Creating a Win-Win Situation for Municipalities and Bike Sharing Schemes

Who hasn’t seen the images of massive shared bike graveyards in China fueling concerns about other cities’ streets getting clogged with rental bikes? Looking at these pictures and hearing news about bike sharing companies going bankrupt (OBike, BlueGoGo) or retreating from certain markets (GoBee.Bike, ofo), sometimes leaving thousands of bikes behind, these concerns seem to be valid.

So far the downside. But what about the benefits?

Many studies show a positive effect on:

Public health
Less congestion through reduced usage of individual motorized vehicles (IMVs)
Less pollution and a reduced carbon footprint, which supports the cities in their efforts to avoid climate change and Diesel bans
Commute time savings and convenience in multimodal or intermodal commute
Local sales in inner city locations via improved accessibility

Bike sharing bicycles piled up on the street. Photo: Wu Bingfeng

Agreed Bike Sharing Rules

Bike sharing with station-based rental bikes is well-known and common in the tourism industry since centuries. But since GPS-enabled smart phones and Bluetooth bike locks allow bikes to be found and rented anywhere at any time, bike sharing has changed dramatically and is about to disrupt mobility on the first and last mile. Dock-less bike sharing is one of the view disruptive innovations not coming from California but from China. And so we saw some “Wild East” scenarios since the first venture capital fueled companies like ofo, Mobike and BlueGoGo flooded the streets of Chinese cities, piling up in public spaces, blocking building entrances and public transit stops, and clogging sidewalks. Both bike sharing companies and the Chinese municipalities had a steep learning curve, which we can learn from and move from confrontation towards cooperation.

In many regions there is a lack of respective legislation for new services like dockless bike rentals, which might be compensated via mutual agreements between bike sharing companies and municipalities. But as long as there is no legislation nor an incentive for a bike sharer to adhere to restricting rules, agreements might not be put into place. Regulations will only work if there are incentives for adherence and consequences for non-adherence. Otherwise such agreements may become a “toothless tiger”.

Incentives for Bike Sharers

Whereas consequences for non-adherence can easily be found, incentives might be hard to find. Here are some candidates:

Allow bike sharers to (co-) brand their bikes with the city’s logo or coat of arms
Give access to detailed real-time traffic information and so allow bike sharing companies to allocate their bikes efficiently
Add bike sharing offers to public transport route planners
Integrate bikes sharing services into the public transport tariffs and payment options
Grant permission to establish or use bike rental stations at dedicated parking slots, marked visually and/or via Geo Fencing or BLE beacons
Grant access to charging points for electric bikes, pedelecs or electric scooters

Rules for Bike Sharing Companies

Many cities have set up guidelines for bike sharing operators – and sometimes even bike sharers issued a code of conduct, which is not always followed by their customers. Common guidelines contain:

Area of operation (min/max) and prohibited areas (e.g. parks, security areas)
Minimum and maximum number of bikes per bike sharing “station”
Minimum and maximum number of bikes in the city in total and fleet control limits for scaling
Parking guidelines and user education/enforcement
Bike relocation with defined Service Level Agreements (SLA)
Minimum standards for bike maintenance and safety, recommendation to wear a helmet, provision of accident informations
Bike type requirements (child bikes, child seats, cargo bikes, electric bikes, …)
Customer Care service level requirements
Data privacy and safety issues
Provision of parked bike positions/status and anonymized ride data to the municipality
Bike plate registration or branding guidelines
Pricing – usually if combined with public transport
Insurance requirements (for bikes, users and operations – incl. insurance for bike removal in case of a bankruptcy)

Duties of the Municipalities

If the agreements should work, they cannot be one-way streets. Bike sharing can only create a positive impact for the city’s population if certain preconditions are set, e.g. safe bike paths, planning certainty for the service providers, … So the municipalities also have to set the stage for a successful cooperation. Some duties may contain:

Establish a one-stop-agency for bike sharers and other new mobility service providers. Some cities (Berlin is not an exception) the municipalities block themselves from being able to act effectively by distributing competencies to multiple authorities and urban districts, often rivaling with each other. This weakness or lack of political will allows mobility service providers to take advantage – not always in favor of the city’s population.
Establishing the regulatory framework and a level playing field for all bike sharing providers – or at least allow all to participate in a public tender, which would on the one hand prevent competition but on the other hand prevent predatory pricing and unsustainable business models.
Close gaps in related legislation for an improved planning certainty
Provide real time traffic information to the bike sharing providers to allow effective distribution of bikes
Require insurances e.g. for accidents, deposits, removal of bikes, …
Build and maintain a safe bike infrastructure with bike lanes, sufficient and safe parking parking, dedicated bike sharing areas or docking stations, park and (bike) ride parking lots, etc.
Enforce compliance with local regulations, e.g. data privacy – but enable the use of aggregated data for urban planning
Effectively fight bike theft and vandalism
Monitoring and enforcing the agreed regulations
Provide resources to remove and store bikes in case of provider non-adherence
Define the pricing for the services offered to the bike share providers

Long planning cycles, slow decision making, avoidance of accountability or risk and unclear responsibilities leave many municipalities almost unable to steer or react to the fast-changing bike sharing landscape. Only strong and well-structured municipalities wil be able to test and iterate and set standards.

Outlook

Despite of the rapid development of bike-sharing-related business models and technology, most systems still show deficiencies and opportunities, especially in bike allocation and intermodal traffic integration. The bike sharing providers are in a race to win pool position in highest user acceptance and operational excellence at once. Here are some of the development opportunities which we can expect to be taken on soon:

Seamless integration into route planning services, complementing public transport and other means of transport. Regarding public transport integration, Asian and European mobility service providers might have a benefit compared to US rivals due to better developed public transport systems in their regions.
Integration into public transport monthly tariffs and commute cards, e.g. Deezer Nextbikes in Berlin can be rented using the BVG public transport card “Umweltkarte” by holding it next to a RFID card reader on the bike
Shared services and use of artificial intelligence/machine learning for reallocation/redistribution and bike maintenance. In Berlin the six remaining bike sharing providers all send their own teams to redistribute their bikes from the same areas – as service which could be provided much more efficient by a shared service company.
Position and defect sensors with auto-alert and deactivation in case of broken or toppled bikes improving service efficiency and supporting Total Productive Maintenance (TPM)
Shared use of docking stations – requiring a common dock standard
Shared use of charging points – both for bikes and electric scooters, requiring a common charging standard and incentives for users to connect bikes to chargers or charge the batteries at home
Centralized customer care and feedback/complaint handling tapping economies of scale
Location-based services (visual, acoustic or haptic navigation system, parking assistance/geo fencing, shopping or tour guide, LBS advertising, …)
Charging point for – and connectivity with the user’s smart phone
Crowd service incentives for users to re-allocate the bike to high-demand areas or retrieve them from areas not served
Extending service areas from city centers to the outskirts with moderate return policies
Using proprietary bike parts to reduce bike theft (Mobike’s approach)
Combining bike sharing with electric scooter and car sharing
…

Nextbike BVG Umweltkarte — An integrated card reader allows to open a shared Nextbike using the BVG’s public transport card

The current fierce competition will likely lead to a market consolidation with a few operators left in a monopoly or oligopoly position per city. Bike sharing will more and more become part of multimodal mobility services usually offered by car service providers, such as Didi Chuxing offering ofo bikes or Uber offering Jump bikes and Lime scooters for the last mile in addition to car services. Public transport providers would benefit most from a functioning system for the last mile but might consider an own system as too risky and not their core competency – and rather cooperate with one of the established players in the market.

On the other hand cities might team up for best practice sharing and defining supra-regional bike sharing standards and lobby for legislation in their favor. As soon as the current legislation gap for dockless bikeshare services in many regions is closed, cities might enforce to allow only one remaining “public” bike sharer via a public tender and no longer leave the number of bike share schemes in their area to the free market.

It looks like the very beginning of a long and exciting way to go.

Mobility as a Service (MaaS)

Bike Sharing and the City – Love or Hate?

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