Bicycle Sharing Grows in Major Cities, But Financial Outlook Is Poor

Cycling, both as a means of recreation and as a means of transportation, has grown dramatically. Between 1977 and 2009 in the U.S., annual bike trips more than tripled in number. Cyclists who pedal to work are also proliferating, with numbers doubling between 2000 and 2009. The U.S. Census’ 2012 Annual Community Survey showed that 865,000 people (about 0.61% of the commuting public) rode bikes as their primary method of getting to work, up 9% from 2011. Bicycle sharing systems are responsible for part of this growth, both in the U.S. and in other parts of the world, but many of these new services are off to a shaky start financially. The Earth Policy Institute estimated that the number of bicycles in U.S. public bike sharing programs was more than 30,000 in 2014 and expected the number to reach 38,000 in 2015. In some cases, operating costs have been higher than expected, in others equipment losses have been high or ridership has been low. Nonetheless, local governments are generally very supportive of encouraging this emissions-free, exercise-inducing form of transportation.

Advertising firm JCDecaux in Paris launched a bicycle-sharing program in 2007. About 20,000 sturdy, comfortable gray bikes called Vélíbs are currently available at 1,800 rental stations throughout the city. Riders can rent bikes by the day or the week, but there are also annual subscriptions that allow unlimited 30-minute maximum rides for about 29 Euros per year. Members create an account using their credit cards which includes permission for the company to charge them if a bike is not returned. Initially the program was a success with approximately 42 million rentals in the first 18 months, but by early 2009, about half of the Vélíbs in the original fleet had been stolen and even more had been vandalized. JCDecaux negotiated with city officials, who agreed to pay for bicycles needing replacement.

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Bicycle Sharing Grows in Major Cities, But Financial Outlook Is Poor, Business and Industry Trends Analysis

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