Tel Aviv Readying to Drop Bike Rentals, Expand Car Rentals

Mayor has hinted Tel-O-Fun’s contract won’t be renewed while city council is set to vote to expand the AutoTel fleet

A Tel-O-Fun bicycle stand on Ben Yehuda street, Tel Aviv.
David Bachar

Tel Aviv is gearing up to end its program of subsidized, short-term bicycle rentals at the same time it is readying to deepen its already major financial commitment to short-term car rentals, despite concerns that cars are doing little to alleviate the city’s massive traffic problems.

Tel-O-Fun, the service that has been operating the city’s signature fleet of green-and-white bikes, is planning a presentation to Mayor Ron Huldai this week to tout its next-generation of electric bicycles equipped with smart batteries.

The company will be seeking between 4 million and 5 million shekels ($1.1 million-$1.4 million) from the city to launch the new service. But Huldai has already hinted that Tel-O-Fun’s contract won’t be renewed.

Ironically the reason is that Tel-O-Fun has turned Tel Aviv into a two-wheeled town. As a city spokesman explained, a host of private businesses are now providing the same service without the space-hogging bicycle stands. Many Tel Aviv residents are using electric scooters instead of bicycles to make their way around the city. Use of Tel-O-Fun bikes has fallen sharply.

Tel-O-Fun’s contract with the city expires within the next year and a half and city engineers have already been asked to come up with creative uses for the bicycle stands.

But at the same time Tel Aviv is giving up on public bicycles it’s eyeing plans to expand the use of short-term cars offered via its AutoTel program. Operated by a private company called Car2Go, AutoTel currently has a fleet of 260 cars with a similar green-and-white livery as the bikes.

AutoTel is costing far more money – 100 million shekels over the first 10 years, not including the money the municipality has invested in marketing the program and the value of the 780 parking places around the city reserved for the cars.

Critics of the short-term car rental program say the costs are excessive and that Israel’s two other major cities are spending much less.

In the greater Haifa area the program, which is also operated by Car2Go, involves 100 cars and 300 parking places. But the subsidies from the city, other local authorities and government agencies amount to just 10 million shekels for the life of the contract. Their only other contribution is the free parking places.

Jerusalem’s program is even more modest: A fleet of just 39 cars and an equal number of parking places. The city’s only financial contribution is subsidized parking. The business model is also different: The tariffs are designed to help people making longer trips, often outside the city.

Jerusalem has also developed a parallel service, designed for the city’s ultra-Orthodox residents, that consists of a fleet of cars that can’t be used on Shabbat or holidays.

In any case, even after the subsidies, the service is so expensive that only Tel Aviv’s wealthiest use it, meaning that it subsidizes those residents least in need of financial aid.

Critics also doubt whether AutoTel is doing much to deter the use of private cars. The service is used primarily during peak commuting hours when public transportation is the most available. It’s used the least on Shabbat and holidays when there is no public transportation at all.

Meanwhile, most of the fleet stands idle 22-23 hours a day and has a generous allocation of 2-3 parking places per car. Thus, even when a car is being used, it’s taking up coveted parking spots.

Even so, two of AutoTel’s biggest critics on Tel Aviv’s City Council – Deputy Mayors Assaf Harel and Zippi Brand – said they will vote next week in favor of expanding the contract after Car2Go agreed to ease the terms. Cars in the fleet will in the future y be replaced only once every four years rather than once every three and the company will reduce the monthly subsidy the city pays by 120,000 shekels.

However, the expansion of the program will add to Tel Aviv’s costs. It will help pay for the purchase of each additional car plus 2,000 shekels a month while it is in service. It also pays per kilometer of driving. Tel Aviv will only get back revenues once the program’s income exceeds its costs.

Haim Goren, a city councilman who helped draft the changes in the agreement, explains that the expansion of the current fleet of 260 would be modest: “There may be an addition of a few more vehicles, maybe a few dozen, but for now no more than a total of 300,” he said.

“I don’t believe the project is forever, but it is what we need right now, because it makes it easier for the middle class to live in the city. It gives people a car only when they want or need it,” said Goren.