Is bikeshare good or bad for bike shop business?


A Capital Bikeshare bicyclist rides on a bike lane in Washington, D.C., U.S., on Monday, Dec. 3, 2012. (Andrew Harrer/Bloomberg)

Anecdotally, bike shops in New York City say they've been losing business since the rollout last summer of the city's bikeshare system. Bloomberg News interviewed several shop owners last week who reported that their sales have dropped, as have revenue on repairs, particularly at stores in Manhattan surrounded by the iconic blue Citi Bike docking stations.

Writer James Tarmy calls this the "perverse byproduct" of Citi Bike's popularity: "The very institutions that should be riding the success of a newly bike-friendly city are getting doored by it instead," he writes. "For the neighborhood bike shop, declining sales are an unintended consequence of a program that most people seem to love."

And yet, bike shops in Washington have described the opposite since Capital Bikeshare launched here in 2010. And transportation officials report -- this is anecdotal again -- that the system seems to have created new casual users who graduate into buying their own bikes.

So which is it? Is a public bike a substitute for buying your own? Or does this infrastructure create new customers and spillover effects for private businesses that benefit when an entire city becomes more bike-friendly?

There is some fledgling research on the impact of bikeshare on other kinds of private businesses. Researchers from Virginia Tech released a survey earlier this year showing that one in five neighborhood businesses located near a Capital Bikeshare stand -- including restaurants and retail -- believed that the nearby presence of bikeshare had helped their sales. (There's also some interesting research out of the Oregon Transportation Research and Education Consortium suggesting that cyclists in general can out-spend drivers in the long run at bars, restaurants and convenience stores because, while they spend less per trip, they tend to pop into these places more often.)

I'm unaware of data that more directly looks at the impact of bikeshare on bike shops (if you've got it, please let me know). But here are a couple of things to consider about New York. The system is young. If residents who haven't been on a bike since they were kids try Citi Bike, grow comfortable cycling in the city, then come to conclude they want a less clunky bike of their own -- this is the operating theory -- that's a story that may take more time to play out in real numbers. New York also had some particularly terrible biking weather this past year. It caused Citi Bike to have a disappointing first winter. Perhaps it depressed business for bike stores, too.

But while we wait for better data and more time to pass, in New York and elsewhere, we can think through some of the implications of bikeshare for the behavior of people who use it. For a subset of users, bikeshare poses potential competition not for bike retailers, but bike rental shops (although they are sometimes one and the same).


Citi Bike users pedal through the streets of Manhattan on March 21, 2014 in New York City. (Photo by John Moore/Getty Images)

Setting aside your annual bikeshare members, tourists can pay higher rates to use the system for a day or a week in many cities. The way the fees are usually structured, though, this only makes sense for a tourist who wants to take many short trips around town (say from one museum to the next). If you want to spend an entire afternoon joy-riding around Central Park, or all the way down the Potomac, you'll probably spend less money renting a bike from a shop for several hours than pulling it out of a bikeshare dock.

You can also rent a much nicer bike from a bike shop. This is one of the reasons why business has reportedly gone up for rental shops in Minneapolis, thanks to the Nice Ride bikeshare system there. The opposite, though, has happened (anecdotally) to rental shops in Miami Beach.

The bigger question here, though, is not about tourists. They wouldn't make for repeat customers in bike shops anyway. The real question is whether, among regular users, bikeshare complements personal bikes or replaces the need for them.

At the level of an individual ride, hopping on a bikeshare doesn't harm my local bike shop in the same way that it might mean a direct lost fare to the subway. That individual ride could hurt a local bike shop about as much as it hurts a local car dealer.

That's because the nature of bike-shop business is built on large single purchases (with occasional accessories and tune-up). If I buy a Cannondale, it doesn't much matter to the guy who sold it to me what I do with it once I walk out of his store. His bottom line is essentially unchanged whether I use that Cannondale seven days a week, or only on the weekends because I take bikeshare to work.

My bike shop isn't harmed, in other words, if I do both -- if I have a personal bike and a bikeshare membership. And there are many reasons why I would want both. Bikeshare bikes are heavy and slow. They're meant for short distances and brief time periods. My office is 3.3 miles from my home. That's just too long -- by a hair -- for me to comfortably ride on a bikeshare most days. And so I often ride my personal bike. Occasionally, though, I have to take the train for various reasons. And I'll use a bikeshare to get home from the station. Or I'll use a bikeshare if I don't want to worry about locking up my bike.

The complementary effect of bikeshare lies in the fact that these bikes are both convenient and intentionally imperfect. They're good when I want to ride a mile. But they're too expensive and clunky for five miles. They're easy to use when I find one. But they're not always easy to find. They're accessible enough that novices will hop on board. But their limitations are such that many people who regularly use them will come over time to covet something faster, more reliable, a bike you don't have to share.

Obviously, this will not be true for everyone. A bikeshare membership could plausibly serve the entirety of cycling needs for many people, crowding out the demand for a personal bike. But for others, this is how systems that loan bikes create demand for stores that sell them.

In all kinds of other ways, using a product or a service induces us to want our own. Maybe watching a big-screen TV in a sports bar makes you want one in your own living room. Same with a computer in a library, or one of those fancy blenders in a juice bar.

In New York, Washington and Chicago, new bikeshare systems have been accompanied by miles and miles of new bike infrastructure, and those amenities only compound this effect. If New York isn't seeing it yet, it's possible the city needs a little more time.

Emily Badger is a reporter for Wonkblog covering urban policy. She was previously a staff writer at The Atlantic Cities.
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