Rebuilding Place in the Urban Space

"A community’s physical form, rather than its land uses, is its most intrinsic and enduring characteristic." [Katz, EPA] This blog focuses on place and placemaking and all that makes it work--historic preservation, urban design, transportation, asset-based community development, arts & cultural development, commercial district revitalization, tourism & destination development, and quality of life advocacy--along with doses of civic engagement and good governance watchdogging.

Saturday, July 20, 2019

Private capital not a reliable "partner" in sustainable mobility when it comes to affordability

A Jump bicycle sharing bicycle in BrooklandWhen the Jump dockless e-bike program was introduced, in DC and a handful of other cities, comparatively speaking it was a good deal, $2 for 30 minutes, with a per minute charge after 30 minutes.

Last year the firm was purchased by Uber.

This past week they introduced new pricing, which varies by market ("Uber says it's raising prices on its dockless e-bike fleet in several US cities," Business Insider). From the article:
"We want to build a viable e-bike and e-scooter operation that allows us to serve riders for years to come," an Uber representative said in an emailed statement.

"To support that we have introduced new pricing in our cities that brings us in line with the market so we can continue to deliver clean and reliable bikes and scooters with a sustainable business model."
In Providence, where the rate is now 30¢/minute, that 30 minute ride now costs $9. The LA prices is also 30¢/minute. In Denver, 25¢/minute. To find the rate by city, you need the app, which I don't have.

That pricing probably makes it not sustainable from the standpoint of a user, although they do have a $5/month rate for low income users. Otherwise, these prices are higher cost than bus rides, but faster, and comparable or more expensive than subway and light rail trips.

This shouldn't be a surprise. If providing bikes or transit or taxi service was super profitable, then cities or people with limited job prospects wouldn't be doing it.

I think it's important to have bike sharing, even the option of scooters, and definitely transit. I'm just not expecting that venture capital will be in it for the long term.

Abandoned bike share bicycles in China.  Getty Images photo.

cf. Ofo ("Bike-sharing firm Ofo's dramatic fall from grace a warning to China's tech industry," South China Morning Post) and Mobike ("The rise and fall of China's cycling empires," Foreign Policy).

... I have an Ofo bike in my garage if you want it.

2. And besides adding e-bikes to traditional bike share programs, it would be awesome if the US had a similar program of payroll deductions for buying bikes for transportational uses, comparable to the UK.

This is important, because unlike how scooters and ride hailing and pedal bike share mostly merely capture trips that likely would have been made by transit, e-bikes do have the potential to shift trips from cars ("E-Bikes Mean Fewer Car Trips and More People on Bikes," Bicycling Magazine

 Although such requires massive market development. But employer transportation demand management programs providing purchase supports could begin to change the equation.

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At 11:38 AM, Anonymous charlie said...

from FT:

Also Uber is moving towards an amazon prime model -- 25 a month for free food delivery, free bike+scooter, and a reduced car rate.

At 12:47 PM, Anonymous Richard Layman said...

Had I known that I would have written a different piece. Thanks

At 1:24 PM, Anonymous charlie said...

your piece still works out; what those companies want is scale! amazon! more VC money to scale! and have few to no incentives to continue to provide affordable last mile solutions.

There was another piece on how this model in China (ofo) has completely collapsed in the past 2 years once liquidity started to retreat.

Just more explicit on how they view themselves -- the amazon of transport doesn't mean uber will provide the the a to z of transport but rather wants a amazon prime subscription model.

At 9:48 AM, Anonymous Richard Layman said...

I've written about "subscription models" a lot. There was the one in Helsinki that got lots of press, but then collapsed. Via has a subscription model, which includes access to LimeBike (I don't know about scooter).

CityMapper in the UK actually has a subscription model that favors the subscriber compared to London Underground pass pricing -- it's the only subscriber model I've seen that "costs less" than the subscriber doing his/her own thing. (I thought I wrote about this but I can't find an entry.)

But CityMapper acknowledges that they are subsidizing it, hoping to come up with other ways to make money

Lots of people want convenience, so they see subscription as a benefit, they'd rather have the subscription than self-connect the pieces.

But we know from other such subscription models that mostly people don't use as much service as they pay for.

... bike share is an exception. It's priced to be convenient, not to pay off the cost of running the system. OTOH, in Medellin, they build in bike share access to their transit pass for no extra charge, to facilitate first mile/last mile connections.

last year or the year before when I wrote the piece, "I finally figured out all the various acquisitions" thing, realizing they were buying customers.

The problem is that there are only so many "customers" for sustainable mobility. And the business model isn't there for extranormal profit.

So eventually a lot of these things are gonna end up like ofo. And that may well include uber.

UberEats takes upwards of 40% of the transaction. That's not sustainable for restaurants.


Basically everything is about cannibalism.

Uber's "brilliance" was creating the app. It's sort of revolutionary in that it makes getting "a cab" easy, you don't have to worry about hailing, and it integrates payment. And it isn't market specific, you can use it wherever Uber operates.

That becomes a platform by making one national market for "taxis."

And now the app extends the platform by adding restaurant delivery, scooter/bikes, etc.

But that doesn't mean even with the app that there is enough margin. Unlike Amazon Prime.

(I understand platforms. I actually tried to create one in the early 1990s for a nutrition software program and system when I worked for CSPI. I wanted to license cookbooks, etc. I was ahead of my time once again. Not that this particular platform had legs, looking at it with hindsight. But of course, they didn't understand it, just as it took them 6 years after I left to launch a Canadian edition that I proposed, which they make $2-$3 million/year from, and they never did the "13th issue" annual calendar which could have been $6+ million/year in annual gross revenue.)

At 9:54 AM, Anonymous Richard Layman said...

Really good distinction between A-Z of transport and creating the Amazon Prime _platform_ of transportation.

... that's what TfL or the VVs do, excepting taxis. And it's not like they are making lots of extra money.

E.g., Tesla. At the end of the day, the margin on an automobile isn't much different no matter who manufactures it, especially as your legacy costs of employment rise (insurance, pension).

He can create a one million vehicle ride hailing fleet, but there isn't that much demand for those kinds of trips, unless they are priced below cost.

People who live in automobile centric places won't find ride hailing to be cheaper than owning, even if the vehicles are autonomous.

In the core, you'll have to add big per trip taxes/surcharges, because you want to discourage single occupant vehicle trips.

AVs have some advantages in doing my tertiary network stuff, now called microtransit by most. But again, that doesn't have a lot of extranormal revenue potential.

Microtransit's been around long before Uber or Via, it just hasn't been well defined and integrated in a systematic way into transit planning. (Other than my primary, secondary, tertiary framework across metropolitan, suburban and center city scales.)

At 9:56 AM, Anonymous Richard Layman said...

Vienna is offering an annual transit pass (don't know if it includes bikeshare and it definitely doesn't include taxi rides) for the equivalent of 1 euro per day.

At 365 euros/year, an Uber platform isn't going to make money.

At 5:13 PM, Anonymous charlie said...

They do spend a lot of time to make it look seamless, and they also very much (at the start) made it look like a perfect seamless market as well. Very appealing to a certain set. (much like google ad words being a perfect market)

I did enjoy having new cars for a while on uber. I got one last weekend and it was a barely legal camry with no AC. Back to DC cab!

At 8:19 AM, Anonymous Richard Layman said...

I mention the ward 4 meeting on zoning and the rooming house question too often, but I suppose the "barely legal Camry with no AX" is the kind of reversion to the mean that should be expected when the drivers don't really make all that much money.

Thanks for the cite. It mentions Postmates subs, $10/mo., but you only get free meal delivery. To me, I think having unlimited rides on the Jump bikes would be worth it, if I also did the meals. (I pretty much refuse to use ride hailing but that's me.) I wonder how much the discount is on the ride.

My sense is that people like you are outliers in that you use scooters, e-bkes?, and Uber.

Most ride hailing users I've come across aren't into bikes/scooters.

But ride discounts + free meal delivery I can see being worthwhile, at least for awhile.

2. The CityMapper pass is "cheaper" than the capping -- 7 pounds/day for tube, 5 pounds/day for bus -- and slightly cheaper than (4 pounds) from the regular pass product.

In the premium pass product they add bike share, but it's cheaper to get your own pass, rather than pay the weekly upcharge. But since I last looked at it, it includes a 10 pound/week cab credit too.

" aims to sign up micro-mobility providers, allowing subscribers access to bike and scooter platforms, as well as cabs, ride-shares and rental cars. Rather than register for each individual service, everything could be paid for via your Citymapper card or included in your Pass subscription."

I guess I just figure at the end, it may go the way of the Helsinki thing.

Right now they provide a bundled product, but they pay TfL per ride, and I don't think they get the bulk discount of a Travelcard, but probably capping.

Still, it's interesting that TfL has the capability to integrate third party cards into their system.

At 9:22 AM, Anonymous Richard Layman said...

In SoCal, counties like Orange and San Diego run toll roads. But also there is a separate agency called the Transportation Corridor Agency which runs some toll roads in OC too. Probably they were the original creators of toll roads before the county transportation agency got involved.

Anyway, they've just redone their pricing and have eliminated a discount per trip for transponder users. Instead, they've put discounts on trips for high volume users, spending at least $40/mo.

At 11:18 AM, Anonymous charlie said...

somewhat on topic:

In terms of your original post, their business model (buy users) does NOT fit into what sustainable last mile transport needs and just throwing 10,000 scooters into DC isn't going to work.

You can try and force things into the agreement but the default is just avoid it.

At 5:47 PM, Anonymous Richard Layman said...

If scooters remain an element in urban transportation, it's going to happen by integrating them into the existing dock-based systems.

Within that you can create a locking system like how the B Cycle program has locks for use between docking systems, so people can still use them and park them more freely, but properly.

At the same time, I'd add a trip upcharge for each non-dock locking.

But cities will have to agree it's an important addition and be willing to provide some subsidy, just as CaBi and other systems are subsidized.

I imagine, NYC will have to put money into Citibike over time. In any case, only a couple cities in North America have the ability to have "free systems". NYC because of Citibank. And SF because Ford wants to brand itself as cool to the Silicon Valley workforce.


I am fine with their being e-scooters and e-bikes as options for people, obviously, but I just don't see it as something that the private sector can make extranormal returns at, and making less than normal returns isn't a business model that is attractive.

not exactly analogous, is how nonprofit car share firms often sold to a for profit, once they needed to invest in car replacement of their original fleet.

There is still one in SF, and in Montreal. The Chicago and Philly ones were bought by Enterprise. Although Enterprise dropped Chicago after awhile due to vandalism.


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