The Looming Bike Share Battle
Why SF’s New Ford GoBike System Could Fail. Fast.
Ford GoBike launched a couple weeks ago with 2000 new bikes on the streets of San Francisco and plans to grow to 7000 bikes in the region by the end of year, cementing cycling as a legitimate ingredient in our public transportation mix. Excitement for the new system is high, but GoBike rolls out during a tumultuous time for bike share, as new technology is quickly driving change in the industry and posing a major threat to the new system.
Earlier this year, a Chinese company called Bluegogo planned to quietly drop thousands of rentable bikes on the streets of San Francisco. Officials caught wind of the plan and halted it, citing public right of way and safety concerns. But smartphone-powered bike share has dominated Chinese cities over the last 18 months, where companies like Bluegogo and their more entrenched rivals Mobike and Ofo operate more than eight million bikes that can be parked and locked wherever the renter chooses. For the most part, the pervasive, low cost bikes have been a welcome transportation boon in cities choked by cars and smog, but the sheer number of bikes and the physical space they demand have induced their own choke hold, as bikes pile up in alleyways and frequently block the public right of way.
Soon after the block, San Francisco passed an ordinance barring unpermitted bike share. It was a move that was at least partially protectionist, considering the longstanding exclusive partnership between the MTC and Motivate, the company that manages many of the large systems in the U.S., including SF’s Ford GoBike. The success of last week’s launch is paramount to GoBike’s ongoing viability, and would have been threatened by a cheaper, more convenient alternative hitting the streets several months prior.
It’s unlikely that the agreement will fully protect Motivate from private systems. Other sharing companies like Get Around and Scoot have long since negotiated the use of public infrastructure, so the precedent exists for private companies to benefit from public space. And with more than $1 billion of venture funding recently flowing into this wave of private systems, including to Silicon Valley companies like Spin and Limebike, there is certainly the money and determination to make it work.
Already a second threat, from established bike share player Social Bicycles, has found its way onto SF streets. Social Bicycles is piloting an electric bike share system called Jump that managed to slip through the city ordinance thanks to its position as a UC Berkeley study funded by the Federal Highway Administration. For now it’s just 100 bicycles, and accessed by invite only, but the fact that the pilot launched the same week as GoBike surely isn’t a coincidence.
It’s possible that the city can support multiple formats. Ford GoBike will have the advantage of city support, Clipper integration, and ubiquitous stations, but its system is far from perfect and fully private systems will exploit that.
Private bike share will fill the geographical gaps in the North and West of the city, open because of issues related to operating expenses and topography. It will also overcome many of the clunky user experience issues of Gobike. It eliminates the dreaded “dockblock”, arriving at a dock to rent a bike to find none available, or attempting to return a bike and finding the dock full. Private systems are also likely to address the 30-minute time limit, a ticking clock of anxiety for riders unable to find a parking spot.
Pricing is where Motivate and GoBike are most at risk. While most rides in a Motivate system come from regular commuters who opt for monthly and annual memberships, revenue is propped up by casual riders and tourists, especially those that exceed their 30-minute allotment and get hit with heavy fees. Price-per-ride is expected to be much lower for the occasional rider with private share, at $1 per ride compared with GoBike’s $3 introductory offer. And while traditional systems in different cities all operate independently, a private system will allow for multi-city integration, meaning one app, one profile, and the ability to seamlessly rent bikes in whichever city they exist. That is, assuming they exist anywhere.
Skeptics of private share have legitimate concerns. The durability and general quality of the bikes are still in question, and it’s hard to imagine leave-anywhere convenience without some obstruction of public right-of-way. Equity is another issue. GoBike has a directive from the MTC to provide equitable service, including access without a credit card, and low-income discounts; it’s unlikely a fully private system would take on the same responsibility.
GoBike’s success is no given. Seattle shuttered their Motivate-run Pronto system this year, citing poor ridership caused by a range of issues like weather, hills, and a mandatory helmet law. Private share companies are salivating to launch in Seattle, and the city is complying, having just rolled out its rules for private bike share operators. We should see private bike share operating there by the end of the week. Success in Seattle will embolden the start-ups to scale quickly into other major U.S. cities.
In the face of stiff competition, San Francisco needs to prepare for the possibility that the GoBike system will not be financially self-reliant as planned, despite a $50 Million sponsorship from Ford. We may need to decide whether to direct public dollars to uphold it as a public good and ensure ongoing and equitable access for a valuable transportation solution. Alternatively, we can expose GoBike to the brunt of market forces, knowing it risks losing.