Tuesday 27th October 2020

Cool IoT Use Cases: Small towns get a bike-share system

Published on April 29th, 2019

Market overview

Bicycle-sharing schemes have been a global success story, particularly in large cities where air pollution has become a serious health issue.

However, take-up has been slow in small towns, which have been losing population for decades and which are trying to get millennials to stay in their town or encourage them to move back. Developing the requisite infrastructure for bike sharing is an effective way of realising that objective.

The problem

The price per ride is the problem. The regular business model is based on making money per bike rental and that doesn’t work well because there are not enough rides to make it viable. That was the situation in Pocahontas, Iowa, whose population is a mere 1,700.

The players

The Pocahontas Chamber of Commerce and Koloni, a company that offers an ecosystem of shareable products ranging from bikes and scooters, to recreation equipment for parks. These products are designed to improve the health of communities.

The solution

Instead of relying primarily on making money per bike rental, Koloni charges communities a monthly fee for bikes that have smart locks, which allows them to be parked. The monthly fee is $35 (€31.3) per device plus a small transaction fee.

The business model makes it financially sustainable for the bike-share company to stay in a community. The cost is also low compared to some competitors, which can charge as much as $5,000 (€4481) a bike in start-up costs. Communities can choose their own price to charge users for the use of the bikes, which can be unlocked through a smartphone app.

Business benefits

  • Viable business model, for both communities and cyclists
  • Reduces air pollution
  • Encourages local shopping

The column is written by freelance technology writer, Bob Emmerson.

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