Pronto needs city buyout before end of March, how did we get here?

Pronto and the 2nd Ave bike lane launched around the same time. Neither has since expanded as planned.

The hard deadline to save Pronto is March 30.

With more than 30,000 people taking 144,000 trips in the first year of operations, supporters and City Councilmembers are scratching their heads trying to figure out how Pronto got into such a dire situation with hardly any warning to the public.

Ridership in the first year was lower than projected, though many people involved are now questioning how realistic those projections were. A little over half of operating costs are paid by user fees, less than was planned. That's a problem, sure, but likely not insurmountable through adjustments in station locations, expanded marketing, winning grants, growing sponsorships and/or city investment.

So here's where the story gets very frustrating. How did a solvable problem turn into a do-or-die budget showdown in City Council chambers? The answer depends on who you ask.

SDOT staff, led by Chief of Active Transportation Nicole Freedman, blamed the budget gap on the amount of funding Puget Sound Bike Share ("PSBS," the non-profit that owns Pronto) borrowed to launch the system, payments that now sap the budget.

"[Pronto's operations] would break even today if it were city run and there were no debt payments," said Freedman told us last week.

But former PSBS Executive Director Holly Houser disagrees with this characterization of the loan.

"They're making it sound like we took out this huge loan, " said Houser, who says it was actually a fairly standard loan against the sponsorship. So basically, if Alaska Airlines puts up $2.5 million over five years, you take out a loan to get the money up front, then use the subsequent sponsorship payments to pay off the loan.

The biggest cause of the showdown, Houser said, came from city delays and miscommunications in taking over the system that have left Pronto in a leadership (and revenue search) limbo.

"Our hands were essentially tied."

The city came to the PSBS board in May 2015 - after just six rainy months of operation - with the takeover plan and a late summer date for the transition, she said (we reported about those plans in June). At that time, PSBS (whose board includes SDOT membership) gave the city their financials and explained that without more sponsorships and/or grants the system would run out of money by the end of the year. Basically, the lower ridership left budget holes that needed to be plugged.

But the takeover didn't happen. And neither did new sponsorships or grants.

So now here we are. PSBS lost its staff and much of its board in late 2015, yet it still owns this system that's about to run out of money. The price tag for the city to buy the system (including all the equipment, existing contracts with the operator Motivate and the future sponsorship income): $1.4 million.

Really, that's a pretty good deal for an already functioning bike share system. It's just a cost that the public didn't learn about until now. Which is very frustrating not just to supporters, but also to City Councilmembers, who were clearly upset during Tuesday's Transportation Committee meeting that the Council is in a position to act quickly to save it before it goes belly-up in March.

The rushed schedule means "we have to make a less-informed decision than we would like to make," said Committee Chair Mike O'Brien (watch the meeting below). "It's going to be critically important that second attempt get up," or O'Brien fears the city will have "poisoned the well" on bike share for a while.

So while there are plenty of fingers to be pointed (including Seattle Bike Blog, since I feel I dropped the ball by not sniffing this story out sooner), where do we go from here?

On that, there is no disagreement: The city should buy the system and invest to expand it. Houser and PSBS have been in favor of this plan from the start, and the city's goals with the system are laudable and bold.

Buying the system is really the only option that makes any sense. If the city doesn't buy it and PSBS shuts down, the city will have to return up to $1.75 million in national, state and county grants, which carried the condition that the stations remain in operation.

Pronto is not sunk, and it's not a failure. We know how to make it better, and we now have a more realistic idea of its user revenue. It's a terrible idea to throw all that away after one struggle (especially a struggle caused as much by bureaucracy as by the system itself).

Now that the problems are public, we can get to work fixing them. We will explore many of these ideas in future posts. But for now, Seattle should buy Pronto and come up with their plan to make it the success we know it can be.

"I believe ultimately, we're going to have one of the best bike share systems in the world here in Seattle," said Councilmember O'Brien. The question is how we get there.

A (not so) brief history of Pronto

• August 2012 - Bike share business plan leads to the creation of a non-profit called Puget Sound Bike Share ("PSBS").
• November 2012 - PSBS hires Holly Houser as Executive Director
• April 2013 - Alta Bicycle Share is selected to build and operate the system.
• September 2013 - City Council unanimously approves legislation to allow Pronto operations and stations.
• February 2014 - Newly-inaugurated Mayor Ed Murray announces a 2014 bike share launch in his first State of the City.
• April 2014 - Due to a messy bankruptcy for the maker of the most popular model of bike share equipment at the time, PSBS and Alta announce a different supply chain. Public outreach for station locations begins in earnest.
• May 2014 - The new name for the system is announced: Pronto! Emerald City Cycle Share (popular usage immediately drops the "!" and "Emerald City" parts of the name). Alaska Airlines is announced as the major sponsor for the first 500 bikes at $2.5 million over five years.
• July 2014 - We get our first look at the bike.
• August 2014 - Membership sales begin, eventually reaching 1,450 annual members sign up by the first week of operations at $85/year.
• September 2014 - Mayor Murray's budget includes $600,000 in funding for low-income bike share access as well as Yesler Terrace and Central District stations. Those funds have not yet been spent.
• October 13, 2014 - Pronto launches with fanfare.
• October 28, 2014 - New York company later named Motivate buys Pronto operator Alta Bicycle Share.
• April 13, 2015 - Pronto turns six rainy months old. Without any summer months, ridership is only around a half a ride per bike per day.
• May 2015 - SDOT meets with PSBS board about buyout plan. Pronto puts locks on helmet bins, starts charging day pass users $2 per helmet rental.
• June 1, 2015 - Pronto launches the totally awesome #ProntoGlam bike, a single sparkly unicorn bike among the fleet celebrating Pride. The bike makes an appearance in the Solstice Naked Bike Ride.
• June 8, 2015 - City submits big Federal TIGER grant application to fund a "massive" expansion of Pronto from 50 to 250 stations, announces takeover plan.
• July 10, 2015 - State transportation package includes funding for bike share in Kirkland, Bellevue, Redmond and Issaquah.
• August 27, 2015 - Houser steps down as ED of PSBS, which is pending sale to the city. She stayed on in a smaller contractor role to help with the transition.
• October 2015 - Mayor Murray announced $5 million Pronto expansion in his proposed budget. SDOT Director Scott Kubly talks with us about the takeover plan.
• October 13, 2015 - Pronto turns one year old. With very lagging U District stations dragging down the average, the system averages 0.8 rides per bike per day.
• October 27, 2015 - Feds announce that Seattle was not selected for the competitive TIGER grant.
• November 4, 2015 - Move Seattle passes, saving the transportation budget. SDOT Transit Division leader Paulo Nunes-Ueno, who was a leader in the plan to take over Pronto, resigns after less than a year on the job.
• November 17, 2015 - City Council approves the Mayor's $5 million Pronto funds, but on the condition that SDOT present a plan to spend the funds first.
• January 29, 2016 - SDOT asks Council to release $1.4 million from the budgeted $5 million to save Pronto. Public learns about the system's financial struggles.
• February 2, 2016 - SDOT presents to the City Council Sustainability and Transportation Committee. Citing other Councilmembers' desire for input, no vote was taken. SDOT will have to return with more information at the next Committee meeting in two weeks.

Watch the February 2 Sustainability and Transportation Committee meeting (Pronto presentation starts at 34:00):