1,000 Groupon deals won’t save taxpayers from Divvy failures

With winter nearly upon us, riding a bicycle in Chicago is probably the furthest thing from most people’s minds – except for the more than 1,000 people who’ve recently purchased a Divvy Groupon. Divvy is Chicago’s taxpayer-funded bike-share program, through which users can buy daily or annual memberships to rent one of more than 3,000 bicycles...

With winter nearly upon us, riding a bicycle in Chicago is probably the furthest thing from most people’s minds – except for the more than 1,000 people who’ve recently purchased a Divvy Groupon.

Divvy is Chicago’s taxpayer-funded bike-share program, through which users can buy daily or annual memberships to rent one of more than 3,000 bicycles at 300 stations around the city of Chicago.

Under controversial circumstances, Alta Bicycle Share won a $65 million, five-year contract from the city of Chicago to run the Divvy Program. The total included $28 million in federal and local grants.

Taxpayer subsidies for the program are a minimum of $9,600 per bike for the first year alone. But if things don’t pan out taxpayers could be on the hook for more than $17,000 per bike over the five-year contract.

The Groupon deal gives cyclists the opportunity to buy three 24-hour passes for $12.99, or $65 for a one-year “Gear” membership.

Sounds like a fantastic deal if you like bikes, but not so fantastic if you’re a beleaguered taxpayer.

At the $65 cost for a one-year “Gear” membership, it would take 1 million non-Groupon sign-ups more than five years to cover the full cost of the contract with the city, not including any promotional costs paid to Groupon and 24-hour memberships.

Unfortunately, the program has only attracted 10,810 annual members as of Oct. 29. If these low ridership trends continue, taxpayers will be left footing the tab for the lion’s share of the Alta’s Divvy experiment.

The taxpayer-funded program should be scrapped as soon as possible in favor of private companies that stand to profit from the venture taking the risks of implementing such a system.