Non-bike businesses help fuel a new cycling economy.
Swipe, smile, ride away. Swipe, smile, ride away. It’s a damp, chilly afternoon in Portland’s South Waterfront district, and the doctors, nurses and students who swarm Oregon Health & Science University each morning are vacating its two campuses at the end of the workday. They crowd buses, shuttles and the aerial tram. Brake lights glow as cars snake away. And as many as one in 10 workers climbs on a bicycle to make the journey home.
That’s where the swipes and smiles come in. It’s rush hour at Go By Bike, which claims the title of North America’s largest bicycle valet service. Funded through a subsidy from OHSU and bolstered by rental and repair-shop fees, Go By Bike appears to be a small-time operation in the grand scheme of things. The 2-year-old company employs just four people, and its revenues are in the low six figures. Yet as commuters swipe their ID badges, smile while the valet grabs their rides, then swiftly ride off, Go By Bike is at the center of a cultural shift unfolding in Portland — and it’s not just about how people get around.
Today’s bike businesses include plenty of neighborhood retailers and repair shops. Portland has also nurtured dozens of the traded-sector businesses economists love — companies like Alta Planning + Design or Universal Cycles — whose sales beyond city limits help spur outsize economic growth. But in the past few years, the bike economy has expanded to include another kind of business: private-sector organizations that once never thought about bicycles but are now changing how they operate in response to employee and client demand. In turn, those businesses are opening up entrepreneurial opportunities for niche operations such as Go by Bike, a startup that sells transportation assistance to a non bike employer, OHSU.
Nationally recognized as one of the country’s most bike-friendly cities, Portland earned that reputation largely because of its public-sector investments in bike infrastructure. Today, as public investment appears to be declining — Portland has shifted its focus from building bike byways to paving more roads, just as Chicago, San Francisco and other cities are spending more on bikeways — private-sector investment is surging. But the reason businesses today are jumping on the cycling bandwagon is, well, ironic. Today’s bike economy is not about the bike.
“If you had landed in Portland in 1991, you would have seen no bike lanes, you would have seen Waterfront Park and the Willamette Greenway, but not any of the other off-road trails. All of the Willamette River bridges were insufficient for bikes,” says Mia Birk, president of Alta Planning + Design, a Portland-based consulting firm.
Birk, who was the city’s bicycle coordinator though much of the ’90s, recalls a stark divide during that era. Lycra-clad fitness enthusiasts were fighting to get TriMet to add racks to its buses. They enthusiastically supported expanding urban bike infrastructure. But most Portlanders seemed uninterested. Only about 1.2% of the city’s workforce rode bikes to work. So Portland ramped up: The city installed more than 160 miles of bike lanes, TriMet added the racks that riders were seeking, and stores that had always catered to fitness cyclists began targeting two-wheeled commuters as well.
By 2005, 3.5% of commute trips were by bike, according to U.S. Census figures. Since 2008, bike-commuting levels have hovered at around 6%.
Roger Geller, the city’s current bicycle coordinator, breaks Portland residents into four distinct groups. A very small number of people, roughly 0.5%, will get around by bike no matter the obstacles. Geller calls them “the strong and fearless.” Another third of the population will probably never choose to get on a bike. He says 7% of Portlanders are enthused and confident — they likely deserve the credit for the boom in bicycling commute rates. And 60% are interested but concerned.
If urban planners and fearless riders laid the early groundwork for Portland’s bicycle culture, it’s the “enthused and confident” riders who are pushing for changes at non bike businesses around the city.
Dozens of law firms, tech companies, health care organizations, real estate brokerages and retailers are joining those enthusiasts — by offering tax breaks to bike-only commuters, installing bike parking, and choosing office space based on access to bicycle byways and on-site showers. They are doing this because it makes business sense: Bike parking is cheaper than auto parking, healthy employees keep insurance costs down, and strong support for bicyclists helps companies recruit and retain high-quality employees.
To be sure: Not all businesses have jumped on the bicycle bandwagon, and battles pitting bike advocates against interests favoring auto and freight investments are common. Nevertheless, driven by the bottom line and a cultural evolution in how people get around, non bike employers are increasingly shaping cycling’s next wave.
Consider Cambia Health Solutions, formerly the Regence Group. Jackie Yerby, the health care group’s sustainability program manager, says a grassroots group of commuters has consistently lobbied for more support from their employer. At their urging, Cambia has added locked bike parking and started offering discounted gym memberships for bicyclists who want to use on-site showers but not other workout equipment. In the past few years, employees have grown increasingly vocal about seeking support for their bike commutes, Yerby says.
Across downtown Portland, Elemental Technologies is using its bike-friendly policies as a recruiting tool — one that bicycle coordinator Emily Barrett says boosts the bottom line. When the software firm expanded into new headquarters in 2013, it opted for a building on two bike routes and told employees that bike parking would be free while car parking was not on offer. Workers can use on-site bike-repair kits, and Elemental subsidizes car-sharing memberships for workers who want a four-wheel safety net. By spending $19,222 to encourage bike and bus commutes, Barrett calculates that the company saved $209,437 in 2013 — mostly on parking costs.
Kevin Moore, a senior program manager recruited from Illinois three years ago, says he didn’t take his job because of Elemental’s support for bike commuters, but he’s more likely to stay as a result. Before taking the job in Portland, he weighed an offer in the San Francisco Bay Area — but was turned off by the traffic and long commutes.
“Elemental’s bike benefits are of great value to me,” Moore says. The city’s mild weather, bike-oriented street network and the existence of a repair shop midway between his home and the office also help. “And the fitness component can’t be overstated. When you bike every day, you’re basically forcing yourself to exercise 10 times a week.”
As enthusiasts decide where to live and work based in part on bike-ability, developers have taken note. A focus on bicycles and pedestrians, for example, underpins a massive effort to transform the Lloyd District from a commuter destination to a round-the-clock neighborhood.
Kyle Andersen, principal and designer at GBD Architects, says a four-block multi-building development now being erected along Northeast Multnomah Street will have parking for 1,200 bikes — at least 50% more than city code requires. Some spots will be set aside for residents of the project’s more than 600 apartments, with other parking designated for stores and office workers. Andersen says the $250 million project, dubbed Hassalo on Eighth, will have more bike parking than any other development in North America.
American Assets Trust, the San Diego real estate company developing the Lloyd District project, had bikes in mind long before it broke ground in 2013. The company was a leading advocate behind the 2012 transformation of Northeast Multnomah Street. Multnomah had long been a 1970s-style, four-lane, car-centric road, and striped bike lanes had done little to slow traffic or encourage bikes. At a cost of roughly $200,000, the city eliminated two lanes of vehicle traffic, widened bike lanes and installed barriers to separate bicycles from cars. According to the Lloyd Transportation Management Association, bike commuting climbed 25% along Multnomah in the year after the road’s overhaul.
The Lloyd Center shopping mall also wants in on the action. Long defined by its monolithic walls and street-facing parking lots, the mall’s owners are considering overhauling a parking garage on Multnomah to make the building more bike and pedestrian friendly. Mall officials did not respond to calls from Oregon Business, but in January they told bicycle blog Bike Portland that they are working to design a “human-friendly” entrance on Multnomah Street.
A similar focus on bike infrastructure can be seen across the city. Many existing retailers and restaurants want more bike corrals, and emerging bike corridors like North Williams Avenue are drawing a steady flow of development dollars. The city’s central eastside industrial district has blossomed since the Eastbank Esplanade expanded bike access a decade ago, with the 97,000-square-foot Eastside Exchange office building drawing headlines when it opened late last year. And Bike Portland reports that upscale Pearl District condo buyers and low-income residents of subsidized housing projects alike are demanding more bike parking.
“Projects I worked on 15 years ago, if bike parking was required, we included it just to meet code,” Andersen says. “Now we’re not just meeting code, we’re meeting demand. It’s a marketing choice, not altruistic.” Even as urban planners and city councils embrace bike culture in other U.S. cities, that consumer demand is unique to Portland and the Northwest, Andersen says. He laughs that his firm recently completed a Les Schwab Tire Center project — with on-site bike facilities for employees.
From 2006 through 2008, Portland’s bike-related industry grew by 38%, contributing $90 million annually, according to a study by Alta Planning + Design. Six years later, the industry contributes more than $100 million per year, with a new crop of businesses helping fuel growth.
Back at South Waterfront, Go By Bike owner Kiel Johnson points out that his business exists at a rare transportation hub: Automobiles, street cars and buses circle the block; pedestrians approach via the Gibbs Street Bridge; a tram whisks commuters up and down the hill; and more than 500 bicycles arrive every day. But Johnson’s close relationship with OHSU, and his plans to grow beyond South Waterfront, highlight another kind of hub that’s emerged in Portland over the past half decade. The city’s entrepreneurial culture is turning Portland into an innovation center for bike-related enterprises.
Go By Bike addresses a specific need. OHSU’s chronic shortage of auto parking requires a 25-person staff, which oversees assigned spaces, parking badges and other transportation issues. As the hospital and medical school system grow, OHSU is trying to encourage more people to take the bus, carpool or bike to work.
When Portland’s aerial tram connected OHSU’s waterfront campus with its top-of-the-hill offices, bike-commuting rates climbed, says John Landolfe, transportation options coordinator. Riders unwilling to trek uphill to the older campus were happy to ride to a lower elevation and then catch the tram up the hill to work. But soon the tram became overcrowded with bikes.
“We needed a way to convince people to park at the bottom of the tram,” Landolfe says. “I found myself asking, how is it that we have a hundred bike shops across Portland, and there’s no bike valet?” Today, 180 riders check their bikes at the base of the tram each day year-round — closer to 300 during peak summer months. Johnson supplements Go By Bike’s OHSU subsidy with bike rentals and repairs, business lines that now contribute about a third of the company’s revenue. Johnson is also developing a proposal for valet service during Trail Blazers’ basketball games. Andersen says he plans to ask Johnson to explore valet service at the Lloyd District development as well.
Go By Bike offers evidence that Portland’s bike economy is about more than just selling bicycles and parts. It’s about supporting a population that increasingly uses bikes as transportation. And as these businesses blossom, they are feeding a growing industry niche that sells to locals, tourists and clients beyond the region, says Kyle Kautz, co-owner of PDX Pedicab.
“We joke that there’s a capitalist bike co-op,” laughs Kautz. “A lot of us try to partner with as many small local businesses as possible.” Kautz took charge at PDX Pedicab in 2009, two years after the business began shuttling downtown drinkers from bar to bar. Local enthusiasm for bicycles brought in enough fares to pay the bills, but Kautz thought he could do better by marketing to tourists.
“Portland is such a beer area, we thought, ‘Let’s do beer by bike,’” he says. “You can’t ride while drunk, so we’ll do it for you.” PDX Pedicab has now developed 10 official tours and experiences, some centered on food and drink, others that take visitors to scenic destinations around town. “Bikes are a big thing in the city, and tourists love it.”
That focus on tourism dollars has transformed PDX Pedicab into a company that’s “exponentially more successful than we were several years ago,” says Kautz, who is preparing a trial expansion into Seaside this summer.
“The city’s goal is to get 25% of all trips made by bicycle in 2030,” says Johnson. “Right now it’s about 6% or 7%. If you’re thinking about starting a bike business, you have a market that’s going to grow three times or more.”
Enthusiasm among Portland’s bike entrepreneurs seems to be at an all-time high, but the city’s spot as a leader in bicycle innovation may be less secure than many believe. Bike-commute rates have flatlined at around 6% for the past five years, and advocates will have to convince more people to leave their cars in the garage if the city has a hope of meeting its ridership goals. Public money for bike infrastructure appears to be drying up.
Portland’s network of bike greenways has drawn international acclaim. These low-traffic secondary streets use speed bumps and stop signs to slow down cars, offer traffic signals to help bikes cross busy intersections, and install signs and road paint that make it clear that bikes are welcome. A local innovation, greenways have attracted copycats in London, Chicago, Los Angeles and Seattle.
But after investing heavily since 2009, city funding for these projects has nearly been eliminated. Three planned greenways are on indefinite hold. Improvements to existing routes have been postponed. The costs of building a new Sellwood Bridge and the Orange Line MAX train have drained Portland’s Bureau of Transportation budget, city officials say. And Mayor Charlie Hales appears less enamored of bicycle investments than his predecessor. Hales has made paving a priority for city streets this year.
Plenty of businesses support this shift in priorities. During a February meeting led by city bike coordinator Roger Geller, business owners on a Northeast 28th Street commercial strip were vocal in their opposition to city proposals to remove auto parking in favor of creating a more bike-friendly street. Meanwhile, over at the Portland Business Alliance, vice president Laura Shepard, an occasional bike commuter herself, voices only qualified support for cycling investments.
“For years we have invested in lots of bike-oriented projects,” she says. “You have to make sure your infrastructure investments are balanced. There needs to be support for freight movement, for people who drive to work.”
As Portland slows its investments in greenways and other bike infrastructure, the rest of the country is catching up — and not just on transportation spending. When Birk co-founded Alta Planning + Design in the late 1990s, she struggled to find architects and planners who understood the role bikes can play in an urban environment. Over time, Portland State emerged as the only major school with that educational focus. “For 10 years, practically our entire workforce came out of the Portland State urban- planning program,” Birk says. But that’s changed. “Portland State is not the only game anymore. Harvard, Berkeley, Princeton — these are top-notch programs.
“And obviously Portland is not the nation’s leader when it comes to bike share,” says Birk. Back in 2007, former Mayor Sam Adams vowed to make Portland the first U.S. city with a modern short-term bike-rental program. Since then, Birk’s Alta Bicycle Share business has developed programs in seven U.S. cities and Melbourne, Australia, but not in its hometown. Portland leaders selected Alta to develop bike sharing for their city, too — but only if they can raise $2.8 million in private-sector funding. Birk says she’s optimistic that the city could have a bike-share program running later this year.
Two decades ago, Birk was part of a dedicated group of city bike advocates who laid the groundwork for today’s Portland bike culture. Even as the city built bike lanes and designated greenways, economic development gurus were ignoring bicycles to market Portland as a silicon hub, an alternative energy hub, a software hub. And as other regions continued to outpace Portland in those industries, local companies across all sectors started incorporating bikes into their business plans.
Today Portland’s bicycling culture has reshaped roads, apartment plans and commercial construction across the city, and spurred the birth of a bike-focused business sector. In his February keynote speech for Oregon Business’s 100 Best Companies to Work For in Oregon awards dinner, Puppet Labs CEO Luke Kanies relayed a telling anecdote about the intersection between bikes and business. During their first staff meeting, new hires at this fast-growing Pearl District software firm are asked to reveal something interesting about themselves. But so many people want to talk about bikes (along with coffee and beer) that such interests are “no longer considered interesting,” Kanies said.
That mainstreaming of bike culture grew out of public-sector investments in cycling infrastructure. Today Portland’s entrepreneurial, amenity-driven private sector is by many metrics taking the reins, expanding the definition of bike businesses in the process. Increasingly, even seemingly unrelated enterprises consider support for cycling good business sense — and an efficient means of moving people around in an urban environment. In an era of declining public resources, Portland is about to learn just how far the city’s bike economy can go with businesses leading the way.