Smart Industry 1/2018

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
bi cycle 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.
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?
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.
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.
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
That's how it started:
A shared bike
the author used in
2004 in Copenhagen
The new
bike-share
operators
scatter bikes
around a city
and customers
use an app to
unlock them
Docking station of
StadtRAD
The service is operated
by the German railway
in Hamburg, Germany
photo©: R. Claaßen
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.
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 hasslefree
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
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