responded that availability issues are a result of the system’s popularity. Woodall added that Motivate, the company that runs Divvy for CDOT, as well as several other bike-share systems around the country, may use new technology to estimate demand in the future, and more bikes may be added downtown.

Even at $99, a Divvy membership will still be a bargain. New York’s Citi Bike program raised their annual fee to $149 this year, and a yearly CTA pass is a whopping $1,200.

The new monthly billing option costs $9.95 a month and requires a one-year commitment. “By offering a monthly payment plan, we’re providing members with more options and reducing barriers caused by requiring a one-time lump sum payment,” Hofer said. “This option gives members more flexibility in their monthly budgets.” She noted that Chicago is one of the first big cities in the country to offer monthly billing.

On the one hand, the installment option will make the system more accessible to low-income residents. These include D4E members who will be required to pay full price for their second year of membership.

On the other hand, as is often the case in our society, having less money to pay upfront means you pay more in the long run. People who opt for monthly billing will wind up paying $119.40 for the year, about 20 percent more than residents who can afford to pay in a lump sum. Presumably, the extra expense goes towards the additional administrative costs of the installment plan, but the extra fees still seem somewhat regressive.

All the same, offering a monthly billing plan that is more expensive than paying upfront is arguably better than not offering one at all.

  • Andrew Bedno

    Whoa, didn’t know it was going that high. But thanks for the perspective.

  • BlueFairlane

    Seems kind of early for a 32% price hike.

  • Pat

    I’m interested to see what kind of cancellation fee there is with the month-to-month.

    I wonder how creative Divvy could get with pricing. Personally, I use it year round but I bet there would be many who would want it for just summer months. Pay the $10 for the key and then you can add monthly passes to it, similar to a Ventra card.

  • Erik Swedlund

    Following the one year commitment, is the membership then month-to-month, or does a new one year commitment begin?

    I like Pat’s idea of a seasonal pass. I think lots of people would find that appealing: “Oh, it’s starting to warm up in Chicago. I think I’ll get that Divvy Season Pass for some summer fun!” Make it $75 for April through October.

    Even at $99, I think Divvy is an incredible value. However, I also feel that if we want to encourage its use, it should be subsidized more to provide a lower price for those that have trouble affording it. I guess we’ll find out in 7 months, but I’m wondering how many of those in the D4E program will continue as full-priced members.

    It’s not in the public announcement, but obviously there are changes to the Divvy Corporate and Community Membership Programs, too. As the contact person for my company’s “Second Gear” corporate membership program, I received an email outlining the changes–summarized here: https://drive.google.com/file/d/0B7ZNYmQNb5FrUXNmZ1kwazJGWUU/view

    Since my membership will renew in July at still just $40 now, I intend to stay with Divvy despite the fact that I recently moved to Maine. On my first business trip back to Chicago in November, I relied on Divvy enough that I would have spent that $40 in day passes just for one visit!

  • Anne A

    I’m glad that they’re offering a monthly payment option for annual membership, which I think will make Divvy affordable to a LOT more people who may not be able to come up with the full amount up front.

    We’ve seen major growing pains in the last year. They haven’t been able to maintain anywhere near the same quality of service they did previously. I would much rather pay $99 per year if it means that they’re able to maintain equipment better (eliminate the problem of broken lighting and hubs, which has been a BIG issue this year) and do a more effective job of rebalancing so that bikes and docks are available where/when we need them.

    I certainly haven’t gotten my money’s worth this year. Lack of availability and broken equipment have been the reasons why. Having few or no bikes available in and near the Loop after 5 pm has eliminated many of the potential Divvy trips I would have made. Lack of open docks where I needed them has eliminated a comparable number.

    If this increase allows Divvy to return to higher quality, more reliable service, it’s well worth it.

  • Pat

    Yah, the re-balancing efforts at 5PM in the loop have been dismal this fall.

  • And there’s a 60% difference between the $75 annual membership fee now and the $120 1-year monthly installments fee.

  • I think this is a great idea. A good thing about CTA monthly passes is that you don’t have to commit for a year. Sure, you’re not responsible for CTA equipment like you are for a Divvy bike, but use the $10 key fee, and they’ll keep your credit card on file, so when things go awry, Divvy still has a way to keep you liable.

  • Do you have any insight as to why there are three corporate programs? Why doesn’t Divvy let the corporation decide how much of the member’s fee the corporation will subsidize?

  • johnaustingreenfield

    “Following the one year commitment, is the membership then month-to-month, or does a new one year commitment begin?” The latter.

  • Erik Swedlund

    I don’t know why, but can speculate. These three levels have existed from the start, plus a fourth was offered called “All In,” in which the company would completely cover both the membership fee and any overtime fees (I haven’t heard that mentioned since). I began the conversation between my company and Divvy in early June 2013, and there was a good bit of back and forth getting details and signing paperwork; with the lead-up to launch, they were understandably very busy and the process stretched into July. I suspect the levels reduced the amount of work on their end keeping track of each company’s plan. Furthermore, the different levels have varying total contribution from employer and employee such that Divvy doesn’t receive the regular full price of an annual membership; determining the discount for a company’s free choice of subsidy would add a further complication. Lastly, I think presenting a few simple options for a plan helps “selling” a company on a corporate membership–in my case I was able to point to one as a great fit when presenting the idea to our president.

  • Anne A

    Almost non-existent at most locations.

  • What exactly is Divvy administering on their end? Are they just keeping track of which members are part of which company and then how much should they bill the member and then bill the company?

  • Ben Stewart

    Think about the people who can’t afford a yearly payment of $100. And then imagine charging that group of people an *extra* $20. That’s completely crappy.

    The monthly payment plan should be the same total price as the annual. If that means Divvy makes a little less money–which may or may not be the case–then fine. That’s more acceptable than charging people for being poor.

  • Erik Swedlund

    Frankly, they seemed rather scattered at the outset, and we’ve had ongoing problems with the process still. The method: Divvy provided me with a set of coupon codes, one of which I give to a fellow employee if they want to sign up. When they use that code, they are charged the discounted price. Later, Divvy sends us an invoice listing all the people who have signed up and the company’s share to pay–plus those memberships that have automatically renewed. We’re given a short time to ask them to remove anyone who is no longer an employee, and then pay the invoice. So, yes, I surmise they are keeping track of members at companies (originally by knowing which coupon codes were given to what companies).

    Though it seems popular (I count 321 organizations on Divvy’s list of corporate and community membership programs), I have first-hand knowledge that not everyone at Divvy is aware of the programs: last summer, at the time of my renewal, I was unaware that my credit card on file had expired. A couple of days later, when I tried to check out a bike, it wouldn’t work, so I called Divvy. The phone representative helped me put in my updated credit card information, but wasn’t aware of the program when I asked if I would properly get the discounted rate when she reactivated my account. When she did run the card, she said, “oh, the charge was $30,” so I knew it worked.

  • Imjames76

    I let my membership lapse after one year, mainly due to lack of availability. Sounds like I made the right decision. It’s certainly convenient, but like many things in Chicago, unreliable. I wouldn’t suspect the increase in membership fees will go to improving the program, it’s more likely to keep the lights on.

  • kclo3

    Philadelphia’s only membership model is a flat $15/month, no yearly option available. Which sounds super expensive at $180/year, but is still claimed to be more “affordable” on the basis of only renewing selectively throughout the year. It could less beneficial with the added yearly commitment, but NACTO also claims that forcing monthly renewals boosts retention rates.

  • djstandby

    Back of the envelope calculation for 2015, Divvy saved me $105 last year. The vast majority of my trips were commuting from my house to the Blue Line which I excluded since they technically save me no money (but lots of time). Outside of the that I took 20 trips that replaced an uber/taxi trip and 25 which replaced a cta bus trips. That adds up to roughly $170 in total savings (using $2 a bus trip, $6 an uber/taxi trip) minus my $65 reduced membership (BCBS member), $105 in savings, much more in convenience and time. $99 is still a deal for me.

  • BlueFairlane

    I think the big question for Divvy is going to be just how many of its members are in your position. Many won’t be and will decide not to renew.

    I’ve been generally supportive of the Divvy concept, but the pricing structure has always bothered me. This only increases my reservation. The city seems far more interested in making bike share profitable than in getting people riding bikes.

  • I don’t believe anyone would be put off by the modest increase.

  • 32% is misleading when the base amounts are so small.

  • BlueFairlane

    Not everybody considers these amounts small.

  • BlueFairlane

    I disagree with you. But we’ll see how it plays out.

  • BlueFairlane

    Should have included this thought in my first reply, but it just occurred to me.

    There is a phenomenon I’ve often observed when traveling by car that is best typified by an incident I saw once just outside Indianapolis. This was during the era of $4 gas. There were two gas stations at the exit, and one was selling gas about 10 cents per gallon cheaper than the other … I don’t recall the specific prices, but let’s say one was $3.99 and the other was $3.89.

    So say you’re filling up a 10-gallon tank. Buy gas at one station, and you’ll pay $39.90. Buy at the other, and you’ll pay $38.90. You’ll save a buck, about 2.5% of your total purchase. But guess which station had the line of cars sitting and idling their engines while they ran their air conditioners for five or ten minutes, waiting for a pump to clear. Cars that pulled off the exit when I did were still waiting after I spent my extra buck and left. They probably burned as much money waiting as they would have spent across the street.

    Some people ignore the specific cost of something that they want, but there are many people who base financial decisions on small amounts. Very few of the people who comment on Streetsblog seem to fall into that category, but some percentage of Divvy users will be.

  • Sadly, its once again true, being poor is rather expensive,

  • There’s been discussion in this thread about “what if there was a month-to-month or 6/9-month option.” I wonder if that would provide enough revenue *annually* to keep the system operational, or would it only provide enough revenue during the periods when all of these non-annual memberships are active.

  • Yup.

  • kclo3

    As long as you price it to break even within the 7-8 month range, I guess.

  • I am trying to see through my economic blinders, but we are talking about 25 bucks. That’s two cab rides maybe. One modestly priced dinner out.

  • BlueFairlane

    And there are some people who consider a cab ride a luxury and will take maybe one or two a year, if that. Some people can’t afford a cab. Some people just don’t like to spend the money unnecessarily when there are so many adequate options for getting around that are considerably cheaper.

    I understand that you personally don’t consider $25 an amount worth worrying over, and that’s fine. I also understand that a lot of other Streetsblog readers share your feelings about the value of money. But I think it would be a good idea for the people who run Divvy to understand that there is some portion of the population that does not share this opinion. And I think that this time next year, we’ll have an understanding of how many such people there are.

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