Bike-sharing: Sharing two wheels is becoming ever more popular

Bike-sharing: Sharing two wheels is becoming ever more popular

Oct 12th 2013 |From the print edition

IN MORE than 500 cities in 50 countries, shared bicycles have become a colourful addition to street life. Schemes have increased tenfold since 2004. Most work on the principle that a user hires a bicycle at one of a number of docking stations dotted around a city. The first 30 minutes are usually free for members (annual memberships range from a $35 deposit to a $145 fee), and charges rise the longer users hang on to the bikes. The two-wheelers vary from clanking, no-frills frames in Hangzhou, in China, to the luxury models with built-in GPS and smart tablets that will be launched in Copenhagen next month.Bicycle-sharing has come a long way since the 1960s, when 50 white “free bikes” were scattered around Amsterdam, only to be promptly stolen. A second generation of coin-operated bicycles still got nicked. A third generation solved that problem with electronic docking stations and credit-card payments. Susan Shaheen, an expert on sustainable transport at the University of California, Berkeley, thinks that bike-sharing is now heading towards a fourth, less wobbly generation. Innovations such as mobile solar-powered docking stations and IT-based redistribution systems (to get the bikes to the right place at the right time) are already well established. Some cities are now moving on to offer seamless integration with public transport.

According to a study by the Earth Policy Institute (EPI) in Washington, Europe accounts for most of the programmes, but Asia has the largest number of shared bicycles, with over 350,000 in China alone. Even in often bike-hostile America, which in 2012 had 21 schemes with 8,500 bicycles, the EPI expects the fleet to more than quadruple by 2014, to 37,000. In London, which has 8,000 shared bikes, another 2,000 will be added later this year. In Paris the Vélib scheme, which opened in 2007, has already racked up 173m journeys.

Many of the larger bike-sharing schemes are public-private partnerships that rely on a combination of user fees, advertising revenue, sponsorship and government money. New York’s 6,000-bike venture, launched this summer and sponsored by Citibank and MasterCard, charges a lot more than other cities ($10.83 for 24 hours against $2.30 in Paris), and hopes to make a profit. In Paris JCDecaux, an advertising firm, pays for the programme in exchange for advertising space on bus stops and billboards.

London’s “Boris bikes”, named after Boris Johnson, the mayor who introduced the scheme, benefit from a £50m ($80m) sponsorship deal with Barclays bank, but nearly half this year’s running costs will still come from the public purse. Transport for London, which runs the scheme, says that all public transport in the capital is subsidised, and bikes are no exception. No two bike-sharing business models are alike, but for most cities the point of such schemes is not to make a profit but to reduce congestion, ease parking problems and encourage their increasingly flabby inhabitants to take more exercise.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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