A Blog by Jonathan Low


Mar 4, 2018

Bikes Have Become High Stakes Capitalism - But How Long Before They Own Themselves?

Could blockchain, GPS and self-locking data management systems make bike ownership independent? JL

The Economist reports:

The “smart contracts” blockchains allow—agreements that can monitor the fulfilment or breach of any conditions they stipulate—could create self-managing fleets of bikes.
THE first bicycles were freed on July 28th, 1965. On the previous night Provo, a Dutch anarchist group, had put up flyers proclaiming that “the asphalt terror of the motorised bourgeoisie has lasted long enough”. A few dozen people had gathered at the bottom of the Spui, in central Amsterdam, along with some reporters. There were also some police; they thought the Provos were troublemakers.
Roel van Duijn and Luud Schimmelpennink started painting three black bicycles white. “The white bicycle is the first free communal transport,” as their flyer put it. Once so transfigured, the bikes would simply be left on the streets; to make them free for all to use, the flyer said, “the white bicycle is never locked.” And that, it turned out, was a problem. After they were let loose on the streets, the white bikes were impounded by the police. A 1928 statute, they pointed out, required bikes to have locks. Ownership was not optional.
A few days later, at a street meeting where Mr Van Duijn was painting another bike white, the police ordered him to stop, and the crowd to disperse. Mr Van Duijn stood his ground. A policeman whacked him with a truncheon. That made the white bikes something of a cause célèbre. More people joined the movement; more bikes were painted. But the police kept impounding them.
Half a century later the streets of Beijing are full of bikes which are not white, but yellow, or orange and silver, or some other striking colour. These bikes are not public, but private, and they are equipped with cunning locks. But they are still, in their way, taking forward Provo’s dream.
The yellow bikes are from Ofo, so named because the letters look like a stick figure riding a cycle. The system started off a few years ago as a voluntary bike-sharing scheme on the campus of Peking University in Beijing. Today it claims to operate 10m cycles in some 200 cities worldwide. Mobike, its orange-and-silver rival, says it has deployed 7m of its bikes in China and abroad. Between them, they say, they are responsible for around 60m bike rides every day. Zhang Yanqi, Ofo’s operations boss, thinks China alone could support 300m rides a day.
The difference between these bikes and those in most of the public bike-sharing schemes familiar in cities around the world is that they do not have to be stuck into special docks at the end of the trip. Like the original white bikes they can be left wherever you like, and used wherever you find one. Unlike the white bikes, they do have locks. But now it is possible for Ofo and Mobike to give everyone keys, and charge them for their use.
If you have the right app, you just point your phone’s camera at the QR code printed on the bike you want to use. The system unlocks it, gives you a half-hour ride and charges you one yuan ($0.15). That’s easily enough for most people: most trips on such bikes in Beijing are very short (see map). When you are through, just leave it. Soon enough another user will ride it away. If one doesn’t, someone will be offered an incentive to go and get it.
Whether this model can work on the vast and global scale that Ofo and Mobike envision is not yet clear; that it is beyond anything Provo dreamed of is clear. The difference is the product of a half-century of progress, shaped by politics, commerce, technology and design, that has seen bike sharing become commonplace across the world.
In some ways little has changed. Cities are still car-dominated, still congested, still polluted. But the spread of bike sharing has made millions of lives a bit easier and a bit better. And it resonates with other changes in the world today. In more and more realms of life the convenient ad hoc access provided by digital systems is taking the place of the assured access once offered by personal ownership. Streaming beats records; the cloud beats the hard disk; credit beats cash.
Bicycle thieves
For much of the 20th century, owning your first bicycle was a definitive rite of passage. Before smartphones, that bike was typically both the most valuable and most liberating piece of property a child might own. It was also a peculiarly vulnerable one.
Official figures tend to downplay bike theft; typically perhaps one such crime in five gets reported to the police. If that is so, roughly 1.5m bicycles are stolen in America every year. A recent study in Montreal found that half of all cyclists have had bicycles stolen. This is in part because stealing bicycles piecemeal is oddly easy; the loot itself provides the getaway.
Given that such thefts are typically discovered exactly when the bike is needed, the crime is an urgently irksome one—and one which plays a significant part in stopping people from cycling, or giving the pastime up. According to that Montreal study 7% of victims never replace their bikes at all. Your correspondent vividly remembers both the thrill of getting a brand new BMX for his 13th birthday and the heartache of having it stolen 11 days later. It was well over a decade before he owned another bike.
Such thefts are not just privations; they are temptations. In Vittorio De Sica’s neorealist classic, “Bicycle Thieves” (1948), the bike that a working-class man depends on for his livelihood is stolen. In a moment of weakness, he tries to steal another bike, and is humiliated in front of his son. “Beijing Bicycle” (2001), directed by Wang Xiaoshuai, told a similar story; an upwardly mobile striver tries lifting a bike after his own goes missing. He is dragged off to the police station.
One of the fundamental attractions of shared bikes is that they breach such chains of theft and temptation. There will always be a bike when you need it, regardless: no property, no theft. That was the insight which, in 1989, led Ole Wessung to reinvent Provo’s idea. Standing in front of the empty space on a Copenhagen pavement where his bike should have been, he found himself considering taking someone else’s cycle to replace it. It was the fifth bike he had had stolen in three months. Instead, he walked home turning over a new idea in his mind. Maybe insurance companies could be persuaded to sponsor a free-bike scheme so that they would not have to pay out for as many thefts.
They couldn’t. But, slowly, the city authorities were. The “Bycyklen” scheme, as it was called, took until 1995 to get rolling (Mr Schimmelpennink, whose post-Provo attempts to get Dutch politicians to buy into bike-sharing had met with little success, was a consultant on the project). When it did, its success had three crucial elements. The first was official involvement. Where the Provos worked in opposition to the city council, Bycyklen had the support of not just the Copenhagen municipality but the ministries of tourism, environment and culture as well.
Second, Bycyklen recognised that a bike is a canvas for commerce. It roped in corporate sponsors, including Coca-Cola and the Danish Girl Scouts, to advertise on the bikes. Last, and perhaps most important, the bikes were specially designed to be less attractive to thieves. Their parts would not fit on a standard bike. They were also rather ugly.
The bikes were free, but had a rudimentary deposit system modelled on supermarket trolleys. Riders inserted a 20 kroner ($3) coin to unlock a bike from one of the stands where they were housed; they got it back when they docked it at another. This was not much of a deterrent to abuse. Upon first encountering the bikes in 2005, your correspondent rode one far outside its designated zone and lugged it up four flights of stairs before, confronted by his mortified host, he took it back down again and abandoned it on a grassy verge.
Despite such deviant behaviour by a feckless few, Bycyklen was something of a success. Bike thefts fell from 27,000 in 1989, when Mr Wessung conceived of his plan, to just under 18,000 in 1997, two years after the scheme got going. The ugly bikes stayed on Copenhagen’s streets until 2012, when the city replaced the old clunkers with a fleet of spiffy e-bikes.
Bycyklen inspired a handful of similar efforts. But the trend was slow to grow. Amid some successes (by the mid-2000s many German cities had such schemes) there were many let-downs. Failure often came from not making the bikes sufficiently unattractive and thus providing a resource for thieves, rather than an alternative to stealing. The “green bike” scheme started in Cambridge, England’s most cycling-friendly city, in 1993 had most of its bikes nicked by the end of the first weekend. In Portland, Oregon in 1994 two friends, inspired by a passage about Provo’s white bikes in a documentary, gathered some bicycles and painted them yellow. The bikes quickly vanished. They put more on the street. More disappeared. Other cities tried, too: Spokane (purple), Madison (red), Boulder (green), Tampa (orange), Minneapolis (yellow), Fresno (yellow). All failed, writes Peter Jordan in his book, “In the City of Bikes”, which tells the story of cycling in Amsterdam and elsewhere.
What was needed was a high-profile, well-designed scheme big enough to weather endemic larceny and mounted by someone determined to make a go of it. That was what Paris provided in 2007, when on the day after Bastille Day Bertrand Delanoë, the mayor, inaugurated Vélib. Not everyone thought this wise. “Paris n’est pas Amsterdam,” Le Monde, a newspaper, had sniffed the day before. This turned out to be true, but not the way the paper meant it. Where Amsterdam’s first scheme had failed, Vélib was a triumph.
That was in part because Mr Delanoë did not just want to convert existing cycle owners into cycle sharers; he wanted more people cycling. Paris had added 261km of bike lanes between 2001 and 2007. “They were rebuilding the city to be friendlier to bikes...at a massive scale and rapid speed,” says Kate Fillin-Yeh of America’s National Association of City Transportation Officials. Bike-sharing works best when matched with a good infrastructure network, she says: call it a virtuous cycle.
Holding back the gears
Mr Delanoë had also learned from Copenhagen. Instead of spending city money, the mayor offered 1,628 outdoor-advertising spaces to JC Decaux, an advertising company which had experience with a similar, but much smaller, scheme in Lyon, if it would operate the scheme. Unlike Copenhagen’s the system was not free; but it was cheap, and credit cards and electronic docking stands made it convenient. New embedded sensors made the bikes easier to track and helped identify patterns of use.
None of this stopped enterprising thieves; 3,000 bikes were stolen in the first year alone, far more than expected. But that did not stop citizens and tourists alike clocking up 27.5m rides over the same period. Cities around the world—including London—decided the idea’s time had come. “Paris is a city people pay attention to in a way they don’t to Lyon,” says Ms Fillin-Yeh. In the 12 years before Vélib some 75 bike-share schemes were set up. In the ten years since nearly 1,600 have come on line, according to a database maintained by Russell Meddin of bikesharingmap.com (see chart).
For all this eventual success, bike-sharing has done little to curtail the “asphalt terror of the motorised bourgeoisie”, as Provo had promised. Bike-sharing rides typically replace journeys made on foot or using public transport, not journeys in cars. Resources for the Future, a think-tank, found that the system in Washington, DC has had only a “marginal impact” on congestion. That said, the think-tank reckons that the 4% drop in congestion it found saves $182m a year in shorter travel times and less need to buy fuel.
Health benefits are harder to quantify, especially in smoggy cities like Beijing. Mobike has found that its bikes are used more or less as much when the air is really bad as when it is not, suggesting that the good done by exercise may be undone by heavy breathing in toxic air. But in less-polluted cities the gains from exercise are larger than the risks from road accidents or air pollution, according to a study of Barcelona in the British Medical Journal.
Back on the chain gang
As for ownership, the rise of Mobike and Ofo suggests, at the moment, that it is venture capitalists (or, eventually, shareholders) who will own the urban bicycles of the future. Public bike-share systems, even with the generous support of advertisers, have rarely been able to cover all their costs. But executives at both Ofo and Mobike insist that their smartphone-based dockless business models are sound. If they stopped expanding tomorrow, they say, their balance sheets would be a sea of black.
As it is, both give away free rides to attract and retain riders and are engaged in a bloody war for market share. Their investors are keen for them to merge. Analysts from Hong Kong to New York are sceptical they can make money selling rides for 1 yuan even as the companies insist that they can. But they could in time add to their revenues by turning their bike networks into data generators, creating a new way of defining the city’s pulse (see map of London). Digital companies already know a lot about online behaviour; bikes help them track off-line behaviour, too. Bike pick-up and drop-off data can show which shops and cafés are most popular—and whether online ads have had any effect on off-line behaviour.

London bike-sharing trips on weekdays

Mobikesaysitdoesnotshare data commercially. But it is working with think-tanks, universities, research institutes and the World Bank to put bikes and the information they provide about their users and environment at the service of bettercityplanning.Suchsystemscouldyetcutemissionsandcongestionandmaketheworld’scitiesmorepleasantplacestolive.
Dockless bike-share schemes, however, bring with them a new and unprecedented problem: bicycles so numerous that even theft cannot keep the streets clean of them. The things pile up in parks, courtyards, alleyways and any available open space, often dumped carelessly on top of each other, sometimes making it difficult for pedestrians to walk down a street unimpeded. At least seven major Chinese cities have stopped allowing any new shared bikes on their streets. In August Wandsworth, a London borough, seized dozens of bikes dumped on its streets by oBike, a Singaporean firm. Singapore itself impounded 135 bikes earlier this summer. Amsterdam, true to form (and with such high bike-ownership rates that it sees no need to promote yet more bicycling) has banned dockless bike-share.
Still, some in the Netherlands still dream of making bikes ever more free—creating a system in which bikes are not owned by people, or cities, or by companies using them as data-sources, but by themselves. Marcel Schouwenaar, a Dutch designer, has a plan called Fairbike which gives bikes blockchains. Blockchains, the software innovation that makes cryptocurrencies possible, are distributed ledgers which keep untamperable records of actions and transactions. Mr Schouwenaar thinks that the “smart contracts” blockchains allow—agreements that can monitor the fulfilment or breach of any conditions they stipulate—could create self-managing fleets of bikes.
Using Fairbike would be like using Mobike. But instead of passing on your money to a central organisation, the bikes would hold on to it. Once a community set such a system up it would pay for its own maintenance—and, when enough funds had been collected, new bikes. Systems used a lot could thus both heal their wear and tear and increase their population. The repair jobs and new bike orders would be assigned on a lottery basis to registered bike shops. Theft would finally become impossible, at least technically; wherever a Fairbike was taken it would still own itself. There would, however, be a certain loss of access.
Mr Schouwenaar hopes to pilot Fairbike next summer in Rotterdam, friendlier to such schemes than Amsterdam. But he respects the idea’s heritage. “We try to get very close to the original Provo bikes in Amsterdam,” he says. The idea is to bring together the idealism and bottom-up approach of the Dutch anarchists and the technological advances of the Chinese mega-firms. Bicycles of the world: unite! You have everything to gain from your blockchains!


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