Dockless Bike Shares: Addressing the First and Last Mile

Dan McCombie is a research associate at Larisa Ortiz Associates

These days there’s a lot of talk about whom or what the next big disruptor is going to be and what industry it’s going to shake to its very core. I wasn’t expecting it to happen in the bike sharing industry. I say this because bike sharing still feels in some ways very nascent. My neighborhood of Crown Heights just had a rollout of new docking stations this year to meet still growing demand and yet now we have the emergence of these “dockless” companies? What exactly are they and what do they mean for commercial districts? 

Unlike traditional bike shares, which require picking up and dropping off a bike from designated stations, dockless bike share eschews them altogether so that riders can use their smartphone app to locate, unlock, ride, and drop off the bike in conceivably any public space (think Car2Go). This is important for commercial district practitioners because it deals with the “first-and-last mile” issue. Most people are comfortable walking a ¼ mile to a bus stop, train, or other fixed-route transit system, but the number drops off precipitously as the distance grows. This pushes people into their cars, to other shopping districts, or prompts them to stay home. Traditional bike shares have sought to address this, but their locations have been subject to certain criteria like population density, number of jobs, or the presence of certain anchor institutions. Not so anymore. For that reason we need to think creatively and critically about how dockless bikes might impact our commercial districts. What follows is a breakdown of what I think are the key benefits, issues, and ways to move forward.

What are the benefits? 

1. Cheaper for cities  

Unlike publicly subsidized and corporate-sponsored traditional bike shares, dockless companies are privately owned and operated. The money the city saves on building stations and maintaining the system can hypothetically be diverted towards better infrastructure, like more bicyle racks and lanes for all users.

2. Better access

Whereas bike share stations are put in locations based on a set criteria, dockless bikes can be anywhere. If your neighborhood has missed out on getting a station in the past, this is an equalizer.

3. Cheaper for riders

Private dockless bikeshares cost roughly half the price of traditional bike shares. Washington, DC's recently implemented dockless bikes cost $1USD/half hour compared to $2 for Capital Bikeshare. 

What are the issues?

1. Ineffective rebalancing

Without designated stations and a well-staffed team, bikes may not always be where people need them during daily commutes. This can also result in bikes concentrating into disorganized piles, creating eyesores, and being an overall public nuisance.

2. Socializing private costs 

Maybe the city saves money by not having to build stations, but if it has to expend money and resources to clear sidewalks and streets (and even trees), at what point does the calculus stop making sense?

3. Lack of regulation

Cities lack the regulatory framework to address dockless bikes. Some companies have employed Uber-style tactics to break into markets without municipal consent, creating public backlash. Cities have tried to respond with stricter policies that could hamper growth. Until cities establish a regulatory framework with the cooperation of these companies, tension is likely to grow and with unpredictable externalities.  

What are the solutions?

Much of the rhetoric around dockless bike shares treat them as a referendum on how well our communities care for public goods. If bikes are vandalized, abandoned, or lost then it’s somehow a commentary on its citizens. Whether or not you agree with that statement, it doesn’t solve the issue. It makes better sense that these dockless companies would want to address the issues head-on in order to realize a better bottom line. If bicycles are being abandoned, that’s one less bike generating revenue. And it doesn’t help that cities aren’t taking kindly to cleaning up the mess. For cities like Singapore and Melbourne, this has meant impounding bicycles and assessing fines to the operators. In the case of Amsterdam, it was so dissatisfied with its own experience that it put a comprehensive ban on all forms of dockless bikes until further notice.   

Companies are seeking to mitigate concerns and inefficiencies by implementing their own credit and penalty systems. Credits are earned for reporting broken and illegally parked bicycles, posting a ride to Facebook, and otherwise having a successful trip. Penalties are assessed for parking in non-designated areas, forgetting to lock the bike, violating traffic rules, or losing the bike outright. The aggregate effect of these credits and penalties is either an increase or decrease in future prices. Other remedial measure include creating approved parking areas and geo-fencing, where the smartphone app clearly delineates where bikes are allowed to be parked and imposes fines on users who violate the boundaries. For me this presents an argument in favor of information-sharing arrangements between companies and cities. If cities are going to spend money on infrastructure like bicycle racks, lanes, and parking lots, they should know where it makes the most sense to do it. What better way for a company to cultivate goodwill than to share what it has learned through practical experience?

As commercial district practitioners, dockless bikes represent a potential opportunity. Does a shopping district lack the capacity to create a traditional bike share station, but has parking that could be converted into a bicycle lot? Is a high-volume train or bus station just far enough from a commercial corridor as to discourage pedestrian visitation, but could attract cyclists? Are you looking to attract tech-savvy Millennials and consumers who don't own cars?

Maybe dockless bikes are an answer. 

Below is a chart of some of the leading actors in the dockless bike share industry. 

For further information, I strongly recommend the Common Position Paper on Unlicensed Dockless Bike Sharing by the European Cyclists' Federation website. You can find it here.