Opinion

Felix Salmon

How to rent a bike without a credit card, DC edition

By Felix Salmon
January 6, 2012

Good news over at the Capital Bikeshare website, which has now been updated to make it perfectly clear that you can, after all, use your debit card to pay for a Bikeshare membership. The FAQ,which used to say that memberships require a credit card, now says “credit or debit card”; the signup page, which used to ask for your credit card details, now says “credit/debit card” at the top of that section. All of which means that although it was always technically possible to sign up for a membership with a debit card, now many more people are likely to actually do so.

On top of that, Bikeshare manager Josh Moskowitz tells me that some kind of installment plan should be in place “in the early half” of this year. It’s unclear whether that option will be open only to Bank on DC members, or whether it will be open to everyone.*

I still think that, in terms of getting the unbanked on bikes, the best approaches are always going to be ones which just get the unbanked on bikes, rather than ones which try to get the unbanked to open bank accounts which in turn will allow them to get onto bikes. But this is a move in the right direction — and a move which is probably going to cost some small amount of money for Bikeshare.

Remember that there’s a $1,000 fee charged to your card if your bike is lost or stolen. Now, what’s more likely: that your credit card has $1,000 of spare capacity on it before it’s maxed out, or that your checking account contains $1,000 in cash? I’d say the former, by a substantial margin. So the chances of Bikeshare having to chase down an individual when the $1,000 charge doesn’t go through are surely higher if that person signed up with a debit card than they are if they used a credit card.

So well done to Bikeshare for fixing its site and taking the risk that it might have to do more work chasing down the money for lost and stolen bikes. My gut feeling is that the marginal difference here is small. But government organizations like Capital Bikeshare are always overcautious and risk-averse, and I genuinely thought when I wrote my initial post on this that Bikeshare wouldn’t allow debit cards to be used for memberships at all. Now, let’s keep our fingers crossed in the hope that they come up with some way of being able to serve unbanked people without debit cards at all.

*Update: Moskowitz confirms that the installment plan will be available to everyone.

Comments
5 comments so far | RSS Comments RSS

“Now, what’s more likely: that your credit card has $1,000 of spare capacity on it before it’s maxed out, or that your checking account contains $1,000 in cash? I’d say the former, by a substantial margin.”

True, but if the did sequentially smaller attempts on the debit card they could sweep whatever you do have in the account, and that may actually be more painful to the end consumer (and therefore still quite a deterrent) than a $1000 charge on their credit card.

Posted by TGDC | Report as abusive
 

$1,000? Bikes are $100-$200 items. Particularly in the city, where mild steel, fat tires and general frumpiness trumps spare Italian chromaloy beauty every time. If anyone wants to get the “unbanked” on bikes, start by dealing in this reality.

Posted by Eericsonjr | Report as abusive
 

I don’t know much about the contemporary District, but were I live in the San Francisco Bay Area, transients and street people do brisk business in stealing bikes and then selling them any way they can in order to fund their ongoing addiction (usually marijuana, alcohol or crystal methamphetamine. So if this program didn’t have a way to require a substantial deposit, there’d be no way for it to be sustainable since the bikes would disappear in short order. Thus the stumbling blocks to “just” getting the unbanked on rental bikes.

And Eericsonjr, no one thinks that each bike in the program is actually worth $1k, that’s an amount that includes overhead and a ‘risk premium’ and to serve as a substantial motivator to the renter to return the bike.

Posted by Strych09 | Report as abusive
 

It should be mentioned:
A: these bikes are very, very distinctive and very heavy, and are most likely of little resale value on the street.
B: Going along with that, they’re built like tanks – Disc brakes, internal hubs, thick frames. It’s not like it’s a Huffy you’d buy at Wal-Mart, they’re custom-built to take a beating.

So far, theft of Bikeshare bikes has been pretty low, so I think this is a positive move on their part.

Posted by vhanudux | Report as abusive
 

Please tell me there’s an option to purchase insurance so I don’t get hit $1,000.

Or better yet, incorporate the insurance with the membership.

Posted by SomethingGre | Report as abusive
 

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