Public Transport: Internet of Bikes

Bike-sharing is growing with breathtaking speed all over the world. Thanks to IoT technology, the systems are improving just as rapidly, bringing dramatic changes to urban mobility.

In 2004, I had a really remarkable experience. I had a six-hour layover at Copenhagen Airport during an international trip, so I decided to have a look at the city instead of the tax-free shops at the airport. As I came out of the subway that had taken me downtown, I noticed some bicycle stands with lots of colorful bikes attached to them by chains. By inserting a coin, they could be unlocked, taken for a ride and returned at any of the many stands spread across the city, where you could get your deposit coin back. Taking the bike gave me a chance to see the opera house, the castle, and, of course, the famous statue of the Little Mermaid – without even paying a dime. For me, on a sunny day there is no better way to get around a city than by bike. Back then, a system like this would only have been feasible in a peaceful and prosperous country like Denmark.

That’s how it started: A shared bike the author used in 2004 in Copenhagen (Image credit: Rainer Claassen)

A worldwide megatrend

What was a pioneering project in this Scandinavian metropolis has since become a worldwide megatrend where growing companies are competing to lead the market. Who would have imagined that in 2017 there would be about 600 bike-share operators worldwide, or that the industry would be expected to grow at about 20% per year, on track to be a $5.8bn market by 2020?

The new bike-share operators scatter bikes around a city and customers use an app to unlock them.

One of the reasons for this might be the trend toward a sharing economy. Probably more important is the ability to run an intelligent management system for public bicycles by using location sensors, wireless technology, and mobile phones. When the success story of bike-sharing began to take off around 2010, the systems were not very flexible and were rather inconvenient for users. Companies installed stations, where a finite number of bicycles could be racked, all over the big cities. Often the investors were players in public transport – in Hamburg for example, StadtRAD operated by German railway Deutsche Bahn.

Docking station of StadtRAD: The service is operated by the German railway in Hamburg, Germany

In the early days, to be able to rent a bike, you first had to subscribe with the company, allowing it to withdraw fees from your bank account or your credit card. To rent a bike, you had to use a terminal screen at the rental station and go through a rather complicated process to get hold of the bike. When you wanted to return it, you had to find another rental station, where you had to endure another process to check the bike in again. Even though fees for riding were quite low, these inconveniences kept many users from sticking with their subscriptions and discouraged potential users from trying it out. It could be quite a hassle to go through the process, especially when traveling. Over the next few years, many providers developed smartphone apps that made the process of enlisting to rent a bike much quicker and easier. Even with the improvements in the rental experience itself, bike-share growth stayed rather moderate due to several factors: it takes time to secure government and corporate sponsorships and get support from local authorities to cover the cost of installing the expensive docking stations, as well as having to set up credit card payment systems.

Tandem ventures: Deutsche Bahn and Ford cooperate on bike sharing in Cologne.

In Europe, some rather unexpected joint ventures have been formed to help overcome these hurdles. Deutsche Bahn is cooperating with car manufacturer Ford in Cologne and Düsseldorf (www.fordpass-bike. de) and with the Lidl supermarket chain in Berlin (www.lidl-bike.de). Development in the US has been quite similar to Europe and, lately, bike-sharing has exploded seemingly overnight in China, due to an influx of venture capital and a model that eschews docks, making expansion cheaper and easier.

Deutsche Bahn in Berlin – the partner for bike share is the Lidl supermarket chain (Image credit: Deutsche Bahn).

The new bike-share operators scatter bikes around a city, and customers use an app or scan a code to unlock them. The bikes can be left near a bike rack, on a sidewalk, or in a park within the range of the system. Without the need for docks, these startups can launch in a city in a matter of weeks without government help because they are subsidized with venture capital.

Britain’s YoBike instructions shows how easy bike rental has become:

1. Download the app. Open the Google Play or iTunes App Store app on your smartphone and search for YoBike. Launch the app and follow the registration process; it shouldn’t take more than about two minutes to get set up.
2. Find your closest YoBike. You can locate bikes near you from the home page of the YoBike app. Once you’ve found a bike, scan the QR code on the rear of the bike’s frame. YoBike will unlock, then 60 minutes of hassle free cycling starts! You can also enter the bike number manually.
3. Finished your ride? Two things before you go: Check the in-app map to park your YoBike next to one of the allocated parking spaces across your region. Close YoBike’s lock on the rear wheel and mark your trip as completed within the YoBike app.

Mobike and Ofo are two of the most successful Chinese companies in this market and both operators have already started to expand their operations into other countries. Companies learn quickly these days: American market leader LimeBike has successfully copied the scheme. After launching with a $12m seed round, the dockless bike-sharing startup announced in October 2017 that it had secured $50m to expand nationwide. LimeBike provides citrus colored bikes that can be parked and picked up from anywhere using their dockless stations.

Expanding in all directions

In the first six months since its launch in March 2017, LimeBike claims to have logged over half a million trips and currently counts 250,000 registered users. With the new funds, it is planning to increase the size of the current deployed fleet tenfold by the end of the year.

Find YoBike: No docking station needed: leave the YoBike wherever you want

The company is also expanding in other directions with an initiative called Lime Business Network, which allows local businesses to offer memberships to employees as a perk. Among the competitors in the space are Velos and Nextbike in Europe, Mobike and Bluegogo in Asia, and Spain and CycleHop in the US.

Everybody's doing it Successful bike-sharing companies worldwide

Beijing Mobike Technology. Founded in 2015 in Beijing, China. Mobike operates in over 160 cities in China and has started to expand internationally. In Europe, it has bikes in London and Manchester in the UK, and in Florence and Milan in Italy. In September 2017, It opened its frst service in the US in Washington, DC.

Read more information at:  www.mobike.com

Cooperation with public transport will also draw additional customers to bike-sharing. A hybrid scheme comprising 900 smart bikes has been set up in Cologne by Nextbike where public transport users can use their e-tickets to access the bicycles. In some parts of the city, there are “free-floating zones” where you can leave the bicycles at any road intersection, whereas in other areas rent-and-return is only possible at official docking stations. Additionally, users get a free 30-minute ride without a separate registration with Nextbike. An integrated computer makes it easy to access a bike by holding the KVB transport e-ticket over the card reader. This shows how integration among different public transport modes using a wireless near-field communication (NFC) smart card can offer significant advantages.

What is the attraction of investing huge amounts of venture capital in this market? It’s easy to guess when you see one of the development partners of Mobike in China is the contract electronics manufacturer Foxconn. From the more than 20 million rides on their bikes each day, five terabytes of data are generated: usage, movement patterns, duration, and destination.

This can help authorities in planning bus stations and parking lots. Of course, IT firms are also interested. Tencent, the producer of WeChat (a Chinese app similar to WhatsApp), has also teamed up with Mobike; Alibaba is working closely with Mobike competitor Ofo – which has also announced a global partnership with the payments platform Adyen. The collaboration will allow customers around the world to pay using local currencies and payment methods. We can expect similar collaboration and cooperation on other continents.

Too many bicycles

With the growing number of dockless shared bicycles, a new problem has turned up: there are too many of them. After the Singapore-based oBike started a dockless service in Melbourne last summer, with plans to provide 10,000 bikes around the city, the bikes kept turning up in places where nobody wanted them. They cluttered up busy footpaths; some were even hung up in trees, and others were dumped in the Yarra River. The reaction of Lord Mayor Robert Doyle was harsh: “We work hard to keep the city free of clutter. They are clutter and that must be fxed.” Hopefully, the dialogue with oBikes’ head of marketing Chethan Rangaswamy will be successful and can be used as a model for fixing similar problems in other places.

What has happened in Copenhagen since my first encounter with public bike-sharing?

In 2014, a highly advanced electric bike-sharing program was launched. Bycyklen provides a way for Danish commuters to use the bikes for their whole commute or to use them for the first or last mile in combination with mass transit. The program also appeals to tourists with the slogan: “See Copenhagen like the locals do. Get on Bycyklen and experience the wonderful sights of Copenhagen like a Dane – on two wheels.”

Bycyklen: Weather-proof touchscreen devices on every bike

The Bycyklen e-bike with a front-hub electric motor is built by GoBike and features a touchscreen tablet computer on the handlebars with built in GPS for finding docking stations, public transit, and tourists spots, such as museums, restaurants, hotels, and parks.

The touchscreens are weather- and tamper-resistant. In addition, the bikes are driven by a Gates Carbon belt drive to reduce maintenance and eliminate dirty, oily bike chains. The new program has hundreds of GoBikes at 20 docking stations in Copenhagen and Frederiksberg, with one station at City Hall for politicians and government workers to use.

How does a rental system work?

Customers register and choose a payment method – credit card billing is still the most common

In most cases, users have to provide their address or a deposit as a guarantee against theft of the bikes. Once registered, users can select a bike using a map in their smartphone app. Bikes are equipped with GPS modules and can be located by the management software. Once a user has found a bike, they may scan a QR code or enter its ID in the app. The app then sends the user a code, which is typed into the special wheel lock on the rear of the bike – or opens the lock automatically. The user can then begin their journey. When finished, the rider parks the bike, clicks the lock back in place, and the user’s online wallet is automatically charged. Some bikes are “geo-fenced,” limiting where they can be used.

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