PARIS — You place your magnetic card on the reader, wait for the clicking sound, then take a bicycle that you'll later drop at one of many other docking stations in the city. The process is simple and convenient, and has become popular in cities throughout France, and beyond.

It's been 10 years since Lyon Mayor Gérard Collomb inaugurated Vélo’v, the first bicycle-sharing system of its kind in France with a network of 4,000 bikes spread over 300 stations in Lyon and neighboring Villeurbanne, developed by street furniture company JCDecaux.

Paris followed suit in July 2007 with an even larger service consisting of some 16,000 Vélib" bicycles in about 1,000 stations.

But this idea wasn't actually new. In the 1970s, La Rochelle Mayor Michel Crépeau introduced what were called "yellow bikes" for residents to use. Similar services were launched in Copenhagen, Vienna and Rennes in the 1990s, but not on the large scale that Lyon and Paris undertook.

The success of JCDecaux's system lies in its ease of use but also in its financing. Through its Cyclocity subsidiary, the distributor manages the stations and advertises the service. In exchange, it can display billboards across the city. The user's financial outlay is kept to a minimum, costing each regular client between 20 and 40 euros a year.

The success of self-service bikes has attracted the interest of other operators, in France and abroad, such as the mass media group iHeartMedia. But the system's financial viability has yet to be demonstrated: Although the service is almost free for the user, the costs for local authorities are significant.

After the 2014 municipal elections, several newly elected mayoral teams in France were staggered when they discovered the cost. In November, the newly elected mayors in Valence and Pau even considered dropping the service.

High bills

The figures are truly overwhelming. In Valence, the annual cost of Libélo, developed by a French company called Smoove, was a whopping 400,000 euros for fewer than 300 subscribers. In Pau, the IDECycles created by transport company Keolis, cost the city 703,000 for 400 subscribers. In both places, each bike costs local authorities more than 2,000 euros per year.

Of course, no city has ever claimed profitability of public transport, whatever the mode. But the figures for the bike-sharing systems are particularly high given their scale. Benoît Beroud, founder of consultancy group Mobiped, has studied a number of contracts between municipalities and their distributors. "The cost per bicycle and per year is 2,250 euros in Orléans, 2,413 euros in Rennes and 3,267 euros in Marseille," he says.

The problem is similar in the United States, where Bike Share Philadelphia founder Russell Meddin estimates the annual cost of a single bike at between $1,500 and $3,000.

In Lyon, each Vélo'v costs an estimated 2,000 euros — twice as much as the anticipated 1,000 euros. But in this case, it's the distributor, and not the mayor's office, that must pay the difference. "We're lucky to have been the first ones to sign a deal with them," says town counselor Gilles Veco.

JCDecaux learned its lesson and was more careful in its subsequent contracts. "The number of thefts and the level of vandalism surprised us," says Albert Assérad, the company's executive vice president for strategy.

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Broken Vélib" — Photo: Luc Legay

In Paris, expenses have skyrocketed. According to economist Frédéric Héran, each Vélib’ costs taxpayers 4,000 euros a year. The service's requirement that bicycles be transported from stations that are full to those that are empty "accounts for about half of that sum, while one-third is spent on repairing vandalized bikes." The rest, he says, is for the actual operating. "It's not the advertising that finances the bicycles, but the city, which all but waives the usage fee."

All uphill for cities

Elsewhere, the bill is also steep. In Montreal, for example, the Bixi system, launched in 2009, quickly turned out to be a financial drain. The city handed its management over to a non-profit structure that must repay 3 million Canadian dollars every year.

In London, Barclays, the main sponsor of the bike-sharing system there, announced it was withdrawing from the project in 2013 after a deadly accident damaged the reputation of the "Barclays Bikes," which Londoners call "Boris Bikes," after the Conservative Mayor Boris Johnson. In April, the system was renamed "Santander Cycles," after another bank, which agreed to pay 6.25 million pounds ($9.78 million) per year until 2022.

Some cities have thrown in the towel. Russell Meddin says that 60 such services have been canceled around the world, including in Aix-en-Provence and Plaine Commune in France. The northern French city of Lille is considering moving little-used stations to other, smaller towns in the region where there's more demand.

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"Boris Bikes" — Photo: Garry Knight

But after a period of doubt and consultation, the mayor of Valence decided to keep the system alive. "We managed to bring down the service's annual cost to 300,000 euros," a local administration source says. To reduce their deficits, Paris, Lyon and Barcelona have decided to raise prices. But user contribution remains ridiculously low in terms of overall financing, amounting to between 5% and 10% of the cost. By contrast, user fees for buses and the Metro represent 20% and 30% of overall costs.

But associations that represent bicycle users aren't begrudging higher fees. "Also because they're expensive, bicycle-sharing systems give credibility to this means of transport among decision-makers," says Olivier Schneider, president of the Bicycle Users Federation. Economist Frédéric Héran puts it differently. "With such sums involved, what else could we do to encourage people to use bikes?" he asks.

Reducing costs

Perhaps we should look to both Strasbourg and Grenoble for answers. The two cities have opted to develop long-term rental services, from one day to a year. Users are wholly responsible for the bikes, including financially, which limits the risks of damages. What's more, the bicycle must eventually be returned to the station where it was borrowed, which removes the costly administrative burden of moving cycles to and from stations.

"It's wasn't our goal to gift each inhabitant of Strasbourg a bicycle, but we want to encourage them to use it to move about the city," says Jean-Baptiste Gernet, a city counselor. According to his own calculations, "each Vélhop costs the city 400 euros a year." That's 10 times less than what the Vélib’ system costs the city of Paris.