The Ride to Growth: Bike Sharing and Customer Experience

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Crystal Romero

Content Marketing Manager
March 22, 2018

Technology has spurred yet another hot transportation disruptor–the bike share industry. The global bike share market is estimated to grow at a CAGR of 2.7% from 2017-2022 and will be worth $34.9 billion. In 2016 alone, there were 28 million bike share trips in the U.S. which is equal to the annual amount of ridership of the entire Amtrak system!

Although the bike sharing system originated in Europe in the 60’s as a free public service  for city dwellers, the bike sharing economy really began to explode with the emergence of technology in 2000.

People in the Seat

Although there is a wide age range of riders, the majority of them are millennials (shocker). Bike share programs are popping up all over the world in North and South America, Europe, and China as a means to embrace transportation flexibility, empower mobility, reduce vehicle emissions, and provide health benefits.

The biggest and most popular programs are in China, France, New York, Spain, and Canada. China tops the charts as being known as the “Kingdom of Bicycles” with 78,000 bikes across 2,700 stations, with France and England coming in second with up to 20,000 bikes and 750 stations, and New York with 6,000 bikes and 330 stations. In the US, the number of riders has grown 10x in just the last five years from 2.3 million to 28 million rides per year. And, a turf battle is brewing with fierce market competition; 100 US cities now have bike share programs operated by 5 of the most top-rated private companies.

Investors worldwide see the bike share industry as the next Uber of transportation and are putting their money where their mouth is by investing billions of dollars in private companies. Some of the top bike share companies are OFO, Spin, and Jump D.C.

Shift Happens

The bike share industry model began with cities deploying these bikes as a civil service that was powered by private companies. Cities would hire these companies to be responsible for the supply, maintenance, and payment transactions. An example of this is Citi Bikes in New York City. Citibank sponsored the bike program and worked with New York City to obtain the necessary permits and space to setup their bike rental hubs. The service was ultimately provided by a private company, but with Citibank branding.

However, this model is shifting due to the advancement of GPS and digital lock technology for bikes. This is a great development for riders but there are challenges emerging for the industry.

Four Challenges On The Road to Growth

City regulations (or lack thereof) – With the shift towards technical advancements in bike sharing programs, dockless biking stations are on the rise. City regulations and laws are struggling to keep up with the pace of technology innovation much like its experience with other transportation disruptors like Uber and Lyft. Private bike share companies are deploying their bikes into cities without extensive collaboration, or even permission from the local governments. Since these bikes are dockless, they can be left anywhere when the rider is done using it which provides them with great autonomy, but is a nightmare for local governments because there are thousands of bikes and scooters littering their city.  This is also connected to a more serious issue of bodily harm, or death for riders since no helmets are provided in addition to the fact that some urban cities, like Seattle, are not fully architected with bike riders in mind.

Source: National Association of City Transportation Officials (NACTO)

In the beginning of 2014, the slow rise of smart bikes began to tip the scale in comparison to docked stations and as we moved in to 2016, it steadily increased as bike shares started to depend more on advanced technology.

Under-supported customer service – As the bike share industry rapidly increases in the number of rider accounts, issues with unlocking bikes, accidents, and billing queries are spiking. Unfortunately, capital investments are often spent on other growth initiatives and customer service doesn’t take priority, which leads to downstream issues quickly. If customers don’t get their issues resolved immediately, they’ll hop on a competitor’s bike or become disillusioned with the perceived “ease” of bike share all together.  

Identifying customer demand for support worldwide – Correlated to the second challenge,  bike share companies are struggling to find ways to support different customer service needs across different geographies and customer preferences. For example, with Uber, they originally only offered email support in all of their markets, but after paying attention to customer demand and recognizing a need for more immediate service, they also included phone and in-app support. No technology is perfect, which is why every bike share company should be armed with diverse ways to provide customer service. Waiting for an email response, or being placed on hold for long periods of time poses challenges to providing the right type of customer support for certain types of issues.

Building a community (it takes a village to raise a bike share)- Like any successful company, bike shares need to find ways to reward riders for being great customers so they won’t take the ride elsewhere. But along with carrots, also comes the stick which is where the fourth challenge rises. Since bike share companies don’t have reps patrolling the streets to ensure proper ridership, they have to depend on the community to rally around the company in keeping the bike share system accessible and safe. However, disciplinary actions for riders who are recklessly riding or are in other violations can be a double edged sword because the actions taken against riders may upset the whole riding community. This is especially sensitive because bike share companies are venture backed and are not yet profitable so losing customers is not an option as the cost of customer acquisition is an expensive thing to bear. Although some companies like Mobike are experimenting with scoring systems  where riders police one another and receive or lose points when they abide or break rules, the effect on the community has yet to be seen.

 

The Last Mile to Transportation Disruption

Just like the transportation disruptors before them who changed both the auto ownership and rental industry, bike sharing companies are providing travelers with the means to get to their final destination instead of using traditional forms of transportation like trains, taxis, trolleys, or ride shares. Although the industry is not freed of its growth challenges, their services provide exceptional world class customer service for both global travelers and local commuters.

Curious to learn how we worked with one of the world’s leading transportation disruptors to dramatically improve their CSAT? Check out the details here.

Are you looking to disrupt your transportation service with ridiculously good customer experience? Contact me.