The technology behind bike sharing systemsMay 17, 2011: 11:41 AM ET
Sharing a bike with a friend requires trust and a U-lock. Sharing 600 bicycles with the city of Boston requires technology and a big investment. Alison Cohen's Alta Bicycle Share is up for the task.
Alison Cohen used to ride her bike 17 miles to work every day, a "ridiculous commute," she now admits, but one which gives her solid cred in her current job: president of Alta Bicycle Share, a fast-growing operator of urban bike-share programs, based in Portland, Oregon.
Bike sharing, in which members pay a modest annual fee for rental access to carbon-free rides parked all over town, began in Copenhagen, made its way to Paris in 2005, and is about to achieve critical mass in the U.S. Denver, Minneapolis and DC all launched big new programs in 2010; Boston -- like D.C., an Alta project -- will roll out Hubway this summer, starting with 600 bicycles and 61 stations.
Fortune: I love this idea. But haven't they had a lot of problems with bike sharing in Paris?
Cohen: Basically, someone figured out how to force the bikes out of the docks. Paris's theft and vandalism issues were a huge obstacle in getting bike sharing to the US. But I would posit that the problems they've had there are specific to the technology.
How is your technology different?
We understand that the highest priority has to be a physically secure system. And anytime there's even the scent of a breach, you have to take on an almost military response to secure it. Because once it goes on YouTube, then -- [Laughter]
Our bikes and stations are built by Public Bike System of Montreal. We know the moment that we put these stations down anywhere the first thing people do -- mostly it's teenagers -- is try to steal the bikes. They'll jerk them up and down and side to side. In Montreal they have a picture of a Ford F-150 with a rope connected to a bike, but the truck couldn't get the bike out of the dock. With a system that's secure like that, theft and vandalism are very minimal. The only real theft we've seen in the U.S. has been people using a stolen credit card to take a bike and not return it.
Interesting. I mean, kind of depressing, but interesting. The other thing that's noteworthy about the Paris system is the way it was paid for, right?
Yes. Large outdoor advertising companies, such as Clear Channel, have for years been providing outdoor street furniture like bus shelters and stuff in exchange for billboard space that they can sell. They started adding little accoutrements to the advertising contracts and eventually they started throwing in bike-sharing systems.
Typically the city might see less revenue from outdoor advertising if it's also getting a bike-share system but the city doesn't have to come up with the up-front capital. So cities are really intrigued by this model. But then you have an advertising company running the bike-share system. The advertisers have what they want -- the advertising contract -- yet they don't have the proper incentives to manage the bike-share system.
I think U.S. cities really saw this as a misalignment of incentives. So that's where we came in. Public Bike System created a better technology. And we have direct contracts with the cities. They keep control of any sponsorship or advertising they want to sell. They control the color of the bikes. And we have to be totally transparent with them because they're direct government contracts. That gives the cities a lot more control over this really high-impact, community-changing system.
But aren't most cities basically broke these days? How do you pitch a program like yours when mayors are preoccupied with cutting budgets?
We don't pitch, we respond to requests for proposals. There are very few direct city funds that are being used for bike sharing. Most of the public funding is federal money to support capital purchases. And our projections are that within about three to four years, these may be public transit systems that are actually self-sustaining. What's more, compared to other capital investments, it's tiny. A quarter-mile of subway can cost billions. With bike sharing you can get a city-changing system for less than $10 million.
Where will bike-sharing be in the next few years?
In the Boston area, it will be a completely seamless regional system with Boston, Cambridge, Somerville and Brookline. And 2012 is just going to be an explosion. New York has a request for proposal out for a 10,000-bike system launching in 2012. Vancouver, 4,000 bikes, likely 2012. Seattle. San Francisco. The Bay Area. And the incoming director of transportation for Chicago is a huge bike-share fanatic; it wouldn't surprise me if they try and do something very quickly.
Those are all northern cities with liberal populations. I don't see Phoenix there. I don't see L.A. I don't see Houston, Dallas, Miami, Atlanta.
Every one of those cities that you just mentioned are interested. There are a million conversations happening in the background. The cities that I listed have either issued RFPs or said publicly that they want to do something. L.A. has been talking about it for a while. In Phoenix, there have been several different demonstrations there. Charlotte I think will eventually be there. I do think there are a lot more questions around how people will use bike-share systems in the more sprawled, car-centered cities, than in the denser coastal cities.
Do you feel safe riding your bike in the city?
I do. I mean, I've always viewed urban biking a sort of like skiing moguls. [Laughs] It's a challenge, and you have to be highly attentive, and finding the right route has always been the most important thing. But you know, in my four years of doing that ridiculous 17-mile commute, and many other years of urban biking, I've had two dooring incidents which have not resulted in any injuries, and no serious accidents. So I'm a huge advocate, and I personally feel safe. One of the reasons that bike share is so great is that you get more people biking, and it generally makes the streets safer for cyclists because automobile drivers are more aware of bikers.