Do the economics of bike-sharing schemes stack up?

O Bike in Sydney. Image: Getty.

Have you ever walked past (or tripped over) a shared bike and wondered how it’s possible for the business to survive with a ride costing so little?

While bike-share schemes attract controversy in some places, the economic models behind such schemes actually have more to do with data mining, advertising and turning a profit from interest on the deposits than from the bike rental itself.

The most recent example in my own part of the world is Obikes. Launched in Australia in mid-June, there are currently over 1,250 dock-less Obikes in Melbourne and over 1,000 in Sydney. According to its marketing director, Obike’s Australian user numbers have increased rapidly since its introduction.

However, despite the promise of cheap and convenient access to bikes, Obikes have faced a number of challenges since their very first few weeks of operation. There have been complaints about Obikes clogging footpaths and becoming hazards as a result of people failing to park them within designated spaces, as well as complaints about Obikes hogging existing parking racks, leaving inadequate space for commuter cyclists to park their own bikes.

The massive potential for bike share schemes expansion

In theory, there are plenty of possible ways to make a profit from the shared-bike business. Its lucrative business models have proved attractive to entrepreneurs and investors.


The ride-and-pay model is the most straightforward profit-generating operation - but only one method of making the schemes profitable. For example, a half-hour ride of an Obike will cost the user A$1.99. If a bike is used for 10 half-hour trips per day, the total daily return will be A$19.9. A three-month operation could collect A$1,791. This will cover the initial investment made on the bikes, as well as some operational costs such as lost bikes and repairs - depending on the frequency of bike usage per day.

Bike-share schemes can also cash in on the deposits they require from users. The majority of schemes require users to register and pay a refundable security deposit to use the shared bikes (Obike asks for a deposit of A$69). Collectively, the amount of money held in the deposit pool is potentially enormous.

One Chinese bike-share company, Mobike, reportedly had over 100m registered users in June this year. The Mobike deposit account therefore held over 30bn yuan (about A$6bn) paid by the 100m users at 299 yuan per user. The interest earned from this sum alone is a huge income-generating asset, not to mention the scope to invest this money while it’s held in company coffers.

Data services present another significant potential income stream. The user database is huge – more than 100m trackable users in the case of Mobike. This can be used for marketing and the analysis of consumer behaviour if combined with other data sets.

Users’ riding behaviour data, captured by apps and GPS, complement very well the data sets collected from taxi and public transport systems by focusing on smaller areas. This data has a high commercial value to businesses in retail, restaurants and even car sales, as well as to local governments seeking more detailed information for urban planning and management applications.

Advertising is another means to generate profit by using both the physical body of the bikes to advertise as well as the app used to locate and unlock the bikes. However, the limited usable space on a bike and the short interaction time between the user and the app make it hard to generate significant income this way.

Teething problems persist but bike-share schemes likely to keep growing

In Beijing and Shanghai, where dockless shared bikes were first introduced, bikes have been thrown into rivers, garbage dumps and even into trees. Pedestrians are forced to push their way through swathes of parked dockless shared bikes, often leaving behind a trail of fallen bikes or bikes stacked on top of one another on footpaths. The Hangzhou government has seized tens of thousands of shared bikes in an attempt to reinforce bike parking laws.

Melbourne Lord Mayor Robert Doyle has complained that Obikes are the source of so much clutter that he has threatened to ban them altogether.

In spite of these ongoing problems, bike-share schemes continue to grow into new markets globally, with new schemes in Florence and Milan the latest examples. At the same time, withdrawals from the market by less competitive or poorly executed models are occurring.

Local controversies over shared-bike schemes are expressions of how resident behaviour, municipal bylaws and cycling infrastructure are all too often proving to be unprepared to embrace and support a new mode of urban transport.

The ConversationPublic and local government criticisms and complaints may delay (or in extreme cases) even ban the bikes from particular cities. But as long as the interest for capital expansion and the broad social, environmental and health benefits are recognised, these schemes will continue to grow globally.

Sun Sheng Han is professor of urban planning at the University of Melbourne.

This article was originally published on The Conversation. Read the original article.

 
 
 
 

Wild boar are moving back to Genoa, and not everyone is pleased

A wild boar, c1933. Image: Getty.

Crossing the Ponte Gerolamo Serra in the Italian city of Genoa, I spotted a small crowd clustered by the river wall. I approached, intrigued, and peered over the wall to discover the subject of their delight: a sounder of eight wild boars – the adults sheltering from the heat in the undergrowth, while the juveniles foraged among the foliage that grows in the river bed during the dry summer months.

In any other city, such a sight might have been surprising. But in Italy, and particularly in the region of Liguria, where Genoa is located, the population of wild boars has been increasing at such a rapid rate that these incidents are now common. Across the country, it’s estimated that the population has risen from 600,000 to 1m over the past decade.

But while wild boars may look comically out of place trotting about the city, it’s actually a natural result of the way people have migrated – and the wars they have fought – over the course of recent history.

Making a comeback

A species native to Europe, the wild boar (or “cinghiale”, in Italian) largely disappeared from its historical territories during the 18th and 19th centuries. Their decline was widely attributed to the combined effects of habitat change, competition for space and resources and, of course, hunting.

Wild boars were a prized quarry, revered for their ferocity – and the danger involved in pursuing them. According to local folklore from the region of Liguria, the last truly wild boar was hunted and killed in 1814, in the province of Savona.

After an absence of more than a century, wild boar began to return to Liguria, and to the neighbouring region of Piedmont. A further influx occurred during World War I, when it’s believed that military activities in the south-east of France forced parts of the population back into Italy over the Alps.

Although hunting fraternities were quick to augment this fledgling population with wild boars transported from elsewhere, the return of the species was primarily due to natural causes. From the 1950s onwards, traditional agricultural practices were abandoned as more and more people moved from rural towns into the cities. This meant that large areas of formerly cultivated terraces and pastures were rapidly overgrown, fast becoming dense secondary woodlands.

A city gone wild

This spontaneous “rewilding” has become a controversial issue in the region. Many conservationists and environmental organisations consider the region’s return to a “wild state” a success. But others believe that the encroaching wilderness signals a loss of traditional woodland knowledge and a reduction of biodiversity, associated with the pastures and meadows.


The province of Genoa is among the areas most densely populated by wild boar in Italy, with an estimated 25 boar per 10km². Rewilding processes have brought woodlands to the city limits, blurring the boundary between rural and urban areas. The species has expanded beyond the hinterlands, colonising highly urbanised, densely populated city spaces in Genoa, drawn by the abundance of food waste created by humans.

In 2009, the infamous boar Pierino made his home at Righi, on the outskirts of Genoa, where he was routinely fed with focaccia by enthusiasts. Today, a family of wild boar call the Albergo dei Poveri – a historical hostel for the Genoese poor in the city centre – their home.

But while their antics are often recorded and shared with glee on social media, the threats posed by the presence of wild animals has become a preoccupation for the city’s municipal administration.

Boorish behaviour

Wild boar have been involved in a number of traffic accidents, and have proven to be particularly dangerous when with their young, attacking dogs and even people. The city council in Genoa has put forward many proposals to reduce the number of animals in the city, ranging from forced removals, to sterilisation, increased attention to waste disposal and approved hunts. About 90 wild boar were reportedly culled in 2018.

Needless to say, each of these measures has been hotly debated. Animal advocacy groups staunchly oppose the proposals, and sometimes obstruct the authorities’ attempts to take action, often sending patrols to care for the animals, and even give them names. But other residents are displeased with the animals’ presence in the city, and have consulted with the council on how to address the problems that they cause.

And so Genoa continues to grapple with thorny issues surrounding the presence of wild boar in the city, with the city authorities seeking to resolve a polemical issue that embroils the lives of animals and humans alike. So far, a collective, coherent and communally agreeable strategy has proven evasive; one that considers the need for public safety, hygiene and health with the ethical responsibilities towards to wild boar themselves.

Meanwhile, the animals themselves continue to lounge and forage beneath the Ponte Gerolamo Serra and elsewhere, bringing a little of the wilderness into the city.

The Conversation

Robert Hearn, Assistant Professor in Human Geography, University of Nottingham.

This article is republished from The Conversation under a Creative Commons license. Read the original article.