The use of bicycles is surging across the globe. Bike-riding is a fun hobby, a great way to get in shape, a complementary alternative to a car, a powerful way to help the environment and ultimately a good way to get around. Meanwhile, fleet-management services are popping up everywhere to attend to this demand. This article answers important questions about the bike-sharing business model. Let’s begin.
How do bike-sharing programs work?
Bike-sharing systems work by providing users with a way to travel that doesn’t involve any extra steps or human interactions. Automated bike stations are set up in an accessible location, where the customer can find a bike and rent it using a digital payment method, typically within the bike-sharing company’s app. The user then rides the bicycle to their intended destination, where they can return the bike to a docking station.
Are bike-sharing operators profitable?
No one can say for certain that every bike-sharing business will be a success, but there is some clear historical data that suggests they are on average profitable. The factors that will affect these outcomes include:
- Location
- Timing
- Competition
- Price of rentals
- Maintenance efficiency
When these things are at least average in comparison to other bike-sharing companies, it shouldn’t take more than a year to begin being profitable.
How to start a bike-sharing business
1. Start with the branding
Before getting ahead of yourself, remember that you don’t really have a bike-sharing business if it doesn’t officially have logos, website themes, a brand name, etc. Consider what you want customers to see when they install your app or visit your website.
2. Define your goals and targets
When starting a bike-sharing business, there are different potential systems to consider. You’re either creating a system directly for the consumer, or you’re building a model that other businesses can implement. After determining this, set some realistic goals and get started.
3. Choose the best types of bikes for your sharing model
This is actually one of the most important parts of a bike-sharing business, because if you don’t find the right type of vehicle, your customers will seek out competitors instead. So what types of things go into this process? Here are a few to consider:
- Cost
- Maintenance
- Replacing parts
- Speed
- Security (from theft, vandalism, etc)
- Color/shape
Aside from all these, you’ll also need to consider your potential locale’s climate. Obviously, biking through the cities of NYC requires different things than biking through a mountainous landscape in Colorado.
4. Obtain the necessary documentation, licenses, and authorization
There is quite a bit to be done in terms of appeasing city officials and obtaining proper identification and insurance. This will of course vary geographically, but the one consistent thing for everyone is that you’ll want to have this thoroughly researched and squared away. Each city will require different parking parameters, storage requirements, limitations on quantity and more.
5. Consider security aspects
In order to keep down maintenance costs and prevent major inconveniences to customers, it’s important to carefully examine security aspects. The first thing this entails is to find locking devices that are top of the line and tough to tamper with. Also, the locking mechanism should be uncomplicated for customers. The modern bike locks are digitally connected, so do some research into which system fits best. Finally, consider how you’ll want to track your fleet. This is generally done through some type of GPS system, and in order to keep your fleet completely secure and fully trackable, you’ll want a system that is trusted.
Final thoughts
With the convenience bike sharing programs bring, people are increasingly choosing this form of transportation. And, unless there is some unforeseen infrastructure change that makes bicycles obsolete (impossible), this choice will only increase.