Indianapolis Car-sharing Gets Results Out of the BlueIndy

By Gary Reiter

Gary Reiter serves on local nonprofit boards (including Riley Area Development Corporation) in the Indianapolis area with a focus on equity in community development, transit and the arts. Gary is a Banker with BMO Harris Bank.

Feb 17, 2016 | Smart Cities | 2 comments


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In September of 2015, the Bolloré Group, among the world’s 500 largest companies, launched BlueIndy, a revolutionary 100% electric self-service car sharing service in Indianapolis. After complete implementation, 200 Stations with 500 available cars will be located throughout Indianapolis on a 24/7 basis. Currently, 120 cars are available.

The Basics

BlueIndy offers a membership-based car share service as well as electric vehicle charging infrastructure for public use. The cars are small white hatchbacks with a battery made by Bolloré splashed with the BlueIndy logo.

Prices vary depending on the type of membership. An individual who enrolls for a year pays $9.99 per month, then $4 for the first 20 minutes of a rental and 20¢ per minute thereafter. A one-day membership is free, with a higher daily of $8 for the first 20 minutes and 40¢ per minute thereafter. Weekly and monthly memberships are available. There are no fees for parking, insurance, or gasoline (these are electric cars), though drivers could incur charges for failing to plug the car into the charger ($55) or for accidents ($500 deductible) and other member rule violations.

Bolloré has indicated it will invest $41 million into the operation and the City of Indianapolis agreed to use $6 million of city funds.

Initial Controversy and Conflicts

A lawsuit filed by the Indianapolis Auditor’s office has claimed that the City failed to publicly bid the $6 million construction project and also failed to obtain the necessary budget appropriations from the City Council. However, it appears that all the issues will be solved as the parties are negotiating a franchise agreement that will require annual payments for each station from BlueIndy to the City of Indianapolis.

Additionally, the initial roll out of the car stations caused a storm of complaints due to the lack of input sought from the community for the station locations. Many small businesses expected BlueIndy to seek more input from local business regarding the location of parking spaces in front of small business operations. Rather than take these valuable spaces, the small business community hoped that BlueIndy would make use of other spaces.

In January of 2016, BlueIndy announced that the program had reached 1,000 members with 7,000 rides since the September 2015 rollout, exceeding expectations. The similar timeframe for the very successful program in Paris resulted in fewer memberships and fewer rides. Therefore, the Indianapolis program appears to be on track for stellar performance. However, it is clear that the number of members needed (15,000 -20,000) for a profitable program could be a challenge. Bolloré expects the program to meet its member goal over a five year period with Bolloré covering any financial deficit for the program.

Real Savings and Impacts for Indianapolis Residents

I am an early annual member and the BlueIndy program has met or exceeded my expectations. My wife and I have given up the use of two automobiles.

In 2011, Researchers at the University of California published the results of a nationwide survey of over 6,200 carsharing members which uncovered data indicating that 9-13 vehicles are given up for every car share vehicle in a fleet.

4-6 cars were eliminated as a direct result of joining the car sharing program and the remainder 5-8 cars were avoided/not purchased as a result of the membership. (Source: http://www.uctc.net/access/38/access38_carsharing_ownership.pdf)

According to AAA’s 2015 Your Driving Costs study, due to declines in gas prices and finance charges, the annual cost to own and operate a vehicle has fallen to $8,698, a nearly 2 percent drop from 2014 (based on 15,000 miles). Source: http://publicaffairsresources.aaa.biz/resources/yourdrivingcosts/index.html

Based on the data provided by the AAA study, my family is saving a gross of $17,396 per year from giving up two vehicles ($8,698 per car). My net family savings depends on how much we will spend on alternative transportation costs, but even if it is halved, a net annual savings of $8,698 for my family is significant. Who can’t use an extra $725 or more a month?

BlueIndy has a goal of 500 vehicles at full implementation. If 11 cars are taken off the road for every car sharing vehicle, the math suggests that:

  • 5,500 cars will be given up in the Indianapolis area
  • Gross member savings of almost $48 million annually
  • 50% net savings (after paying for alternative forms of transportation) of $24 million a year for members and their families

Given the fact that the City of Indianapolis contributed a one-time investment of $6 million, a return of $24 million annually back to the community is a significant return on investment, a boom to the local economy and a welcome savings for these families.

Indianapolis Adopting a Start-Up City Model

In his book, Start-Up City, speaking of Private Public Partnerships (“P3”), Gabe Klein states that “Governments need to evolve beyond the insular, silo-based cultures that are rapidly becoming outmoded in an era of exponential technological change. Otherwise, they risk reducing their own influence and relevance to serve as public policy makers and consumer advocates in a world where aggressive private industries and disruptive, consumer savvy startups are innovating at lightning speed.”

A one-time City investment of $6 million that returns an annual $24 million back to the community seems to appear to be an effort by the City to function much like a midsize, successful start-up as suggested by Gabe Klein. Is Indianapolis transforming itself into a Start-Up City?

However, certain City Council leaders are upset over the failure of the Mayor’s office to obtain budget appropriations. As a result, they have threatened to tow vehicles and a slew of social media attacks ensued including photographs of a car sharing vehicle being towed for repairs and photographs gloating over a full car sharing station.

The City had a choice to either pursue a bid situation and obtain the necessary budget appropriations from the City Council or to enter into direct negotiations with Bolloré and take the $41 million electric car program offer that was on the table before Bolloré would move on to the next American city. The City chose the latter and received a $41 million private investment in an innovative car sharing program in a community with one of the worse public transportation programs in the United States. Indianapolis needed a multi-modal transportation value added solution and BlueIndy answered the need for a solution with $41 million of private funds in a P3 partnership.

My view is that the BlueIndy contract development process is a first step towards creating a proactive P3 Indianapolis bureaucracy that improves the quality of life for the citizens of Indianapolis. The end result is a $6 million one-time investment by the City with $24 million in annual returns back to the local economy. This only makes city life in Indianapolis better. As Gabe Klein argues, we cannot afford to wait for the sloth pace of change in government when it comes to adopting innovations needed for our cities to be great in this fast paced technologically changing world. Otherwise, Bolloré would have moved on and Indianapolis would have lost an innovative all electric car sharing program and $41 million private investment.

Climate Impact

My wife and I cannot control someone on a national stage proclaiming that global warming is an invention of the Chinese Government (other than not voting for that person and their political party). We can, however, take responsibility for our own carbon impact by shedding two cars and using alternative forms of public and shared transportation, including car sharing, bike sharing, ride sharing and public transportation.

There are arguments that the electric car sharing program in Indianapolis is using electricity supplied by coal and therefore, it is not a purely sustainable solution.

Given that the vast majority of power generation around the world is grid-tied, where a car is charged plays a large role in determining its carbon emissions. Indiana, largely being a coal powered state, illustrates that the climate benefits of going electric are not shared evenly around the United States, or the world for that matter.

However, we are shedding two cars and sharing a car with 999 other people at this point. The cost of manufacturing a car disappears when cars are shed and demand is lowered. Manufacturing emissions and life cycle matter. 5,500 cars will be shed in Indianapolis and not replaced. At the speed electricity is “decarbonizing,” the sustainability impacts for electric cars will improve, including in Indiana.

Conclusion

Finally, from a purely selfish view, my personal quality of life has improved immensely with transportation options. I typically use the bike sharing program to and from work. On some days, I leisurely walk. In bad weather, I might choose Uber, Lyft or BlueIndy depending on my mood. On weekends, we sometimes choose Uber so that we can enjoy a glass of wine or two and not worry about driving home. We use BlueIndy to go to events, commute to work in bad weather, especially during surge pricing by Uber, and to the other cultural districts in downtown Indy and the local businesses. One of the best Sunday Brunch options in Indianapolis – Georgia Reese’s – has a BlueIndy station right outside the front door making the trip convenient and fun. I use the $1.75 fare to ride the public bus system to the airport. Although, the four planned BlueIndy stations at the airport will make the car share options more attractive. There are some businesses that we frequent solely because of the convenient parking offered by BlueIndy.

Therefore, the announcement that BlueIndy has reached 1,000 members in a few short months is enormous. The private and public partnership to arrive at a transportation alternative solution with a major return on investment should be celebrated. The ability to positively affect the quality of life for our Indianapolis citizens and to create a model for future quality of life P3 initiatives is a major accomplishment.

The newly elected Mayor of Indianapolis, Joe Hogsett (Democrat) has promised not to roll back any of the previous Mayor’s initiatives (Greg Ballard – Republican). Mayor Hogsett’s formula for success is bi-partisanship and the Mayor is firm in his resolve to be the Mayor of ALL of Indianapolis. This commitment will ensure that innovative programs, like BlueIndy, will advance and further cement the path of Indianapolis as a Great American City.

Discussion

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2 Comments

  1. Gary, love your vision on this. We enjoyed testing BlueIndy with their introductory offer. Our family of four was able to park a Jeep Liberty 4×4 for the weekend and enjoy a ride around town–with two carseats–in a BlueIndy car. We posted photos on our journey on Twitter with the user @D_RyanWilson, tagging BlueIndy in the photos. The car was confident on the highway and in the city. Very skeptical initially but it’s a step in the right direction for our city. If we can get past the politics of the decision, it is one more step to reducing our footprint and becoming a world-class city in the area of transit.

    Reply
  2. Blue Indy would have been a good idea, if they cut their prices. My car went into the shop unexpectedly. I called them (all overseas customer service which was hard to understand) and found out it was $24.00 an hour. Why not just call a cab or let Enterprise drop off a car. Plus these people tie up key parking spaces. Hope they starve out and leave. It is amazing that anyone with that bad of a business model could sell Ballard.

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