Here is an interesting article in the New York Times about the subsidized bike rental system in Paris (HT to Briggs Armstrong).
Many of the specially designed bikes, which, when the system’s startup and maintenance expenses are included, cost $3,500 each, are showing up on black markets in Eastern Europe and northern Africa. Many others are being spirited away for urban joy rides, then ditched by roadsides, their wheels bent and tires stripped.
With 80 percent of the initial 20,600 bicycles stolen or damaged, the program’s organizers have had to hire several hundred people just to fix them. And along with the dent in the city-subsidized budget has been a blow to the Parisian psyche.
It would not have required a superhuman intelligence to anticipate this outcome.
One can rent a bike for a price of one euro for a day. One does not have to show any responsible employee that the bike is returned, more or less, in the same shape as taken. And this rental service is offered in the biggest city of the country – where vandals or careless people are no less anonymous than anybody else and will accordingly be relatively shielded from disapproval (assuming anyone would even pay attention). How could one not expect some variant of the “tragedy of the commons“?
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I know the solution! Subsidize oil production to make driving cars cheaper so people will rent the bikes less.
Everybody wins! \o/
Well, it happens that this bike service is part of a larger policy of reducing car driving in Paris…
Perfect! After we subsidize oil enough to discourage the use of the giant bike rental system we’re subsidizing, then we can subsidize electric rail through the city to discourage the use of oil (that we’re still subsidizing)!
Don’t you’d just wish they’d dump all that paper into giant furnaces? It’d be better than whatever will happen when they try to spend it to “help” with whatever problem, real or imagined…
Subsidy electric rail? Already done!
There was no tram anymore in Paris since the 50s. But the city has spent a huge amount of money these last few years to build new lines.
Oil is subsidized far more than anything alternative transportation gets.
The point is that all subsidies are bad, regardless of what they are. It’s redistribution of wealth towards pet projects via use of force, whether it’s big oil or little bike, it’s still wrong.
I would generally agree that subsidies are bad in comparison to taxes because they promote overconsumption, in a world of rapidly diminishing resources. But in a few cases I think they are useful and essential, the most pressing example right now being electric transportation. The urgency of getting off fossil fuels is so important (and the markets have been so massively distorted lately to hide that fact) that big subsidies should be thrown the way of electrification, or at least, more than what oil gets for sure! The established oil industry is also riding a wave of economy-of-scale efficiencies over the last century that emerging alternative technologies have a hard time competing with, simply because of scale, not inherent fundamental economics. This is made worse when small portions of the billions in profit made by big oil are used to strategically squash emerging technologies before they have a chance to get a foot hold.
Ah, the classic scion of market failure. Sadly, you don’t get to prove your case for subsidies for one thing by saying how important you, personally, think it is. And you especially don’t get to prove your case by pointing out the negative effects of other subsidies!
Let’s say we DID subsidize, say, hydrogen fuel cells instead of oil. Why wouldn’t the negative effects on the economy be exactly the same? Why wouldn’t the fuel cell companies use their privileged position to squash emerging, superior technologies? Why wouldn’t the price of hydrogen (and electricity) skyrocket compared to other goods in response to money-pumping just as the price of oil is doing now?
It really doesn’t matter where the subsidies and privileges are directed. The results are destructive either way. Purge them all.
Watch out, Seattle. The guy probably works at Ballard.
Xavier,
Just so you are aware, they are doing the same thing with cars: http://online.wsj.com/article/SB10001424052748704681904576313193890414636.html
If they wanted a commons, they should have used disposable $20 bikes instead of heavy duty $2000 bikes.
According to the correction at the end, the bikes cost roughly $1050 to make, with the rest of the figure given in the article proper being for infrastructure; the point still stands.
Why are they so expensive? Titanium frame, carbon fiber frame? You can get a Trek mountain bike for $450. Is this like the defense contractor hammer or toilet seat?
A LED headlight and a dynamo hub to power it. The two could cost at least $200 retail in the US, more if you are trying to get really good components. Fenders, cable lock, basket, metal pieces protecting all the cables, and what ever locks it to the rental station can all add up, too. They don’t look like they are pleasant to assemble either.
I do not know the details but it seems clear that so far the main source of income is the taxpayer. Price determination should then be altered in the same way it has been for the toilet seat.
As a side note, there must be some electronic device in the bike to record where and when it is taken.
They can easily be outfitted with a Skylink or Lojack device. A GPS transmitter can be welded into the inside of the frame, preferrably in a spot where if it were to be cut out, it would render the bike unusable.
KWebb,
LED headlights cost about $2 here in Canada… fancier models up to $10. As for a dynamo, LED’s use very little power and in any case I have seen self-charging headlights for as little as $40… and that is without a bulk discount.
If you want to see expensive, look at a Roark Custom titanium framed bicycle. Those things sell for $8,000. A $1,050 bike in union-heavy France is a steal if you think about it.
Liberals try this in city after city and the results are always the same. Unexpectedly!
It isn’t so much that they are “Liberals”, the main thing is that people in government will always seek ways to expand the size of government. That is what they are programmed for, as human beings – to continually seek to better their lives by expanding their material wealth.
If they worked for a private, competitive business then they could only get rich by serving the public efficiently and effectively, or else they would lose their customers and they would not get paid. But because they work for a government monopoly which is already guaranteed the financial support of 100% of the population, the only way that they can increase their wealth is to manage the monopoly as inefficiently and ineffectively as possible. Instead of attracting new customers, which they cannot do because everybody is already compelled to support them, the monopolists must screw up their jobs as much as possible. Screwing up makes their services more costly and therefore more remunerative.
It isn’t a Liberal/Conservative thing. Both of these political factions, when they get in power, operate in the same way. Conservatives sometimes talk like they dislike government but that was proven to be a lie by big-spending conservatives like Ronald Reagan and the Bush family. Conservatives seem to prefer to expand government overseas (using the military) and Liberals prefer to expand domestic government spending, but they both love all forms of Big Government. That is why, for example, Bush expanded the domestic welfare state in the form of Pharmacare and Obammy expanded the foreign wars while only pretending to end the occupation of Iraq. In every case, the expanded government services are managed in the most inefficient and ineffective way. The failed bicycle program is a tiny, perfect example of the exact same kind of behavior that has screwed up both the US military empire and the US and European welfare states. It is the inevitable result of any monopoly which is supported through force.
In other words, screwing up their jobs and screwing the public is what governments do, no matter what their partisan political label.
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