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 Bike Sharing Programs Analysis: People, Planet, Profit DES 127

Bike share Group

Patti Cai, Xuege Ma, Chloe Parini, Li Tang, Xin Ye 3-13-2018

Overview and Background

Bike share is a service which is provided by companies and made for individuals to use on a very short-term basis for a set price. Bike share programs allow people to rent and use bikes within a certain time frame and return them at a different station. Public bicycle becomes one of the most important parts of public transportation because “it solves the ‘last mile' problem for the city”

 (Kaiser). For many systems, users can pay the rate on the smartphone, and the bike share app will show nearby stations with available bikes and open docks.

The bike-sharing programs began on July 28, 1965, in Amsterdam with the White Bikes (Demaio). Dozens of bikes were painted white and provided for public use. They were left unlocked for anyone to use and leave behind for the next person. However, things did not go as planned. Bikes were frequently stolen or damaged, and subsequently, the program was quickly shut down. In 1995, Copenhagen's City Bikes, allowed users to access sturdy, shared bicycles at specific locations throughout the city via a coin-operated system (Goodyear). However, the bikes still experienced theft due to the anonymity of the user. One year later, in 1996, Bike about, a small bike-share system limited to students at Portsmouth University in the U.K., is the first to come up with a solution to the theft problem. The user had to swipe an individualized magnetic-stripe card to borrow a bike, which allowed the bike to be tracked when it was not returned. In 1997, a very different form of bike share program appeared in the Austin, the Yellow Bike Project, is a volunteer-powered initiative to put bicycles on the streets of Austin and Central Texas by operating community bike shops, teaching bike mechanics and maintenance, and acting as a local bike advocacy group (Austin's Yellow Bike Project). After people learned the repair skill and volunteered at least 12 hours within a three-month period, they could earn bikes to ride. This program was very successful because it used a different way to share bikes with others. One exciting thing is that this program is running until now.

Nowadays, with the advanced improvement of technology, bike-sharing systems were smartened with a variety of technological improvements, such as electronically-locking racks and mobile phone access. The popularity of bike share program is increasing due to its flexible mobility.

 Bike share program connects users to public transit networks, reduces congestion and fuel use, creates a larger cycling population, increases transit use and improves bike lanes and safety. It also becomes a new environmentally-friendly economy which decreases greenhouse gases and improves public health.

Bike share and People (Needs, Strategies, Impact)

As the society develops, people have growing demand for transportation, especially in bigger cities like New York. Due to the ever growing scarcity of resources, “a new culture of sharing is emerging” (Sustainist). Bike sharing programs, as a part of shared economics, are becoming a new popular commute format, one which was established to solve urban issues like crowded public transportation and air pollution.

As a socially responsible design for people's convenience, bike sharing programs are usually easy and cheap to access. The number of bike riders has increased dramatically over the past few years, which means bike sharing programs are gaining popularity and becoming more accessible. In big cities with bike sharing programs, bike docks are located in busy areas for ease of access. For example, in DC there are 6.4 docking stations per square mile, which is the highest among the US cities (Spin). Despite the success of docking bike share programs, we see some bike sharing programs without the dock start to emerge, like OFO bike in China. When using these services. riders can park the bike anywhere when they arrive the destinations. This means users do not need to spend more time on finding the dock, and can more quickly reach their destinations. This is even more convenient for the riders and may increase the ridership in some way.

 Riders can use coins, a credit card, or scan a QR code to easily unlock and use a bike. On bike sharing websites, riders can also buy a day pass, or an annual membership. Usually the day pass is about two or three dollars for up to a 30-minute ride. However, Citibike in New York is more expensive: these bikes cost riders around twelve dollars per ride. In order to make bike sharing accessible to more people, especially to people from low income areas, some bike sharing programs have launched income based discounts for riders (Nacto).

A safe place to ride, which is the bike line, is important to the development of bike sharing programs. If a city has a safer bike lanes and facilities for bike riders, the number of bike riders will increase. If there are safe channels for bike riders, more people might shift from their original commuting methods to riding, which can reduce traffic congestion and air pollution. According to Walker's study, 60% people say that they are interested in bike sharing program, but are concerned about safety. And 80% of these people would like to join the bike sharing program if there were separate, safe bike lanes (Walker).

Furthermore, more people on bikes translates to less traffic congestion and more physical activity (Lindsey). These days, people receive more pressure from work, family and society, which may cause people to ignore necessary exercise and work extra hours. By riding a bike to work, one can easily fit a workout into their schedule. This helps people who live in the city be healthier. Bike sharing programs help to solve transportation problems for people. It can reduce people's commute time to some degree. In Walker's study “How bike share is changing American cities”, Citi Bike (in New York) fills in the gaps for commuters that are “too long to walk, but seem too short for a subway trip.” This not only helps commuters, but cause the subway and other public transportations seem not as crowded as before. However, if the trip is too long, or the weather is

 bad, people who usually drive to work may be less likely to ride a bike. Despite this, bike sharing programs can still reduce the greenhouse gas emission. Both bike share users and non-bike share users can gain the benefits from less air pollution.

In conclusion, bike sharing programs greatly benefit people and society, by solving transportation problems and reducing the pollution. Once bike sharing systems in a city become safer and more complete, the bike sharing program can attract more users.

Planet (Needs, Strategies, Impact)

In this section I will be discussing two bike share companies that both have footholds in Northern California, JUMP and LimeBike.

Bike shares and electric bike shares are a good way to cut down on the amount of pollution released into the environment by cars. If more people took a bike to where they needed to go, fewer people would have to use a car. In a study done by the Institute for Transportation and Development Policy, and UC Davis Institute of Transportation Services, it was shown that by increasing the amount of bike ride commutes from 7% of the population to 22% worldwide, we could reduce emissions by about 47% (study). This might seem like a large increase in number of riders, but with the possibility of an electric bike that can, on average, reach speeds of around 28mph, and go around 60 miles before needing to be recharged, this possibility becomes much more realistic (Forbes). The study also found that this change would save people quite a lot of money. They calculated that this would save commuters as a global population around $128 trillion compared to the status quo (Mason, et al., 9).

The bikes are very reusable, this is the premise of the thing: to have a bike that can be used over and over again by different people. How reusable the bikes are depends largely on the bike share

 company to which it belongs. I reached out to both LimeBike and JUMP, but both companies refused to answer any questions about where their bikes are manufactured, what their bikes are made out of, or how long their electric batteries last and what happens to them when they are thrown away. Most electric bikes have lead-acid batteries ( RecycleNation ), which can be “recycled” by shipping the battery to a recycling plant, which then in turn ship them to other countries to process the dangerous chemicals housed within.

LimeBike is a new bike sharing company, launched in 2017, that got its start out of the San Mateo Valley in California. This company rents out two different models, analog and electric bikes, with the electric bikes only having come to market this year. Their electric bikes have a max speed of 14.5mph because most cities cap bike speeds at 15mph (LimeBike). JUMP is a more established bike sharing company. They have exclusively electric bikes, and cost more than LimeBike. They are partnered with UBER. One important thing to note about each of these companies is that they are “dockless.” This means that they don't need to be returned to any specific location, but rather can left wherever the rider wants.

A new issue that has been seen in cities that have adopted bike sharing systems, particularly bike sharing systems that are “dockless.” Because there are no real terminals or locations for the bikes being returned to, riders are not only leaving bikes, but dumping them. This issue, called “bike litter” has been seen in almost every city that has a bike sharing program. A good example of this is the city of Dallas, which has had LimeBike for about a year now. They have had hardships with the bikes, finding that they have been dumped in random locations. The city has made ultimatums and threats to LimeBike, trying to get the company to “clean up [their] mess.” (Wilonsky). In most cases these bikes do have GPS tracking which allows companies to easily

 locate and redistribute bikes. This does mean, however, that the bikes sometimes have to be picked up in vans. If this happens enough, it could negate the positive carbon footprint that the bike sharing program leaves.

If we had to ascribe a sin of greenwashing to bike sharing, it would be the sin of hidden trade off ( The Sins of Greenwashing ). Yes, bike sharing systems do help reduce carbon emissions, and potentially encourage people to own their own bike. Is the amount of carbon emissions used to make the bikes and redistribute them by car when they get lost, offset by the amount of carbon emissions the bikes can potentially save? I hesitate to call this greenwashing, but it is something that I feel warrants further research.

Profit (Needs, Strategies, Impact)

The increasing population of app-based bike sharing not only highlights the role of technology and marketing in allocating urban resources and reducing carbon footprints, but creates an environment-friendly way of commuting by profiting companies and bikers at the same time. There are many ways for companies to lower the cost for riders while still profiting from the business. The three most significant sources of profit come from launching new programs and bike models, funding from investors, and the ride-and-pay operating model.

Differing from their predecessors which depended on fixed docks in which bicycles must be parked, new “dockless” bike models, pioneered by Ofo and Mobike, feature secure smart locks on bikes. These locks can be simply released using app on smartphone. Because of the simplicity of this locking system, companies save a lot on building physical support infrastructures such as docks, into every corner of the cities. This saving is a reason that prices for a ride dropped from historically $2.66 just to unlock a bike, to $0.10 for a whole 30 minutes, offered by Ofo (Han).

 Another reason companies can afford such low fees low fees per bike ride is their abundance of funding. The whole bike sharing system and its unique business models have proved attractive to all kinds of investors. In June 2017, Mobike raised $600m. Much of it from Tencent, a messaging, gaming, and payments giant. In July, Ofo raised $700m in a funding led by Alibaba, an e-commerce and payments company (The Economist). In October, another bike sharing company of Australia, LimeBike had raised $50 million, plus another $12million in March for keeping the bikes already out in the market in good condition and for further market expansion (Coldewey).

The ride-and-pay model is considered the only profit generating business method that can be used in this scheme. For example, users of oBike are required to pay a $69 refundable security deposit in order to use the share bike before registration. The amount of money held in the deposit pool is potentially enormous collectively. Also, the $6 billion deposit in Mobike account is from 299 yuan of every Mobike registered user (Han).

Advertising is another means for these companies to generate profit. Companies advertise by using both the physical body of the bikes to advertise and promote their brand, as well as the app used to locate and unlock the bikes. Even though bike sharing is experiencing market saturation, and the competition is intense, investors and companies are still confident about their future prospect.

Conclusion

The bike share program provides a unique way the through which people rent bicycles from established companies and uses them for a certain time. The concept of bike sharing traces its origin to the 1960s. Since then, the business model that governs the trade has changed to assist in

 curbing various problems that the bike renting firms faced. For example, the bike sharing concept incorporates the use of complicated technology to track its bicycle in the bid to overcome the problem of bicycle theft that was experience in the past. Moreover, the use of technology also assists in tracking the people who borrow the bicycle from the moment they rent the bike from one station and return it to another. Doing so builds accountability among the clients.

Bike sharing allows people to enjoy the convenience of moving through city spaces without experiencing traffic jam. Additionally, renting a bicycle provides convenience to the people who are visiting a given town and do not want to own any property (DeMaio 3). Therefore, renting becomes a suitable way through which to acquire property that one can use for a specific time. More so, the bike sharing program provides one with multiple options to pay for the services it offers a factor that increases its efficiency.

The reusability of bikes makes them an important aspect towards the conservation of the environment. Apparently, a bicycle can be used by different people without the need to buy a new one. Moreover, bicycles and electric bikes do not emit any gases that harm the environment, a factor that makes the bike share program environmentally sustainable. Adopting the bike sharing programs in different cities is results in benefits for the environment.

Works Cited

“Austin's Yellow Bike Project.” The Austin Yellow Bike Project About YBP Comments, austinyellowbike.org/About/.

“China's bicycle-Sharing giants are still trying to make money.” The Economist, The Economist Newspaper, 25 Nov. 2017,

 www.economist.com/news/business/21731675-one-answer-would-be-ofo-and-mobike-merge-chi nas-bicycle-sharing-giants-are-still-trying .

Coldewey, Devin. “LimeBike raises $50M to further its bike-Sharing ambitions.” TechCrunch, TechCrunch, 16 Oct. 2017, www.techcrunch.com/2017/10/16/limebike-raises-50m-to-further-its-bike-sharing-ambitions/ . “Dallas to bike-Share companies: Clean up your mess, or we will.”  Dallas News , 18 Jan. 2018, www.dallasnews.com/news/dallas-city-council/2018/01/18/dallasto-bike-share-companies-clean- mess-will.

Demaio, Paul. “Bike-Sharing: History, Impacts, Models of Provision, and Future.” Journal of Public Transportation, vol. 12, no. 4, 2009, pp. 41–56.

Goodyear, Sarah. “The REAL Story Behind the Global Bike-Share Boom.” CityLab, https://www.citylab.com/city-makers-connections/bike-share/ .

Ink, Social. “Bike Share in the US: 2010-2016.” National Association of City Transportation Officials, nacto.org/bike-share-statistics-2016/.

“JUMP Bikes - Bike Share. Electrified.”  JUMP Bikes - Bike Share. Electrified , jumpbikes.com/#pricing.

Kaiser, Kim. “Closing the Gap - Bike Shares Help Complete the 'Last Mile'.” Mass Transit, 18 July 2012, www.masstransitmag.com/article/10724679/closing-the-gap-bike-shares-help-complete-the-last- mile .

LimeBike. “LimeBike.”  LimeBike , www.limebike.com/.

Lindsey, Joe. “Do Bike Share Systems Actually Work?”  Outside Online , 11 Apr. 2017, www.outsideonline.com/2136406/do-bike-share-systems-actually-work.

Mason, Fulton, McDonald. A Global High Shift Cycling Scenario: The Potential for Dramatically Increasing Bicycle and E-bike Use in Cities Around the World, with Estimated Energy, CO2, and Cost Impacts. 2015. Print.

Nacto. “Bike Share in the US: 2010-2016”.  https://nacto.org/bike-share-statistics-2016/ Nickelsburg, Monica. “LimeBike rolling out electric bicycles in Seattle, San Francisco and several other cities.”  GeekWire , 8 Jan. 2018, www.geekwire.com/2018/limebike-rolling-electric-bicycles-seattle-san-francisco-several-cities/. RecycleNation. “How to Recycle Lead-Acid Batteries.”  RecycleNation , 14 July 2014, recyclenation.com/2014/07/recycle-lead-acid-batteries/.

Schewarz, Michiel and Krabbendam, Diana. Sustainist Design Guide (BIS Publisher 2013). P33. Spin. “The $5000-a-Bike City Bikeshare That's Hardly Used – The Spin Blog.”  The Spin Blog , The Spin Blog, 22 Feb. 2017, blog.spin.pm/the-5000-a-bike-city-bikeshare-thats-hardly-used-b004a2c31b45.

Sun Sheng Han.“Bike share schemes have arrived - but how do they make money?” ABC News, 18 Sept. 2017,

   

 www.abc.net.au/news/2017-09-19/bike-share-schemes-economics-makes-sense-the-conversation /8957404 .

Taylor, Tracey. “Dockless, shareable bikes – some of them bright green – arrive in the East Bay.”  Berkeleyside , 27 Feb. 2018, www.berkeleyside.com/2018/02/26/dockless-shareable-bikes-bright-green-arrive-east-bay/ . Technology, Energy Innovation: Policy and. “As Transportation Costs, Emissions Grow, Electric Bikes Offer An Efficient Alternative.”  Forbes , Forbes Magazine, 6 July 2017, www.forbes.com/sites/energyinnovation/2017/07/06/as-transportation-costs-emissions-grow-elec tric-bikes-offer-an-efficient-alternative/#44a177c8305a .

“The Sins of Greenwashing: Home and Family Edition.”  The Seven Sins | The Sins of Greenwashing: Home and Family Edition , sinsofgreenwashing.com/findings/the-seven-sins/index.html.

Walker, Alissa. “How bike share is changing American cities.”  Curbed , Curbed, 21 Mar. 2017, www.curbed.com/2017/3/21/15006248/bike-share-ridership-transit-safety.

    

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