The racks on the DDOT buses seem pretty well-utilized to me, even though there are still a lot of buses without racks. I can imagine a lot of cases where it would make more sense to ride one bus and then bike the rest of the way than to transfer and wait for a second bus to go a relatively short distance.
Also, it's not an either-or. Installing bike racks doesn't make the service worse, and not installing them doesn't improve it.
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