Cycling Up a Mountain on Donkey-back
Bicycles will win because in the trafficless future of liveable, sustainable cities only a few will afford or want to drive a car every day. Infrastructure will favor the majority, cyclists, and self-driving cars will make streets safer for biking. Bicycles will win, and bike-shares will play a key role as they allow for better modal integration, especially for the rail and bike combination.
The venture capital world has finally woken up to the potential of bike-sharing. So far Ofo and Mobike have each raised upwards of $500 million. The remaining 30+ bike-share startups, including the one I’m co-founder of, Donkey Republic, have also collectively raised perhaps another half a billion.
The results? In China, 50 million people are regular users on its 10 million shared bikes. The bike-share business, which was not seen as a venture capital case until 2016, grew tenfold in less than a year. The adoption of large-scale bike-share systems is likely to spread to Europe, the US, Latin America, India and other regions of the world.
The economics of bike-sharing
Bike-share riders in Europe commonly pay between €0.50 to €1 per trip, up to €3-4 to get to work and back, and an average of €10-12 for a whole day on the bike. These fees will drop in a future where they are integrated into monthly commute cards.
Ofo and Mobike are charging only 1 Chinese Yuan (~€0.14) per ride in China, and claim 6 trips are made per bike per day, bringing the revenue from rentals to around €0.50 per bike per day. If a bicycle costs around €250, lasts for 2 years, and needs low maintenance, rider revenues are not far from covering the costs. When these companies launch in Europe and the US the pricing will of course adjust to an expected rental fee of €0.50 per trip for up to 30 minutes. Compare that with paying 30 times the price to share a car, and you suddenly get why bike-shares are booming*.
The data accumulated by bike-sharing systems represents another revenue stream. Traditionally, they have used their bikes as moving billboards. Now, leveraging the data available on rider behaviour, bike-shares will start using their technology platforms to serve advertising, adding to their profitability and attractiveness for investors.
The role of policy makers
Disruptive bike-share companies may create some negative externalities that call for regulation. To give a short overview: cluttering sensitive public space (e.g. the entrance to a subway station) and thus inhibiting public life, bike oversaturation relative to the utilisation rate, damaged, unusable bikes that don’t get removed, unethical collection and sale of user data.
As disruptive technologies appear, cities and national governments feel an increasing pressure to control them and policy makers are put on the spot to address these issues. When their reaction is delayed, it leaves grey areas of regulation, and authorities end up needing to take a more strict stance than they would if they acted proactively.
Cities should not ignore the growing market and interest for independent bike-shares. For over a decade they have been paying for expensive and non-scalable systems, and now sit on a golden opportunity to promote what many have been dreaming: reduced traffic, improved urban mobility, societal health benefits, increased public safety and stronger local economy. The advent of private, highly technological and scalable bike-sharing system is a promising step forward and it is time for cities to provide the regulatory framework to leverage the opportunity. Instead of tendering large public procurements, now the more important task is to provide the guidelines for market competition that will have a positive impact on the cities.
Hurdles along the way
2017 has also been a year of challenges. Around spring this year the competition came flooding into Europe. After 3 years building a model for a sustainable bike share system that we believe is good for cities and responsible in its treatment of customers and the community, we began to face some backlash for the first time. Bike-share operators flooding city streets with bikes, poor respect for public space, poor maintenance of their systems, predatory pricing, data breaches, questionable use of user deposits.
In a short time what we have built has come under threat, not by the existence of competition, but by their operational standards. Amsterdam municipality moved fast in response to the influx of bikes on their streets and banned all bike-share companies from the city until the city develops a regulatory framework. A business which is built on ideas of resource efficiency, sustainability and urban living improvements has become known for the exact opposite.
Despite these hiccups along the way, Donkey Republic strides on strong, pushing forward with our model of a bike-share system that is tailored for European cities. Built from the hearts of people who believe in making city life better for everyone. From the best bike city in the world, Copenhagen.
1. We gave the Donkey brand a makeover
2. The Donkey Squad grew from 15 to 25 hard-working bike-lovers.
3. We made the Donkey experience a little easier for our German, Spanish, and Hungarian-speaking friends.
4. We launched our most requested product features – Flex drop-off at different locations around the city, and the ability to switch bikes during a rental.
5. We launched bike-share memberships for the hardcore Donkey riders to always have access to a cheap bike, all over the city and all over the world.
6. We made possible a huge amount of two-wheeled enjoyment.
The venture capital world has finally woken up to the potential of bike-sharing. So far Ofo and Mobike have each raised upwards of $500 million. The remaining 30+ bike-share startups, including the one I’m co-founder of, Donkey Republic, have also collectively raised perhaps another half a billion.
The results? In China, 50 million people are regular users on its 10 million shared bikes. The bike-share business, which was not seen as a venture capital case until 2016, grew tenfold in less than a year. The adoption of large-scale bike-share systems is likely to spread to Europe, the US, Latin America, India and other regions of the world.
The economics of bike-sharing
Bike-share riders in Europe commonly pay between €0.50 to €1 per trip, up to €3-4 to get to work and back, and an average of €10-12 for a whole day on the bike. These fees will drop in a future where they are integrated into monthly commute cards.
Ofo and Mobike are charging only 1 Chinese Yuan (~€0.14) per ride in China, and claim 6 trips are made per bike per day, bringing the revenue from rentals to around €0.50 per bike per day. If a bicycle costs around €250, lasts for 2 years, and needs low maintenance, rider revenues are not far from covering the costs. When these companies launch in Europe and the US the pricing will of course adjust to an expected rental fee of €0.50 per trip for up to 30 minutes. Compare that with paying 30 times the price to share a car, and you suddenly get why bike-shares are booming*.
The data accumulated by bike-sharing systems represents another revenue stream. Traditionally, they have used their bikes as moving billboards. Now, leveraging the data available on rider behaviour, bike-shares will start using their technology platforms to serve advertising, adding to their profitability and attractiveness for investors.
The role of policy makers
Disruptive bike-share companies may create some negative externalities that call for regulation. To give a short overview: cluttering sensitive public space (e.g. the entrance to a subway station) and thus inhibiting public life, bike oversaturation relative to the utilisation rate, damaged, unusable bikes that don’t get removed, unethical collection and sale of user data.
As disruptive technologies appear, cities and national governments feel an increasing pressure to control them and policy makers are put on the spot to address these issues. When their reaction is delayed, it leaves grey areas of regulation, and authorities end up needing to take a more strict stance than they would if they acted proactively.
Cities should not ignore the growing market and interest for independent bike-shares. For over a decade they have been paying for expensive and non-scalable systems, and now sit on a golden opportunity to promote what many have been dreaming: reduced traffic, improved urban mobility, societal health benefits, increased public safety and stronger local economy. The advent of private, highly technological and scalable bike-sharing system is a promising step forward and it is time for cities to provide the regulatory framework to leverage the opportunity. Instead of tendering large public procurements, now the more important task is to provide the guidelines for market competition that will have a positive impact on the cities.
Hurdles along the way
2017 has also been a year of challenges. Around spring this year the competition came flooding into Europe. After 3 years building a model for a sustainable bike share system that we believe is good for cities and responsible in its treatment of customers and the community, we began to face some backlash for the first time. Bike-share operators flooding city streets with bikes, poor respect for public space, poor maintenance of their systems, predatory pricing, data breaches, questionable use of user deposits.
In a short time what we have built has come under threat, not by the existence of competition, but by their operational standards. Amsterdam municipality moved fast in response to the influx of bikes on their streets and banned all bike-share companies from the city until the city develops a regulatory framework. A business which is built on ideas of resource efficiency, sustainability and urban living improvements has become known for the exact opposite.
Despite these hiccups along the way, Donkey Republic strides on strong, pushing forward with our model of a bike-share system that is tailored for European cities. Built from the hearts of people who believe in making city life better for everyone. From the best bike city in the world, Copenhagen.
1. We gave the Donkey brand a makeover
2. The Donkey Squad grew from 15 to 25 hard-working bike-lovers.
3. We made the Donkey experience a little easier for our German, Spanish, and Hungarian-speaking friends.
4. We launched our most requested product features – Flex drop-off at different locations around the city, and the ability to switch bikes during a rental.
5. We launched bike-share memberships for the hardcore Donkey riders to always have access to a cheap bike, all over the city and all over the world.
6. We made possible a huge amount of two-wheeled enjoyment.
评论
发表评论