Comment by awongh | Hacker News Reader

Comment by awongh | Hacker News Reader

I wonder what the actual economics of a business like this are?

What are the real rental rates at which these companies make a profit? Because at $0.15 an hour it seems like well below what the cost of running the service might be. (also including the cost of buying and maintaining the bikes)

To what degree does the business model rely on becoming the dominant player?

What is the scale you have to reach to be profitable at $0.15 an hour? How many bikes do you need and how many trips need to be taken?

From what I understand about the habits of people with the nyc bike share program, the movement of bikes needs a lot of human intervention to remain effective, and the bike locations balanced. Are they just hoping that the pure density of bikes in the system helps them overcome this? I would think that manual rebalancing of the system is quite costly. (A driver has to track the bike down via GPS and pick it up, vs. a dock system where the drivers know where to find the bikes)

In the Dutch bike-share system OV-fiets, a bike costs €3.65 per day, so that it similar. It is subsidized though (but I don't know how that works out percentage-wise). On the other hand, things are still a little cheaper in China, I think.

That's quite expensive. In Barcelona the scheme is a fixed €47 subscription per year though you can only use the bike for 30 mins per ride (after that there's a surcharge).

A similar scheme just opened here in Helsinki. The cost is €25 for a year, with each of your journeys being free if it lasts for <30 minutes:

https://www.hsl.fi/en/citybikes

To be honest Helsinki has such excellent transport infrastructure (bus + tram) that I've never been tempted to sign up for the bike scheme (as I have my own already).

OV-fiets is 3.85 euro for 24h though, and no yearly fee. That's a whole different use case than a short ride within a city from one bike parking to the next. I'm sure the surcharges in Barcelona would add up to more if you kept it 24h.

I suppose higher wages in Holland play a role, but mostly the system is just very different from Barcelona (or at least what I remember from being there a few times a few years ago).

The OV-fiets is a bike you get at a train station (maybe some metro stations too; not sure), and typically you'll use it to get from there to your destination and then back to the train station.

The system in Barcelona (and most other cities too, I think) is more about getting from A to B in the city and there are pick-up / drop-off points around the city.

In the former scenario charging by day makes a lot more sense, I guess. There's 1.3 bikes or so per Dutch person, so few people would have use for a Barcelona-style approach.

It's similar with these car sharing services. The on we have across cities is a bit like the OV-fiets: you pick a car up at a designated parking spot and return it to the same spot, often as a 'supplement' to your longer-distance public transport. Only in Amsterdam (AFAIK) we also have companies that allow you to pick up a car nearby and leave it anywhere at your destination.

It sounds like they don't do too much maintenance on the bikes, so that cost is probably fairly low. And I wonder if bikes would need to be rebalanced manually? Presumably with enough bikes in the system, the bikes would be distributed around population centers pretty well.

Perhaps you can charge more for moving bikes in the "wrong" direction - i.e. if bikes always end up in manhattan then if you bike to brooklyn from manhattan it's cheaper than vice versa?

Perhaps the economics are buy really cheap bikes and hope on average they are ridden for enough hours to cover the cost before they end up broken / lost / stolen.

Reply on news.ycombinator.com