There's not like the same excitement over the e-bike as there was for like this app that lets you hail a taxi instantly. And that's something that I don't really know how to reconcile.
SPEAKER_00Hello and welcome to podcasts. I can't wait for Uber to go back. I hope that's a good thing. Patreon.com. Technology US. Thanks so much for the conversations. Aaron Gordon, welcome to TechWorth Save Us. Thank you for having us. Fantastic speaker today. So obviously I wanted to talk because we wrote this fantastic piece for Motherboard recently called how Uber turned a promiting bike share company into literal garbage. The story really focuses on a company called Social Bicycles, which later became Jump Bikes and was acquired by Uber and kind of tells the story of how Bike Share has changed over the past few years through the story of that company. So to start off, for people who might not be very familiar with the bike share space, what was Bike Share before these major dockless micromobility companies kind of moved in?
SPEAKER_01Yeah, so broadly speaking, I mean, first of all, it's important to note that like Bike Share is a very, very young industry. Like it's basically existed in the US for like if you're if you're being as generous with timelines as possible, it's a 15-year-old industry, but really it didn't get going until the last decade or so. So we're talking about very, very young industry. In Europe, it's been around a bit longer. Pretty much everyone who has gotten involved in the North American bike share industry can cite their enthusiasm for the concept of bike share to like some European trip they took uh, you know, in like the in like the late 2000s. Um, Paris is a common example as they had one of the earliest and most expensive bike share systems. But anyways, so the way that bike share originally popped up in the US was through basically what would happen is they were contractors who worked with cities, and cities would kind of put out uh what's called a request for proposals or RFPs, just like they would for any other government contract or service and say, like, hey, uh, we're interested in hiring a company or contracting with a company to basically create a bike share system. And the way these RFPs often work is governments can provide as much specific information about what they want the system to look like or as little as they want, and basically create a bidding process where one of the things the companies compete on is vision, like this is what we think this bike share system should look like, and here's how much it would cost. The RFP process is a very slow process, especially by tech company innovation standards. It's typically like around a two-year process from the time an RFP is first kind of released to the time that a bike share system will actually start appearing on cities. And it's slow, it's an annoying process. It involves a lot of working with like communities on like community board levels, you know, going to like individual precincts or wards or community boards or however each city kind of designates these neighborhood level governance groups and basically being like, hey, we're thinking of putting like a bike share system in this city. Where would you want to see a dock? You know, and and also like at this time, all these systems were docked. They were docked bike share systems, which means you had to pick up a bike at a dock and unlock it, ride it to another docking station somewhere, and then relock it. So they'd have to put in these docking stations, and that would require a lot of like intensive urban design and architectural work. This was probably one of the most surprising things I learned reporting this story was that like you see a bike chair dock on the street and you're like, how hard could it be to put that in there, right? Just like flop it down, put in some bolts or like cemented or whatever, and you're done. That's kind of true, but the process of making sure that that dock goes somewhere that won't piss off a lot of the people who live around it is actually quite time consuming and intensive. And that is where the costs come in. Um, and that makes it expensive and difficult to like put in these bike share systems in a way that the community actually likes and supports. So that's kind of how how bike share systems worked in its initial iteration, especially in in North America. And growth was, as you would probably guess, really slow. Like it takes two years to build out a system, and that's just at the initial size. And then, you know, if it goes well, you got to start expanding. And that basically, like, you know, you don't have to start the process all over again, but a lot of the doc expansion process can be very time consuming as well for the same reasons I just mentioned. And you have to like work out the kinks and make sure there's political support for it all. So it was a very slow growing industry until MoBike and Ofotech companies sprang up around 2016-2017.
SPEAKER_00I think that's an important point because as you say, the bike share companies that existed before OFO Mobike and then Bird and Lime and Jump and all these other companies followed really tried to work with communities a lot more, tried to understand what communities want so that they could try to uh avoid uh the really negative reactions that we started to see uh when these big dock list models kind of moved in. Another piece of that, you you wrote in the piece that uh Social Bicycles was also trying to innovate on this model to ensure that the bike didn't always have to be locked to a dock and that there were more options for locking to make this an even more accessible service before these really dockless ones just came in and kind of destroyed everything they were working on, right?
SPEAKER_01Right. So, even I mean, the way that uh Ryan Respecki, the founder of Social Bicycles, tells it, um, this was really like a founding insight for him in building social bicycles, is that he wanted the bikes to be dockless, or at least have the ability to end rides at places other than their proprietary docks. But there's an important distinction here to what follows. At the time, this was seen as a very radical idea within the very, very small bike share world. But now, looking back on it, it seems very, very not radical and almost conservative, you know, compared to what comes later. But he never had the idea that like you should just leave the bikes like strewn across the ground when you're done with a ride, like just like lay it across the grass and just walk away. It was a model that allowed riders to lock the bike to municipal bike locks or other type of secure bike infrastructure, the same way that anyone would lock their personal bike to something when they finish a ride. So that it kind of got around the issues of basing a bike share system solely on these proprietary docks. And the reason why he wanted to do this was, I mean, there were there were a bunch of different reasons. One is the docks were the most expensive part of a bike share system, again, mostly because of the whole process you have to go through to cite the physical infrastructure and not so much because of the physical material costs. But the docks are really expensive, they're very restricting to a good bike share system because obviously if the docks aren't where people need them, then that really limits the usability of the system, or if there aren't enough docs in like places of high demand. So it just makes running a bike share system much more cost effective to have like some flexibility in where rides begin and end. And they did do this, you know, early social bicycles, which wasn't uh it's it's important to say like a lot of your listeners like saying, Oh, I never heard of social bicycles. Well, it's because social bicycles was not like a consumer-facing company. You wouldn't like open a social bicycles app and rent a social bicycle bike that said so be on the side or anything like that. They were basically a contractor. They sold their bikes to municipal bike share systems, which then branded them however they wanted to. A lot of times there was advertising like in Portland Bike Town, Nike sponsored bikes, and the bikes were called bike town. But like those were social bicycle bikes. And what you could do is you could lock them to one of their Soby locks, or you could lock them to anything else to finish a ride. But there was like some some pricing mechanisms too, where like if you weren't an annual member, it would cost a little bit extra to not dock it at the end of the ride, to lock it to like a regular bike lock. But I mean, that's like a kind of a minor detail in the grand scheme of things. Like that was basically the vision Ryan had, and they executed it for the most part.
SPEAKER_00Right. And so then when these big Chinese companies and then later the the American Dockless bike and scooter companies move in, they operate a different model than that, one that you call free locking, where uh the bike or the scooter doesn't actually have to be locked to anything when it finishes. So when these companies start to move in, around what time period is that? And what really starts to change as a result of those companies being present in American cities?
SPEAKER_01So it's end of 2016 and early 2017 that this really reshapes the kind of bike share landscape, especially in North America, which is where Sobey was primarily operating at the time. But it was all around the world too. Like they're both China-based companies and they started there and then expanded to the rest of the world when they received massive amounts of VC funding. I mean, between the two of them, I think it was something on the order of like $2 billion that they got in VC funding in a very short period of time. To compare that to what Sobey was dealing with, they had something like six million dollars in funding through their like eight years of existence up to this point. So like the scales are just totally out of whack. So how they changed this whole bike share dynamic is kind of like twofold. One is the bikes were completely dockless. Like they didn't do any docking infrastructure whatsoever. The bikes would get locked and unlocked for use totally via an app. You know, it was all digital programming. There was no physical lock to lock the bikes to any kind of infrastructure. This worked in tandem with the kind of like business models that they had, thanks to all the VC funding, which was a very familiar story to anyone who's familiar with how the tech industry has worked under like VC capital, soft bank style growth models, right? They would buy huge amounts of bikes, like tens of thousands of bikes in one order, ultimately having millions of bikes within their company around the world. They would launch in new markets, not through a two-year RFP process like Bike Share had done before, but instead by going to the city and saying, hey, just give us permission to like put these bikes in your city and we'll pay for everything. We'll pay for all the bikes, and you won't have to do anything. All you have to do is like give us permission to be here. And sometimes if the city would say no, they'd even say, okay, we'll pay you for permission to be here. Like literally, they just like threw money at the problem in every possible way. This disrupted the bike share model for companies like Toby for pretty obvious reasons, right? Because it's like you're a city and you want to launch a bike share system, and one company is saying, you have to pay us to make this worth our while, like, you know, hundreds of thousands of dollars over the course of several years to run this like very limited bike share system. And it'll take like, you know, probably a couple of years to really like get it off the ground. And then another company comes in and is like, hey, just let us give you some money and then we'll throw a thousand bikes on the street next week. It's pretty obvious why cities would find one of those propositions more attractive than the other, at least in the short term. And that's pretty much what happened. So we uh quite obviously couldn't compete with what the new bike share landscape was offering, and they had to like completely change the way they worked.
SPEAKER_00Yeah, of course. And they kind of followed this Uber model backed by venture capital that's obsessed with exponential growth and moving into new cities and having a ton of new bikes and just like growth, growth, growth. And the employees of Jump that you spoke to really described how that change impacted the company itself and really changed the way that things worked internally, right? And and really their focus and and what they were trying to do.
SPEAKER_01Yeah, so I think first it's important to note that the reason why Sobey was able to pivot and then become attracted to Uber for a purchase was because they had been working for about two years at this point on a new version of the bicycle that would be electric powered. It would be an e-bike. And they thought very carefully and hard about the design of that bike and about how it should feel to ride the bike. And by pretty much every account that I came across, they created a really superior product. Like their e-bike was just better than anything else that was available in the bike share world or even like on the horizon in the bike share world around 2017. It was just very obvious they kind of had this like ace up their sleeve in terms of like how to survive through this. But they didn't have the capital to like really expand the e-bikes beyond like a few hundred models in San Francisco, which was all they had when they were preparing to launch in San Francisco. As you said, they got acquired by Uber. It was a bit of a process. First, it was just like a partnership with Uber because this was like the summer of 2017, which people who may remember Uber's story around then, like this was when Travis Kalinick was still in charge of the company and like basically flaming it out in spectacular fashion as just like scandal after scandal was hitting the company. And so they were in like no position to be acquiring at that point. But they basically formed this partnership where Jump was like in the app, and they hooked Jump up with some venture capital firms, which gave them some money to stay afloat, and then ultimately acquired them in the first quarter of 2018. And pretty much overnight, Uber basically turned Jump into everything that the other bike share companies had been. They were suddenly obsessed with scale. They were now going to do the same model of invading cities with thousands of bikes and just kind of dropping them on the street and seeing what happens. They were going to pay almost no attention to like supply chain resources and like trying to run an efficient operation as they ramped up. They had huge issues of bike maintenance because they were working on such aggressive time frames that they couldn't really think carefully about the designs of the bike and how they wanted to kind of scale it. And in general, like one thing I heard over and over was that they were applying a software approach to a hardware product. Because with the Uber app, if you roll out a new update and something isn't quite working right, or you know, you need to tweak something, it's very easy to do so. You either change some code on the back end, or you know, worst comes to worst, you release a new version of the app that can get pushed out very quickly. That's obviously not the case with physical bicycles, where if there's something wrong with the bike, the only thing you can do is go and fix them one by one. And there were things wrong with the bikes, you know, just as there's something wrong with almost anything you produce on a mass scale. And what that resulted in was mechanics on the local level, having to fix them one by one. And a lot of times they wouldn't have a part needed to fix them. Or, you know, there was a design flaw with the locks on basically their most used bike model, and it was just too flimsy and too easy to break. And it resulted in a huge issue of theft and vandalism of the bikes in certain markets. And you know, that was something that like they just couldn't fix because it was how the bike was designed. They'd have to wait until a new bike was rolled out and the bikes became obsolete. So they just like encountered all of these gross inefficiencies because, in my opinion, they just didn't really understand the business they were in. These were incredibly expensive mistakes and something that could have been prevented if they moved a bit slower. But that wasn't their mindset. You know, they kind of put, and I think like the ultimate example here is once they bought Jump, they immediately integrated it into this new unit they created called the new mobility unit, which looped in like their bike share and scooter and transit operations, like working with public transit to include those options inside the Uber app. And the head of this unit was a woman named Rachel Holt, who was basically like an OG Uber person who like oversaw the growth of the app in its original rideshare days and was very much a like software-based exponential growth model type of person. And that's how she ran the new mobility unit. That's how she ran Jump and it just didn't work. Jump lost a lot of money being run that way, and it wasn't clear that it was ultimately good for cities to run the bike share system that way either, because it was just too inefficient.
SPEAKER_00I think that's a really good point. And I think one of the things that you really bring up there is how when Uber took over Jump, there was really this change in how they approached and how they thought of bikes and bike share, right? Whereas before, the people who worked at Jump or Sobey really cared about uh the bike and the product that they were putting out there and uh kind of the experience that people were going to have with it. But then when Uber took the company over, all of a sudden the focus was on uh growth and gaining market share. And the actual product itself didn't matter so much. So like I remember when Ubers were being put on the streets and e50 things. And there were actually on one hand, feedback executors were really going to change everything, and now everyone's going to use it because we have to like Bitcoin changes how people think about transportation. But then on the other side, there were a lot of people who were angry because now all the sudden feedback scooters were cluttering their sidewalks or being really easily destroyed, and it came out a little bit later that you know the bikes were lasting in some cases mere weeks in the fleet before they were just being completely crashed. So it really kind of changed the mentality around bikes. And I guess I wonder, do you think that really kind of hurt them? And do you think it hurt the goal that these people who originally worked for jump and social bike schools had of really getting people to adopt and care about bikes and to see them as an important piece of transportation in major cities?
SPEAKER_01Yeah, so I think I think there's a lot there. Um so you'll have to make sure I actually answer your question.
SPEAKER_00Totally. Yeah.
SPEAKER_01I think to me, one of the biggest lessons from reporting the story was when you're a company that builds something that is going to be in the public space for everyone to physically interact with in one way or another, that the people working on that understand the dynamics under which they're operating and care tremendously about the organization's mission. And I think that this kind of sounds like a little corporate speaky. Um, I'm trying my best not to do it because, like, unfortunately, a lot of these lessons have been co-opted by corporate leaders to sound like they mean something they don't. But I think this is a great example of like if you have a bike share company that's fundamentally being run not by bike people, but by business people who don't ride the bikes and don't ride bikes at all and generally don't like interact with their city's physical infrastructure except from within a car, then you run the risk of making some very, very fundamental mistakes. And I think that's exactly what happens here. Among other mistakes, I mean, Uber has a certain corporate mindset that I think made it fundamentally incompatible with bike share. But I think it's a mistake that any company could have made by letting a bike share system essentially be run by people who fundamentally don't care about bikes. And you know, one of the things that, you know, I think like this is where a lot of the former employees kind of kept hitting on this point of the free lock versus lock two debate, as they as they called it. And it was something that they had a lot internally, both at SOB and at uh Uber. And they never went to like a completely free lock model under Uber. I want to be clear here that like even under Uber, they were still technically a lock to company, but it became kind of harder to police based on like the bike designs for various reasons. And so it's fundamentally like you could lock the bike to nothing. All you had to do was just disengage the lock and then engage with the lock again, and you'd fool the bike into thinking that's been locked. But like that's a hard problem to solve. And you have to be a really passionate person about how bikes can make cities better in order to care about that kind of thing. Whereas if you're just like a business person running. Company that gives you all you need to go to cities and be like, hey man, we're trying. People aren't acting responsibly. Like, what do you want us to do about it? You know, or something like that. And I think it's just a good example of how you really need people who understand the nuances of how, you know, in this case is bikes interact with kind of like the city landscape more generally to understand that like not only is it like a really bad look for your company to have like a bike blocking the sidewalk so a person in a wheelchair can't get by, but also, you know, just the image of your company and your product as a whole. This is something that one employee told me that, like, you know, when you have your bikes just like strewn everywhere, it makes your bikes look like trash, like literal trash to just have it like lying on the ground. And it's hard to uphold like your company's reputation or even just get people to pay for your product. I think it's like important if that's how it's going to be treated and regarded. And you know, I just think these are things that were overlooked by people who never really cared about bikes to begin with and just saw them as like this faceless, nameless product that they could create a hockey stick growth chart with and impress investors with.
SPEAKER_00Yeah, I I completely agree. And I feel like that's almost the difference between like a mentality that really cares about the bikes and is really invested in trying to get more people using, you know, active mobility in in cities instead of cars. Uh and a different mentality that is really just focused on, as you say, exponential growth, but even more than that, capturing or controlling or monopolizing transportation in a city for the benefit of a company, right?
SPEAKER_01Yeah, I mean, one of the one of the things that I found most interesting reporting this story was talking to the former jump employees, you know, who are all almost all like obsessive bike people, you know, dating long before their employment at this company. It was why they were employed at this company, because they believed so much in the bicycle's potential to make cities better places to live. And it's like just hearing what they thought of getting acquired by Uber, which a lot of them really didn't like as a company, even at the time, and then just how their kind of impressions of the acquisition and their time there evolved and changed and kind of what they think about it now looking back on it. It's interesting because it wasn't as uniformly bitter as I would have expected it to be. Like we hated this company, then they bought us. We thought it might work out okay, but it didn't, and they suck. Like that was kind of what I expected to hear. But that was pretty rare. Mostly what I heard instead was a very mixed bag. They gave Uber credit for like basically sharing Jump's vision of what bikes could be for cities. Uber bought jump because they viewed the jump bicycles, the e-bikes, as complementary products to their ride hail business, not as a replacement one. And you know, I heard some employees say that like they had done some internal analysis on you know what ride hail trips the e-bikes would most likely replace. And it would mostly be ones that weren't profitable for Uber to begin with, these like shorter urban trips where they have to give drivers a very high proportion of the fare to make it worth the driver's time. And so Uber would end up with comparatively little of the of the fare overall. And so there was this like mindset that like Uber really did buy the company for the right reasons and not like an overly cynical one, but then just like didn't really know what they had and how to execute it properly. You know, it was just a kind of case of like corporate hubris instead of like corporate evil, if that makes sense.
SPEAKER_00And it's really interesting you say that because about two years after buying Jump, Uber disposed of it onto Lyme in exchange for an investment. And at the time it was reported that Jump, I believe, was losing like $60 million a quarter, I think. So you say that the bikes were supposed to replace these crits that it was losing money on, but then because of the way that it ran its division, it was losing a ton of money on bikes as well. And of course, I think it's worth noting that Uber is not a profitable company, it still loses billions of dollars every year. It's still extra capital, it's giving it money to allow it to keep going right. So when I was tweeting a story, I was thinking about how one of the kind of operating model that has a really high cost to it compared to a regular taxi company. A lot of the tech media kind of talk about Uberpaid engineers and it's high-paid executives and it's expensive headquarters and all these things that your regular taxi company doesn't have that creates a kind of much more expensive way of operating that it then voices it onto jump. So I guess I wonder can these companies who run bike share in this way ever do so in a profitable way because of how they actually run it in the first place?
SPEAKER_01Yeah, I think this is something that is still being debated within the bike share world. Because, like I said, the industry is still so new that they don't really understand how much of the lack of profitability in the sector in general is due to the kinds of mistakes and growth models that we've seen from Uber and for that matter from Bird and Lyme and Ofo and MoBike, and you could just keep going down the list that like chased growth for growth's sake and never got to the point of profitability. Or how much of it is just like, hey, this industry is really new, everyone gave it their best shot, and like, hey, it's just not a profitable business idea. Oh well, there's still like a very healthy debate within BiteShare about which of those two cases is more accurate. I think most people kind of land on some balance between the two that the growth-based model is definitely not the way to go about it and like can never be profitable just because the margins are far too thin for that. But I generally heard at least some optimism that there is some kind of profitable model out there for bike share. Perhaps it's very limited to big bike-friendly cities or like maybe even college towns. Or, you know, perhaps it's on a smaller, more geographically limited model, in which case it's not a very equitable system in terms of like complete coverage within an entire city, but is limited more to like downtown or business district or tourist districts or something like that. In terms of where I personally land on it, I have covered all different types of transportation modes in my time, you know, from public transportation to cars to bike shares, scooters, all that stuff. And I've written a lot about American transportation history too. And one of the things that I've learned is that transportation in general is not a profitable business, or at least a very, very, very difficult business to make profitable. You go back throughout American history and any kind of shared or public transportation system has always had a hidden subsidy somewhere, sometimes hidden, sometimes not. But like you go back to like the streetcars before like the automobile took off, and like those were subsidized by either real estate interest or electric companies or like other kind of larger business conglomerates that had a reason to run the streetcar system for some reason. And then you go forward in time, and you know, then you had the municipal subway systems that optimistically were started as like kind of public-private partnerships, but over time that model completely collapsed because the private companies didn't make enough money to conduct maintenance or regular car repairs or other kind of like basic business necessities in order to keep business running in a long term. And all the systems collapsed. They ultimately became government-run organizations in some form or fashion because no one else was willing to buy up the companies and run them because they were not profitable. And with cars, too, like I mean, you know, you could say like, oh, the car industry is so lucrative. And it's like, well, that's that's true to an extent. I mean, first of all, like cars in general are an extremely low margin business. It's not nearly as wonderful of an industry as most people think, especially in the last like 20 or 30 years as it's really become a globalized industry. And even then, that's with them having to do absolutely zero of the infrastructure cost to support the use of these vehicles. GM doesn't have to spend a single dollar on building or maintaining roads, but like their products are worthless without those roads. So I think like when you look at bike share, I think it kind of runs into a lot of these similar lessons that we've seen from other transportation modes throughout history, where without some kind of subsidy somewhere, it probably isn't profitable. I mean, and that's not really a knock against bike share. That's just how transportation is. It just is not a profitable industry without a subsidy somewhere. And so you get a little bit of a subsidy from cities maintaining or building bike infrastructure, hopefully. But even then, like with bikes, one of the benefits of bicycles is that it doesn't need nearly as much expensive infrastructure as these other transportation modes. Bike lanes are extremely cheap to build and maintain relative to trains or cars or buses. So that's like a savings that Bike Share offers that hasn't been internalized yet because cities haven't realized that it's cheaper for them in the long run to promote bike as a form of transportation and like subsidize maybe the system to a little bit more of an extent to realize these long-term savings or to subsidize it directly. You know, there is a growing call from people in the micromobility world to say, like, if we want these systems to stay in existence, cities are gonna have to start subsidizing them in some more profound way. Which of course is kind of ironic because it goes back to the sobe model of RFPs, where City is basically paying them to bear some of the cost of the bike share system, which is kind of where we were before this whole dockless VC backed model came in and quite obviously wasn't sustainable. So, yeah, I mean, I think there's a lot of things to still figure out about it. But I think this idea, you know, as someone in the story put it, you know, that the business community has solved bike share by creating this VC model, that that turned out to just not be true. And so we're kind of back to the drawing board of how to make this work in a sustainable way. And that almost certainly involves some degree of public investment.
SPEAKER_00That's a really important context to just kind of have there as part of this discussion, right? Because all transportation requires public subsidy of some form. And when it comes to automobiles, I feel like people just see the roads and they're completely normalized and they totally internalize how there's a ton of tax dollars being spent to ensure that their highways and the roads and everything can exist, right? That's part of the reason that I think if SpikeShare is going to really be successful in a lot of cities, it should just inevitably be a public service that's provided by the city instead of companies. The idea of Fikers in the first place. And so ongoing and some way to help people to there might be a different way of doing transportation or organizing cities, or at least opened a lot more people's minds to it. And maybe we thought about it in the past as cars were taken off of streets off before and locked down and people have to see how clean the air was that were solved, and now there are stories from around the world of bike shops being sold out because so many people are going to buy bikes, right? And tech tried to solve the problem of bike share and has kind of failed, right? Or or at least it looks like they have failed. So I guess I'm wondering, as you look at where things stand right now, what do you think the future is for bikes, whether that's bike share, owning bikes, what have you?
SPEAKER_01For North America specifically, I think Montreal is doing wonderful things with protected bike lanes. They're probably one of the better North American cities as far as that's concerned. But in general, I would say the future is trending in the right direction in North America, but not fast enough, not as fast as it could or should happen. I do agree with you that the pandemic has resulted in a lot of people, especially ones who live in the kind of the denser North American cities, to think more carefully about like how we get around and what the best way to get around is. And even just the necessities the pandemic has brought upon us that in places where public transportation usage is higher, people are more enthusiastic about taking bikes instead of riding in these enclosed spaces for obvious reasons. And I think that's generally a positive thing. Riding bikes is great for cities for all kinds of reasons and for the people who ride them. But I think in terms of like the urban well-being, the mode shift we need to see is not necessarily from public transportation to bikes. It's from private automobiles to either public transportation or bikes. And I'm worried that mode shift might not take place as much as a result of the pandemic because private automobiles are still perceived to be very, very safe for health reasons. But in general, in terms of like where I see bikes or bikes are going, I do think the shared mode industry is in for tough times. Not really because of anything the pandemic did. It's actually like kind of ironic that the pandemic probably bought these companies a little bit more time because they lost so much money running the services on a day-to-day basis that by being forced to shut down, they actually bought a little time to kind of like rethink what they are and how they want to operate, which is a testament to how shitty their business model is. Being forced not to do business is actually a little good for them. But I don't know. I've always been kind of pessimistic when it comes to the prospects of shared mobility because the great thing about bikes is how cheap they are. Like I don't have to go drop $18,000 or $20,000 on a new bike to get around everywhere like I do with a car. Like I bought a really nice bike last year and I kind of splurged because I was gonna ride it a lot. And I think I spent like $1,500 on everything, including parts and accessories. So like my fenders and my paneer, my rack, and my lights and all that shit. Like all in, it was like $1,500, which is expensive for a urban commuter bike. But it's gonna last me for, I don't know, however long I want it to last it, like probably at least 10 years, I expect to get out of this bike without really putting much money into the maintenance. So if you're thinking about bike share models, you've got to think about people who are gonna use the bikes with any kind of frequency in order for it to be successful. Because like if you're just courting people who ride a bike like once or twice a month, then you're probably not gonna be successful just on your own right. So then if you're okay, well, people are gonna use the bikes like what, maybe once or twice a week is probably like your target audience. What's your price point gonna look like where at that frequency of usage, it wouldn't be better for these people to just buy their own bike? I think it's a really, really hard balance the bike share has to strike between being affordable enough that people don't really think about, you know, whether they should use the bike share versus a metro ride versus an Uber or whatever, or just walking if it's a short enough trip, versus not like completely alienating regular bike users by being too expensive that like they just say, oh, screw it, I'll just buy my own bike, it'll be so much cheaper. The thing with Ride Hail is because buying a car yourself is so expensive, the price can actually be quite high in order to still use it regularly and save money over time. But that's not true with bikes. And I think that's kind of like a fundamental tension that maybe there's some way they can solve it. I've seen like some companies starting to experiment with like monthly shares where like you basically rent a bike share bike for an entire month instead of like just a single ride. And maybe that makes more sense. Do you know for someone who only wants to ride in nicer summer months, you don't have to just figure out where to put the bike during the winter if you have a smaller apartment. I can see angles here, but none of them really strike me as huge, successful businesses. They all strike me as like really nice niche businesses that work in some cities for some people, and you can, you know, have a nice small company based on it, but not the type of thing that an Uber would be interested in.
SPEAKER_00Yeah, I completely agree with that. You know, the bike is such a simple thing, and it doesn't need all this like added complication to it, all this added technology, other than maybe a motor, so it's a bit easier to go uphill, get the places a bit quicker, and all those sorts of things, right?
SPEAKER_01Yeah, it's kind of interesting. You know, the name of the pod is obviously tech won't save us. And in general, I'm in huge agreement with that as a foundational statement. But I do think we often ignore the technology that actually can save us. And I think one of the reasons I I kind of enjoyed reporting the story so much is I feel similarly about the e-bike as Jump and even Uber did when they decided to acquire the company. I don't own one, but I've had the pleasure of riding an e-bike around New York on a few occasions, and it's absolutely transformative. I live in central Brooklyn, which is like about 12 miles by bike to uh midtown Manhattan, which, you know, back in pre-COVID times is where a lot of people worked. And it's too far for a bike ride for most people, especially if you don't have like shower facilities where you're going. You know, you got to deal with like hills and the bridges. It's just too much to ask for most people. But that's not the case on an e-bike. On an e-bike, I could bike there on an 80-degree morning and get there and only be a little bit sweaty because it just requires so little effort, even to bike up the steepest hills. And I think like the potential of the e-bike to kind of unlock so many transportation problems in our urban areas is incredibly profound if the infrastructure is built around them to encourage people to use it. And look, an e-bike is technology in every definition of the term. But like, you know, there's not like the same excitement over the e-bike as there was for like this app that lets you hail a taxi instantly. And that's something that I don't really know how to reconcile. Like, why VCs get so much more excited over apps than they do over like truly foundational hardware, or why they're just like so ill-positioned to take advantage of those kind of technological leaps that really can transform our cities. This isn't to say there's no excitement over the e-bike. I mean, there certainly is. There are lots of kind of like lower key venture capital firms or technologists who really love the e-bike, but I feel like it's technologies like that that are more like iterative improvements over existing technology, but really are transformational in how our lives can work, or how our cities function, rarely get the kind of enthusiasm that these other technologies do.
SPEAKER_00Yeah, I completely agree with that, Aaron. Thank you so much for coming on the podcast today, for writing that fantastic piece to give us a better glimpse into what happened at Uber and Jump. I really appreciate it. And thanks again.
SPEAKER_01Yeah, thanks so much for having me.
SPEAKER_00Aaron W. Gordon is staff writer at Motherboard and the author of three.