Bikeshare’s Tech Shift
Bikeshare technology may be following the same path as other technologies where newer, less expensive technology displaces the standard-bearer.
Smart-Dock to Smart-Bike (to Smart-lock)
While CitiBike is wildly popular with its older 2007 smart-dock technology, the future of bikeshare is being tested across the Hudson River in Hoboken this summer (as part of Bike-the-Skyline). Hoboken is a hybrid approach that integrates the advantages of full-service bike rental with the newest bikeshare technology. It is being piloted by a team that includes Bike and Roll, Social Bicycles and E3Think. Hoboken is far from alone. Many recently-announced bikeshare programs have opted to shift away from the older smart-dock technology to the newer smart-bike technology. These include:
- Hoboken/NYC (Social Bicycles)
- Phoenix (Social Bicycles)
- Tampa (Social Bicycles)
- Yale University (Zagster)
Just like computers, phones and cameras, bikeshare technology continues to evolve: entrepreneurs and companies continuously figure out how to improve things. Driving bikeshare evolution from the smart-dock to the smart-lock are exceptionally high set-up costs due to infrastructure overkill. The smart-dock system (e.g. CitiBike, Divvy and others) requires three or more docking stations per bike to make the system work. Not only does redundant infrastructure lead to higher set-up costs, it also requires more real estate, is more to maintain, and has more components to go wrong (e.g. more computer glitches).
These American entrepreneurs saw the fundamental flaw of the smart-dock system and jettisoned the dock. The new smart-bike system can work with any existing bike rack system. The newer smart-bike technology can be organized in stations just like the older smart-dock system (or a completely open system). These can be dedicated, or available for all. The smart-biker can unlock the bike using a smart phone or an on-bike keypad. The new smart-bike technology can do all that the older smart-dock technology can do but at a fraction of the cost and with many more benefits.
The Smart Money Knows
It’s classic disruptive innovation. While some traditional smart-dockers struggled financially, the newer smart-bike companies have been financially backed or partnered with forward thinkers including Fontinalis Partners (Zagster), BMW i-Ventures as well as David S. Rose, SOS Ventures, Esther Dyson and Karl Ulrich (Social Bicycles). The numbers speak.
…but today’s current form of smart-bike where the lock is integrated into the bike may also soon be outdated. Companies like Bitlock and Lock8 are going for the endgame.
The older smart-dock: ~$10,000/bike; the smart-bike: <$2,000/bike; the smart-dock: <$1,000/bike. Fewer assets means less maintenance and fewer things to replace due to wear and tear. Less costly infrastructure requires less up-front planning. Similarly, less infrastructure means less to be damaged. The simpler the system, the fewer things there are to go wrong. The smart-bike can be organized in stations (like the smart-dock), or floating with bikes locatable via a smart phone. Whereas both the smart-dock and the smart-bike on a single bike supplier in a given market, the smart-lock can work simultaneously on a variety of bike brands and types. Net result: lower cost, less risk. This 1) accelerates roll-out (due to wider pool of financing), and 2) encourages local economic development.
The older smart-dock: ~$10,000/bike; the smart-bike: <$2,000/bike; the smart-dock: <$1,000/bike.
Fewer assets means less maintenance and fewer things to replace due to wear and tear.
Less costly infrastructure requires less up-front planning.
Similarly, less infrastructure means less to be damaged.
The simpler the system, the fewer things there are to go wrong.
The smart-bike can be organized in stations (like the smart-dock), or floating with bikes locatable via a smart phone.
Whereas both the smart-dock and the smart-bike on a single bike supplier in a given market, the smart-lock can work simultaneously on a variety of bike brands and types. Net result: lower cost, less risk.
This 1) accelerates roll-out (due to wider pool of financing), and 2) encourages local economic development.
Better Public Policy
Smart-dock bike-share programs in Washington DC and Denver are highly popular, but are used mostly by a well educated, wealthy and white demographic. In contrast, smart-bike bike-share works for that demographic, and also those who need bike-share the most.
This means that the bikes can supplied from local companies of all varieties. One example is the bamboo bike which in addition to being manufactured locally, the bamboo can also be grown locally.
Rather than importing foreign technology, some communities can use bikeshare to create an exportable technology.
Whereas the smart-dock requires a single owner/operator, the smart-lock model can be franchised meaning that developing cities can accelerate the roll-out of bikes to more neighborhoods and encourage local ownership.
This was developed in conjunction with the Harvard Alumni bikeshare study for New York City bikeshare. When a bike in a bikeshare program is in need of refurbishment, that bike will be donated or sold-at-discount to groups in environmental justice and other bike-deficient areas.
The smart-dock bikeshare model is ultimately based on the old landline phone. While most people continue to shift from the landline phone to the smart phone, the Hoboken pilot uses the Social Bicycle smart-bike system which has an on-bike keypad (no smart phone needed).
Dramatically lower set-up costs, an ability to franchise the technology and second-life-bikes makes it easier to make bikes available to all, including those without bank accounts.
Is available in stations or in a completely open system - The smart-dock program only works with cumbersome stations. In contrast, the smart-bike (SoBi) program can be similarly placed in a station, or in other locations. The smart-bike is more flexible.
Smart-Lock (click image to learn more)
(a) SF unit costs: $7.5 MM funding, divided by 700-750 bikes.
(b) Washington DC unit costs are from reason.com.
(c) NYC unit costs: $48 MM in sponsorships, divided by 6,000 bikes.
(d) Las Vegas unit costs are from company sources.
(e) Tampa unit costs are from company sources.
(f) Hoboken unit costs are from company sources.