How Bike-Sharing Companies Are Staying Innovative

Innovation is moving fast in the bike-sharing segment. The first large citywide schemes in Paris, London, and New York used docking stations. But dock-based rentals have two key disadvantages over free-floating fleets: they are less convenient and much more expensive. In the Washington D.C. program, it costs $3,700 for each bike and its dock. By comparison, dockless e-bikes cost a few hundred dollars, with prices declining rapidly.

Furthermore, docked bikes are far more susceptible to technical malfunctions. Last year, bike-share riders plummeted from 290,000 to 220,000 in Paris after an “upgrade” to the fleets of bikes and docking stations went poorly. The new operator, a French-Spanish consortium called Smovengo, fell months behind schedule in installing the 1,400 new stations – many of which were beset with electrical and software problems.

The shift to dockless bike-sharing also allows the possibility of much larger fleets. While about 100,000 docked bikes were in use in U.S. cities by the end of 2017 1, the two largest companies in China operate 20 million dockless bikes combined.

Innovation is also enabling the industry to overcome some of its challenges. GPS tracking devices on bikes are helping to reduce theft and recover abandoned bikes, while geolocation through customers’ mobile phone signals is being used to offer small incentives to bring back bikes left in remote locations. All these issues will become moot when work that is already under way to make self-driving e-bikes (think Segway on steroids) comes to fruition.

Perhaps the greatest new opportunities, however, lie in the data associated with e-bikes. In the future, these bikes could become mobile sensors, collecting data on everything from pollution levels, traffic patterns, and street conditions. Cities might feed the data into municipal mobility platforms to plan new transport initiatives, divert traffic flow to relieve congestion, or allow citizens to switch optimally between different modes of transport. Retailers may use location data from bikes to send e-promotions to riders in the vicinity of their stores.

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