JCDecaux touted Vélib on the cover of its 2007 annual report [PDF].

If you’ve read this BBC story currently making the rounds, you’d be forgiven for thinking that Vélib, Paris’s wildly popular bike-share system, has suddenly been afflicted by an epidemic of theft and vandalism that threatens its very existence. Vélib bikes have been "torched," strung up from lamp-posts, and smuggled across borders, the Beeb reports in alarmist tones. A spokesman for JCDecaux, the outdoor advertising firm that operates Vélib, calls its contract with the city of Paris "unsustainable," and the whole system is referred to in the past tense.

So is Vélib destined to burn brightly only to flare out after a short time? Hardly. Vélib is here to stay, according to officials and transportation experts familiar with the details of its operations. The BBC’s portrayal of a mortal threat, they say, is best understood as a negotiating ploy on the part of JCDecaux. (Note that the JCDecaux representative is the only source quoted in that story.)

"Decaux is using media sensationalism in order to obtain more money from the city of Paris," said Denis Baupin, who as Deputy Mayor for Transportation oversaw the Vélib launch in the summer of 2007.

The basic structure of the Vélib contract works like this. JCDecaux runs the whole system in exchange for the rights to 1,600 outdoor displays, turning its profit from selling that ad space. The city of Paris keeps the revenue from Vélib user fees, so it can claim to provide the service at no taxpayer expense. Now, with the full Paris network of 20,600 bicycles and 1,451 stations completed, penalties for inadequate maintenance are in the process of taking effect. Hence the hue and cry from JCDecaux.

"It’s in large part a PR issue," says Luc Nadal of the Institute for Transportation and Development
Policy. Some aspects of the Vélib contract are still in flux, and the sky-is-falling press coverage
gives JCDecaux a stronger hand in those negotiations. "Their bargaining position depends on the public’s perception."

Not that bicycle abuse is a phantom problem. It exacts a real toll, but much of that cost has been anticipated and accounted for. Last July, the city of Paris agreed to pay JCDecaux 400 euros for every bike stolen in excess of four percent of the total fleet each year. Given the enormous popularity of Vélib — users have taken 42 million rides since its debut — the cost of those payments is minimal. Using the BBC’s figure of 7,800 missing bikes, the pricetag for the city comes to less than 2 million euros annually, out of 20 million euros in user fees.

"It averages out to about 15 stolen per day, out of 80,000 daily users," says Eric Britton, founder of the Paris-based New Mobility Agenda. Hardly a fatal blow. "It’s like skinning a knee."

Not only does the city already pick up a big part of the tab, but JCDecaux reportedly hauls in about 80 million euros per year from its outdoor displays, according to estimates cited by Britton. It’s difficult to know the exact figure — and how much is profit — because JCDecaux guards the data like a nuclear secret. Even the precise cost of replacing one Vélib bicycle remains unknown to the public. Inquiries we sent to JCDecaux’s headquarters in Paris have not been returned.

Public support for Vélib remains unflagging. "Vélib has been totally embraced by Mayor Bertrand Delanoe himself," said Nadal. What politician wouldn’t jump at the chance to be identified with a program that enjoys 94 percent satisfaction among constituents?

This is largely a testament to JCDecaux’s success in operating the system. According to Baupin’s office, however, Vélib maintenance workers report that management has let upkeep slide in order to amplify the perception of vandalism.

JCDecaux’s media gamesmanship "is short-sighted," said Baupin, in a statement translated from the French. "One
should not lose sight of the remarkable success of this
transportation mode due to a slightly underestimated rate of
vandalism." 

Then there’s the matter of JCDecaux’s own self-interest, and whether the rumors and exaggerations will hurt the company’s attempts to secure bike-share contracts in other cities. Said Britton: "Why would they run away from a golden goose?"