Bikesharing programs have grown in popularity in recent years and are sweeping cities across the nation as an environmentally friendly form of public transportation. Their presence certainly sparks interest in cycling among a demographic far-removed from bicycles in their daily lives, but will traditional bike sales benefit or be cannibalized by a new rental industry?
Cities Embrace Bikesharing
Faced with ongoing public transportation challenges, many US cities have turned to bikesharing systems to help their residents commute and explore the city. In particular, dockless bikesharing systems – in which a rented bike can be returned at any bike rack or along any sidewalk in a given area of a city – present an opportunity for cities to fill in the holes in their current public transportation systems.
In 2018, Boston’s Metropolitan Area Planning Council selected LimeBike and Spin as the vendors enlisted to supply dockless bikesharing services to 15 participating communities in the Boston area. Users are able to pick up and drop off bicycles almost anywhere. Rental options include both traditional bicycles and pedal-assist electric bikes (e-bikes). The program, called BLUEbikes, offers an annual membership with unlimited 45-minute rides for local commuters at a cost of $99 per year. Compared to purchasing a bicycle, bikesharing is incredibly affordable. Even leading ridesharing company Uber is getting in on the bikesharing business, with bikes and scooters from JUMP and scooters from Lime now displayed as options on its app in the Atlanta and San Diego markets.
Despite the noteworthy expansion, some localities are seeing less success with bikesharing programs – but not due to lack of demand. Spin pulled its bicycles out of the Lexington, Kentucky market in late June. Faced with future fees and fines due to the need for its bikes to operate in dedicated bike lanes and the company’s responsibility in the actions of users, the company decided to refocus its energy in the city to its more profitable line of electric scooters (e-scooters). Unlike bicycles, e-scooters are able to be used on sidewalks in areas such as the University of Kentucky campus. Scooters are also powered as well as smaller, lighter weight, and more maneuverable in a city than bikes. As other cities tighten their regulations on bikesharing companies, similar shifts and exit maneuvers may be seen from other firms.
E-Bikes Spark Consumer Interest
A major draw for consumers to try bikesharing systems initially was the availability of e-bikes as rental options. Many cities, such as Madison, Wisconsin, are embracing e-bikes over traditional varieties. In June, the city replaced all of its Madison BCycle red rental bikes with white e-bikes capable of reaching speeds of 17 mph.
How do bike shops feel about the spread of bike and e-bike rentals in their cities? Reactions are mixed. Many note that if a local resident rents a bike and enjoys it, they may eventually be able to justify purchasing a personal bike or e-bike. The exposure to cycling at a low price point for a previously untapped demographic is a valuable tool for bike shops. However, since bike shops often offer rentals, shop owners view potential rentals to tourists and others who might otherwise purchase a one-day rental from them as lost business.
Nevertheless, sales stand to benefit from the advent of city-wide bikesharing despite the deterioration of the traditional, shop-based rental industry. With cities methodically increasing the availability of dedicated and protected bike lanes, bikesharing programs will benefit from the availability of additional infrastructure. While the introduction of e-scooters hurt the viability of some bikeshare programs, a concatenation of serious accidents and a puzzling issue with improper disposal are forcing cities to face the initial side effects from the introduction of a novel form of public transportation. Bike shops may suffer the side effects of lost rental revenue, but new buyers are rising from the pile of rental scooters and bikes on the sidewalk every day.
Want to Learn More?
Don’t worry, we have you covered! For additional information and analysis of US industry trends, see Bicycles: United States, a report published by the Freedonia Focus Reports division of The Freedonia Group. This report forecasts to 2023 US bicycle demand in units and in nominal US dollars at the manufacturer level. Total demand in volume and value terms is segmented by product in terms of wheel diameter:
- smaller than 20 inches
- 20 inches
- 24 inches
- 26 inches or larger
To illustrate historical trends, total demand, the various segments, and trade are provided in annual series from 2008 to 2018.
This report encompasses non-motorized bicycles and a small number of other cycle types such as unicycles and tricycles. Electric bicycles and electric scooters, and separately sold accessories, components, and tires are excluded from the scope of this report. Re-exports of bicycles are excluded from demand and trade figures.
You can also check out some of our related reports, which include:
About the Author
Chris Dyer is a Market Research Analyst for Freedonia Focus Reports. He holds a Master of Arts in Security Studies, and his experience as an analyst covers multiple industries.