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People for Bikes Sponsored Series

The Business Of Biking

Investing in Biking Yields a Big Bang for Portland's Public Buck

Bicycling's numerous and varied benefits – economic, social and environmental – have long been recognized, though given short shrift in the way of institutional value or support. That's changing. Public and private sector decision makers in cities and communities across the U.S. and around the world – spurred by persistent advocacy at the grassroots level and biking's near universal popularity – are factoring bicycling into integrated urban, suburban, and even rural transportation, development and sustainability plans. Here in the U.S., Portland has been a leading light in this regard. In 2003, city leaders and transit authorities launched a public campaign to encourage residents to bike, walk and make greater use of public transportation. They also began building out biking infrastructure – dedicated bike paths, lanes, signage, etc. – and began funding public educational initiatives and research studies to better measure and understand biking's overall scale, scope, costs and benefits, as well as how it fits into the overall transportation mix. The results have been so encouraging that Portland's City Council on September 18 voted unanimously in favor of investing $20.7 million in federal funding to make improvements to biking and pedestrian transportation. Longer term, the city's Bicycle Plan for 2030 calls for 25 percent of city travel to be on bicycles by that year. That, it has been calculated, would entail 20 percent of Portlanders riding their bicycles 15 minutes each day. In order to realize this goal, city leaders have proposed making another $100 million in biking investments through 2030. Considered among all the issues and challenges facing the city, can investing in biking at such scale genuinely be considered good use of scarce capital and other resources? Evidence indicates that's very much the case.

Bicycling investments in Portland: The costs and benefits

Studies show that Portland's investments in bicycling have yielded significant returns and benefits. In a 2010 case study entitled, Costs and Benefits of Bicycling Investments in Portland, Oregon, researcher and author Thomas Gotschi calculated that bike ridership in Portland grew five-fold, at a 9.6 percent compound annual growth rate (CAGR), from 1991 through 2008. Gains of 22 percent and 14 percent were made from 2006-2007 and from 2007-2008, respectively. As of last year, it has been estimated that biking accounted for 7 percent of travel in the city.

Portland has also benefited in terms of public perception, and that's enhanced the city's attractiveness as a place to live. In 2012, Portland was chosen by Bicycling Magazine as America's most bike-friendly city. There have been additional, follow-on benefits to this: Portland's attractiveness has been on the rise particularly when it comes to the younger, “creative class” of Americans who often inject social and economic dynamism to a city. Posed with the question of whether investing in biking confers an economic advantage on Portland in any way, Dan Keppler, who chaired the City Club of Portland research committee that recently completed a year-long study of the costs and benefits of biking investment in Portland, responded,

I think it does in a lot of ways, especially when we talk about attracting the creative class of young people to Portland. It turns out the creative class of young people really, really like this unique transportation system we have. They like the idea of being able to bicycle to work. “Younger people are driving a lot less than previous generations. Employers, when deciding where to locate in Portland, look at what employees are available here. We think this influx of creative, young, educated people...helps the economy.”
Also, bicyclists are good, or at least neutral, for small retail businesses, Keppler added. “Bicyclists are good spenders. Using bikes means they don't have to spend as much money on gas, car repairs, etc.”

Investing in biking: The bottom line

Balanced against all this are the varied costs. Zooming in on government spending, the city government estimated it had invested $7.2 million in its biking promotional campaign through 2012. Public spending to build out some 300 miles of biking infrastructure was pegged at $57 million as of 2008. So how do the overall costs of past and planned biking investment compare to the benefits? Reducing it down to monetary terms, it's not even close. Comparing biking investment costs to two types of monetized health and other benefits – health care cost savings and the value of statistical life savings – Gotschi calculated that by 2040, biking investments of $138-$605 million would result in health care cost savings of $388-$594 million, fuel savings of $143-$218 million, and statistical life value savings of $7-$12 billion. As stated in the report's abstract,
The benefit-cost ratios for health care and fuel savings are between 3.8 and 1.2 to 1, and an order of magnitude larger when value of statistical lives is used. Conclusions: This first-of-its-kind cost-benefit analysis of investments in bicycling in a U.S. city shows that such efforts are cost-effective, even when only a limited selection of benefits is considered.”

Outside of walking, biking is the least resource-intensive mode of transportation, and that needs to be considered when determining the overall costs and benefits of transportation investments, particularly in light of rising carbon emissions, climate change, resource availability and changing demographics. And, as previously noted, enhancements to the city's attractiveness and livability, which also provide an economic boost, also have to be considered – points that were raised in a recent public meeting held at the City Club of Portland in advance of the June 5 release of its own biking cost-and-benefit study, No Turning Back: A City Club Report on Bicycle Transportation in Portland.

Biking: From subculture to the transportation mainstream

There has been “an amazing amount of social change” in attitudes and recognition of biking's benefits, veteran political journalist and research committee member Jeff Mapes stated in opening the panel discussion. Added research committee chair Keppler,
Bicycling in Portland is no longer in the realm of subculture; it has become an integral part of how Portland residents get around, and that's a good thing, not only for people on bikes, but also for transportation generally, and for the livability of our neighborhoods.”
Speaking directly to the economic benefits of investing in bicycling, Rob Sadowsky, executive director of Portland's Bicycle Transportation Alliance (BTA), who also was on the research committee, had this to say, “Bicycling is putting over $100 million a year into the economy in Portland alone, let alone the region.” That includes a small, but active and growing community of bike designers, builders, repair shops and retailers, a socioeconomic “ecosystem” that OregonBusiness has dubbed, “Oregon's Bicycle Industrial Complex.” However, much more can be done despite growing institutional recognition and consideration of the value and benefits of fostering greater bike ridership, panel members said. “Bicycling needs to be fully integrated into the city's transportation system in ways that optimize choice, emphasize connectivity, enhance efficiency and especially promote safety,” Keppler continued.
The creation of safe and low stress bicycling infrastructure needs to move from an opportunistic approach to a strategic approach. Transportation planning and funding must take into consideration all modes – bikes, cars, pedestrians and transit. Planning for one mode at a time doesn't work.”

Biking: Fostering inclusivity, sustainability and livability

Essential to this is gathering more and better data on bicycling across all neighborhoods, stakeholders and demographic groups, as well as its relationship to and effects on other modes of transport, panelists emphasized. In particular, more needs to be done to reach out and engage groups of residents who typically have not been bike riders, such as minorities and the elderly, small business owner and long-time Portland resident Sharon Maxwell pointed out. “We need to address inclusivity,” Sadowsky agreed. “Attracting the young, creative class is not benefiting African-Americans in this city, in particular African-American men, with an unemployment rate of 17 percent.
Unless we start addressing how we either integrate and find opportunities for people of color and communities of color to capture the opportunities of the creative class, or find alternative economic opportunities to create a new class of employees, we will continue to have this dichotomy.”
Furthermore, Sadowsky continued, you can't view biking solely as a local, city issue. “It's a regional transportation issue. In some ways, it's less about bicycling than about how our communities look and feel...and I think that's where a lot of the cultural challenges, and both stresses and opportunities, lie.” At the end of the day, the more we learn about and understand biking and how it fits into a city or town's transportation mix, the more it becomes clear that investing in bicycling is one of the most effective, least expensive and lowest impact ways of helping assure environmental and economic sustainability and a high quality of life for present and future generations.
Bicycling offers an inexpensive, healthy and pollution-free transportation choice, that, when properly implemented, will serve Portland well for generations,” Sadowsky stated at one point in the City Club discussion.
“If we continue at the current rate [of growth in motor vehicle traffic] without taking any more bold steps for bicycling, we will see by 2035 1 million more cars on the road every day, equivalent to 23 Powell Boulevard's of cars on the road every day. I don't think that we can sustain that,” he added.
Andrew Burger headshotAndrew Burger

An experienced, independent journalist, editor and researcher, Andrew has crisscrossed the globe while reporting on sustainability, corporate social responsibility, social and environmental entrepreneurship, renewable energy, energy efficiency and clean technology. He studied geology at CU, Boulder, has an MBA in finance from Pace University, and completed a certificate program in international governance for biodiversity at UN University in Japan.

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