Overtime fees pad Divvy's bottom line

Users rack up more than $700,000 in late charges

Chicago's Divvy bicycle-sharing program took in up to $2.5 million during its first five months, a figure driven by tourists and others who bought daily passes and racked up the majority of overtime fees, according to a trove of preliminary customer data provided by city transportation officials.

As much as $703,500 came from late charges, which kick in when bicycles aren't returned within 30 minutes. Just a sliver of that money was generated from Divvy's clock-conscious annual members, who checked out bikes for short trips instead of hopping into taxis or riding public transit, city officials concluded.

Lincoln Square resident Carl Boyd uses his yearly membership an average of twice a week and said he has taken only two trips that lasted longer than 30 minutes.

"I didn't have a big problem with one small fee," said Boyd, 43. "Transit fare is $2.25, and a cab is way more than that. And the hassle of taking my own bike everywhere is just way too much."

It's not clear whether the Divvy public-private partnership, supported by $25 million in federal funding and $6.25 million in local matches, is turning a profit.

A financial accounting will be conducted at year's end to determine how hundreds of promotional free daily passes and other variables will affect the final revenue figures, city officials said. The raw statistics on customer use, focusing on average revenue per trip from July through November, did not distinguish between the free passes and paying customers.

The Divvy contractor, Alta Bicycle Share Inc., is being paid from the user fees, according to the Chicago Department of Transportation, which is overseeing Alta management.

"To the extent the system earns a profit, the city and Alta share the profit," said Scott Kubly, managing deputy commissioner at CDOT.

The data for the five months show that most of the total Divvy charges, about $1.6 million, were for 24-hour passes and the overtime fees associated with the passes, which city officials said were likely bought by visitors or individuals jumping on the rental bikes for "spontaneous trips."

"We are pleasantly surprised how quickly tourists have taken to Divvy," Kubly said.

"Annual members are using the bikes for short trips, as we expected," said Kubly, adding that he expects those members will each log 120 trips a year on average.

The roughly 131,000 daily-pass customers racked up more than $656,600 in overtime charges (on top of about $917,000 in fees for 24-hour passes). Annual Divvy members, on the other hand, amassed not quite $47,000 in overtime charges, the data show.

Boyd, the commuter from Lincoln Square, said he hasn't heard anyone complain about the overtime fees and has even seen people go to parties with the light-blue bikes, knowingly racking up fees until they leave.

"They said, 'Oh yeah, I know I'll get charged something, but I'm not gonna be here that long,'" Boyd said.

The city estimates that annual Divvy members will pay an average of $15.55 a year in overtime charges, while 24-hour pass customers will incur an average of $5 in overtime fees.

Overtime charges start at $1.50 for annual members and $2 for daily pass customers for the first hour, and peak at $72 for up to 24 hours. Customers who don't return the bike within 24 hours face a possible $1,200 lost bike fee.

Overtime fees are charged to the credit or debit cards of Divvy customers for trips lasting longer than 30 minutes. Both 24-hour pass customers and annual members are allowed an unlimited number of trips of 30 minutes or less.

That formula doesn't sit well with all Divvy users.

Tourist Elena Galli was mumbling to her husband in Italian as the pair contemplated checking out bikes earlier this month at the station at State Street and Wacker Drive. Galli found it odd that they would have to check the bikes in at another station within 30 minutes to avoid an overtime fee.

"What is the reason?" said the 42-year-old woman from Milan. "It would be nice to not have this limitation."