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Is greater regulation required for bike-sharing?

A report from IESE Business School examined the economic performance of bike-sharing initiatives across 13 cities in Europe as well as emerging potential challenges.

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The research report from IESE Business School found that, overall, bike-share is profitable
The research report from IESE Business School found that, overall, bike-share is profitable

Greater regulation via government intervention may be necessary in the future for bike-sharing schemes to fully realise their economic and social impact, a new study suggests.

 

The report from IESE Business School examined the economic performance of bike-sharing initiatives across 13 cities in Europe as well as emerging potential challenges.

 

Overall profitable

 

Overall, the research found that bike-sharing programmes are profitable, generating between 1.32 to 1.72 Euros of value per 1 Euro spent (this includes savings to public healthcare systems).

 

Among the direct economic impact benefits of bike-sharing identified in the report are:

  • Direct job creation – programmes meant approximately 3,400 jobs created in the cities analysed
  • Positive economic impact in related industries (increased sales, jobs)
  • Increased demand in households benefitting from job creation
  • Health benefits – increasing physical activity and shifting traffic patterns (traffic mortality risk and increased exposure to air pollution are discounted from the positive health outcomes). The authors found that bike-sharing systems prevented more than 90 premature deaths between 2014-16 (0.12 per cent of the estimated number of deaths of people under 65).

However, the report cautions that, chiefly, it is only through a comprehensive public approach that bike-sharing schemes can become truly profitable. This is because, for example, healthcare savings, can only be incorporated when looking at the impact at a societal level.

 

These benefits might not be so apparent for private companies, it states.

 

The introduction of the new dockless model has also meant an increase in the number of private companies entering the bike-sharing market. While these “free-floating” solutions present many advantages, the report warned that they can be counterproductive, if not regulated properly.

“Public-private collaboration seems unavoidable to neutralise the negative effects of non-institutional dockless operators”

For instance, they can cause mass saturation of public spaces as well as pose unfair competition to publicly funded schemes which need to adhere to stricter regulation. There also can be a lack of accountability as a result of the current lack of communication between non-institutional dockless companies and public administrations.

 

To tackle these challenges, the report authors suggest that more regulation may be necessary in the future. The study notes that some cities are already leading the way in this respect. In London, for instance, a code of practice has been introduced to control and benefit from the expansion of bike-sharing operators throughout the UK capital’s boroughs.

 

Other measures suggested in the report include:

  • A licensing system limiting the number of dockless bicycles and to promote fair competition
  • Introduction of a clear regulatory framework and a code of practice
  • Enhancing the collaboration between public and private agents.

“Public-private collaboration seems unavoidable to neutralise the negative effects of non-institutional dockless operators,” said Joan Enric Ricart, professor of strategic management department, IESE Business School, and co-author of the report.

 

“Therefore, effective engagement policies between the two players could be recommended for both parties. A benefit for the private side would be that a clear regulatory framework and the ability to exchange opinions with the public sector could reduce the uncertainty it could face.”

 

The cities examined in the report are London, Berlin, Madrid, Paris, Hamburg, Vienna, Barcelona, Milan, Copenhagen, Cologne, Turin, Bilbao and San Sebastian.

 

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