The $1.1 million endeavor means the city's fleet of bicycles will grow from 37 to 350 by June and possibly to more than 700 in 2018.
Joshuah Mello, the city's chief transportation official, said the main draw of the new smart-bike system, operated by Motivate and sponsored by Ford, is that it will be part of a network growing in Bay Area cities from San Jose to San Francisco, "making it one of the largest systems in the entire world."
Motivate's agreement with the Metropolitan Transportation Commission is for a large-scale expansion of the Bay Area Bike Share system from 700 bikes to 7,055, including 4,500 in San Francisco, 1,400 in the East Bay and 1,000 in San Jose.
This coordination allows cyclists to use a single membership to access 7,000 bicycles across cities, Mello said.
City Manager James Keene said the coordination is one of the main benefits of the partnership because it is a step toward creating an interconnected network.
"Solving the first and last mile for transit commuters, providing a viable alternative to driving solo and putting in place a bike infrastructure to utilize our many miles of bike paths can only effectively be accomplished on a regional basis," Keene said in a statement.
The Ford GoBike smart-bike system will have GPS tracking enabled on the vehicles from Social Bicycles, giving users more options in where they can pick up or drop off bikes in addition to the 35 docking stations to be installed in the city.
The City Council voted unanimously last week to have city staff craft a contract with Motivate, though council members shared some concerns about cost versus reward.
Councilman Eric Filseth asked how bike operators plan to attract users when the existing bike share program in Palo Alto is so under-utilized.
"If this works and lots of people use it and so forth, it would be absolutely wicked cool," Filseth said, "but there's technology risk and market risk."
Mello said Bay Area cities must "have a pretty complete network for people to actually start using it."
"You can't just run a bus for a couple of blocks and then complain that nobody is using it because it's just not a feasible mode of transportation," Mello said. "So Bike Share has to be where people want to go. ... We have to roll out a pretty dense, substantial system in order to truly test if it's going to work."
The city's goal is to reach the industry standard of one trip per bicycle per day, Mello said.
Palo Alto's existing system was part of the Air Quality Management District pilot program in 2013 that issued 700 bicycles to Palo Alto, Redwood City, Mountain View and San Jose.
With its 37 bikes, Palo Alto's system averages 0.17 trips per day per bicycle, according to Bay Area Bike Share program statistics.
In comparison, Mountain View has a rate of 0.39 trips and Redwood City 0.08. San Francisco fares the best, with 2.51 trips.
In a staff report, Palo Alto transportation officials said the low utilization rate is likely because of "an inadequate number of bicycles and hubs resulting in a small coverage area with a low hub density."
New hubs will be installed in addition to the three on University Avenue and two on Park Boulevard.
Mello said the most popular routes right now are for trips between the two most distant hubs, from the downtown Caltrain station to the one at University and Cowper.
"That tells me that we're not really serving the market," Mello said. "Moving forward, if we have more coverage and enable people to make longer trips to and from Caltrain and our business districts and downtown and Cal Ave, I think we're going to see an increase in the number of trips per day per bike."
Because of the GPS system, Palo Alto will be able to see how people use the bikes, noting popular hours and routes and the difference in habits between daily and annual riders.
"All this data will help us focus our marketing efforts ... and help improve the performance of the system," Mello said.
Councilman Greg Schmid said he was concerned about bicycle distribution: What if you get out of work and all the bicycles are gone?
Mello said the city will have to position the hubs in a way where there is even activity instead of just one-way activity. A hub at Stanford Research Park might be difficult for this reason, Mello said.
"We're definitely going to have to think about how to make sure the bikes remain balanced throughout the day," Mello said.
Residents will get an opportunity to suggest station locations in coming months. If contract negotiations go according to plans, the city hopes to start testing equipment in May, Mello said.
The city plans to spend $1.16 million for upfront costs to buy and install 350 bicycles and hub equipment. In turn, Motivate will pay operating costs for the first 350 bikes during the five-year contract.
Part of the cost to buy the bicycles and other equipment will be offset by a $171,429 Transportation Funds for Clean Air grant through the Santa Clara Valley Transportation Authority.
If Palo Alto proceeds with the second phase of the program in 2018 to buy a second set of 350 bikes, about 88.5 percent of the cost could be paid for with funding from the Metropolitan Transportation Commission if a grant request is approved.
The city would pay $420,000 per year in operating fees for the second set of 350 bikes.
Such a citywide system will also require the hiring of a new full-time employee at a cost of about $100,000 to $200,000 per year, according to a staff report.
Andrew Boone, an avid bicyclist, said the proposal is a better system than the 37 bicycles the city currently has, but his biggest concern is that the new system is not "revenue neutral."
The city will not get any revenue from the program to support the ongoing cost of a new employee, Boone said. He also expressed concern about working with Ford, an auto giant that sells cars, undermining a goal of independence from fossil fuels and automobiles that Palo Alto is trying to promote.
The current fare structure set by Motivate and the Metropolitan Transportation Commission: A daily, 24-hour membership is $9, a three-day membership is $22 and a one-year membership is $88. The fares cover rides that last 30 minutes at a time.
Mello said the bike share system is meant to take riders for a first or last mile from public transportation, not to let them rent bikes for a day or days at a time.
The system would charge an escalating overage charge for the time one keeps a bicycle for more than 30 minutes. The first 31 to 60 minutes over would cost $4.
There is an extra fee of $3 for bikes that are returned to a location that is not a hub.
Motivate is working to ensure that the system is interoperable with the Clipper card, Mello said.
©2016 Palo Alto Daily News (Menlo Park, Calif.), Distributed by Tribune Content Agency, LLC.
