Neal: The Blue Indy Autopsy

December 26, 2019

by Andrea Neal

Indianapolis taxpayers are out millions for the city’s relentless effort to force motorists to give up their automobiles. The demise of electric car-sharing service Blue Indy, announced with a whimper on Dec. 20, comes as no surprise to anyone who has studied the urban transit landscape. Give the equally-trumpeted Red Line Rapid Bus a few years to meet a similar end.

What began five years ago with a highly-publicized deal between the outgoing Republican Mayor Greg Ballard and French company the Bollore Group will conclude on May 21, 2020, when the company ceases operations in Indianapolis. The program is losing money, the company said, and has no chance of becoming profitable anytime soon.

From the beginning, this deal was doomed. The City-County Council had no say in the project, there was no competitive bidding, and no public hearings were held to solicit public opinion on the merits of investing $6 million in taxpayer funds. There was no vetting of Bollore group whose inaugural car sharing experience launched in 2011 in Paris, a city with almost three times the population and an entirely different transit culture (and which ended its contract with Bollore in 2018 due to chronic budget shortfalls).

In return for tax dollars, Blue Indy was supposed to share profits with the city, but the service never made a dime. In the meantime, ratepayers of Indianapolis Power and Light were socked with $3 million in rate hikes to underwrite distribution system upgrades for power charging stations installed along the streets where Blue Indy cars parked. Taxpayers spent millions more to reimburse the city’s private meter operator, ParkIndy, for lost revenues from meters removed by the city to make way for Blue Indy parking spaces.

The service lacked customers. As of August, the company reported 3,000 active members — a fifth of the total it projected necessary for profitability — served by 200 cars parked at 92 stations.

The business model was never viable because it suited only a sliver of the motoring public: residents who lived near parking stations and needed transit to locations that also had stations; for example, from Broad Ripple to the Indianapolis airport. Users could rent and return cars at stations located across the city for a one-time fee ($8 for 20 minutes and 40 cents per additional minute) or annual membership ($9.99 per month plus $4 for 20 minutes and 20 cents per additional minute. Folks wishing to rent a car for a day or to get to work could do so for considerably less using other widely available options, including IndyGo bus, taxicab, or Uber and Lyft ride services.

The honest truth – one that Blue Indy managing director James Delgado himself admitted – was that the only way to attract more customers was for Blue Indy to talk people out of their cars. And not a single study shows Indy motorists are ready to do that. “We still have a lot of work to do to grow the membership base here and change the culture from a car-ownership culture to a shared-use and mobility culture,” Delgado told the Indianapolis Business Journal this summer.

Comparisons to the city’s latest grandiose transit initiative — the 13-mile, fixed route all-electric bus called the Red Line — are both inevitable and merited. Like Blue Indy, this $96-million initiative was launched with little public buy-in; in fact, the voter referendum that enabled a tax hike to help pay for the system was marketed as financing systemwide mass transit improvements that would benefit the entire city. Those other improvements have since been delayed.

Like Blue Indy, the financial success of Red Line will hinge on ridership numbers that are not supported by data, a fact seemingly acknowledged in January by IndyGo spokesperson Lauren Day who said success would not be judged by number of riders but rather the line’s impact in strengthening communities and economic development along the route — a trend known as transit-oriented development. In 2016, urban growth expert Randal O’Toole warned Indianapolis not to move forward with the project, telling The Indiana Policy Review that it “follows an urban-planning fad that has failed in other cities that have tried it.”

As with Blue Indy, the vendors hired for various pieces of the Red Line project lacked track records of quality work. Most notably, Indianapolis contracted with China-based bus maker BYD that had repeatedly missed deadlines and delivered defective products for a similar transit system in Albuquerque. No surprise here: In March, IndyGo announced its electric buses were failing to hold a charge for the 275-mile driving range promised by the manufacturer. It perhaps goes without saying that ridership has already plummeted since the celebratory launch of the Red Line on Sept. 1 when the weather was delightful and the service was free.

The Blue Indy fiasco, and the almost certain financial failure of the Red Line, bring to mind an old English proverb, “You can lead a horse to water, but you can’t make it drink.” It is time for city planners to stop dreaming up transit projects that waste millions when all available evidence suggests that folks with cars are not willing to abandon them for mass transit. And for those who need mass transit, there are cheaper and more innovative ways to get them to their destinations.

Andrea Neal is an adjunct scholar with the Indiana Policy Review Foundation. Her latest book, “Pence – The Path to Power” is available here online from Indiana University Press or at a bookstore near you.


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