Very cool use of materials. I could totally see this mass produced for children learning how to ride bikes and even cities testing out the "share-a-bike" program.
Although I doubt the $20 estimate without a way to automate production. The video made it seem like a fairly labor intensive practice.
I visited a city last week (Matsumoto) that has this service, they lend cheap city bikes for free by the day. Not even an ID card needed, you just write your name and phone number and go. It's a fantastic service when visiting.