Innovation Management

Case study
Bike Sharing Systems: Motivate Company

By: Tapiwa Steve Mandaa, Rup Chandra Hamal & Jibola Leventis Agboola
Date: 30 November 2015

Bicycle Helmets Storage Solution

Transport, the daily means of our movement from point A to B plays a very important role in our life
today. Existing throughout the world, the creation of the first means of transport dates back as far as
3100BC with the construction of wind powered sail boats by the then leaders of olden day
innovation, the Egyptians. Development in the transport industry continued with the domestication
of horses, camels, the invention of the wheel in Iraq and the road network system in the Roman
Empire. On water several forms and models of mini boats were constructed after the Egyptian
model, but the major development was around 1200BC when the Romans invented much larger and
more powerful sail boats that revolutionised cargo transportation. Cargo boats had the ability to
carry up to 1000 tonnes of cargo or a load of 1000 people which made them flagships on the sea
shores. The industry continued to grow with the introduction of the omnibus which is believed to
have been the first organized public transit system within a city in Paris France, 1662.
Precisely, the generation of income from public transport finally came into existence with the official
launch of omnibuses in 1826 in Nantes France, which was further adopted in London, July 1829
(Wikipedia, 2015). The 19th Century saw the invention of the major modes of transport we know and
still use today that include railway transport both over and underground (steam and electric), air
transport, cars and steam ships. In 1919 the first ever passenger plane journey between London and
Paris went on, which was further going to develop into the worlds most convenient long distance
mode of transport (Lambert , 2013). However, within any innovative industry problems arise due to
project failures and many other deficiencies in the development of new technology. The transport
industry has faced its own fair share of problems that arise due to new technology or projects that
further down their life time prove to become harmful to the environment or not as efficient as
initially thought to be.
The major problem within the transport industry today is traffic congestions which has put an
immense amount of pressure on the environment, the economy and most importantly straining our
lives. In the US alone a regular driver in rush hour wastes over 90 gallons of fuel a year and spends
over 40 hours stuck in traffic jams which amounts to one week of work. In 1997 a total cost of $900
a year per driver amounting to $72 billion was wasted on wages and fuel due to traffic congestions
(Langer, 2005). In a bid to minimize these values several organisations came up with solutions that
could improve and lower these figures to make the industry much efficient. Governments have
invested in highway expansion projects, public transport infrastructure development and several
other efficient means of transport. In Europe alone under the Juncker Plan 315 billion is being
invested over three years to develop public transport infrastructure (UITP, 2015).
Other than the traditional public transport modes available new ones have since been developed
upon, bike sharing being one example. Bike share programs are set up in way that allows people
within a metropolitan area to share bicycles that they rent for a fee at a particular bike station and
can ride them to the next station this, however, has not always been the case. Bike sharing has
developed in stages known as bike sharing generations. The generations include three phases with
the first called white bikes which originated in the Netherlands in 1965 and was a system that
provided bicycles to commuters from one station to the next free of charge. This was followed by
the second generation known as the coin-deposit system and then finally the third generation or
information technology based system (Sache , 2011). This comes in as a handy solution to the traffic
congestion problem for it is much easier and quicker to cycle through traffic jams than drive around
them. Cycling is also healthier, saves the environment from carbon emissions and is inexpensive,
thus a lot of todays challenges in the transport industry have been addressed by the bike sharing
program (Coscia, 2012).

To understand the market better here are some market dynamics for the bike sharing sector. Since
the launch of bike sharing systems more than 855 systems exists worldwide with 237 of the total
operating in China alone. In a report from Transport Reviews a London based journal the most
important part of bike sharing is not the availability of the service in many cities, but whether people
were actually using the service is what matters most and will lead to benefits associated with the
system. Below is a chart that shows observed number of bicycles in selected cities around the world
(Stein, 2015).

In Washington DC, 69 percent of more than 11,100 members surveyed using the bike sharing
system said they were motivated to use the system because of the importance of getting where they
needed fast and the distance between the bike station and their home also contributed to their
motivation of subscribing to the system. The major attracting factor of the system, however, is its
cost. In the same report by Transport Reviews, in London the percentage of low income earners
using the system rose from 6 to 12 percent between 2010 and 2013, also the associated health
benefits are estimated to have additionally increased the duration of physical activity by 74 million
minutes to Londoners using the service (Fishman, 2015).
The wide spread and pace of adoption of the bike sharing system makes it an attractive solution to
invest towards developing solutions for the transport industrys problems. Hence, Motivate formerly
Alta Bike Share is a market leader in the bike share industry. Motivate is a New York based Bikeshare
Holdings LLC subsidiary, that was founded in Portland USA in 2009. The company was recently
acquired by Bikeshare Holdings LLC in October 2014, thereby relocating its headquarters to New
York. Motivate provides solutions for the bike sharing system to companies willing to invest in the
industry by helping with the location assessment of the stations, system maintenance structures,

solutions for expansion and marketing. Since its establishment as Alta Bike Share, Motivate currently
manages bike share systems in several cities across the US, Canada and Australia providing a flexible
and unique bike transit system for completing short journeys around cities as opposed to the
traditional long term bike rental companies.

Overview of the implementation of the chosen objective

How did they do it?
The bike sharing project in the US has been successful. The Motivate project is boosting up the bike
sharing industry in the country. There were more than 17,000 rental bikes, around 1700 bike
stations and more than 30 states in the US operating the advanced third generation bike sharing
system in 2013 (People for Bike, 2013). With the easy access of bicycles and due to the rise of bike
sharing systems, there has been as massive increase in the number of bike users to the extent that
people prefer to take a bike considering it as good for their health (People for Bike, 2013) and an
easy access to reach the city. Since launching in May 2013, New York Citi Bike riders have completed
2.2 million trips and travelled over 4.9 million miles (People for Bike, 2013).
However there has been a significant problem with the increase of bike accidents. People started to
get seriously injured and even took their last breath in an accident because they did not wear bike
safety helmets. According to (Markus, 2013), a study of cyclists in Washington and Boston by the
Harvard-affiliate Beth Israel Deaconess Medical Centre, more than four out of five people who
borrow bike-share bikes do not wear helmets and around 88 percent of the bike users are likely to
suffer head injuries if they are involved in an accident, compared to riders who do wear helmets.
Many people in the world ride a bike without a helmet, many because they say it is expensive or not
easily available to them. To overcome this problem, it was important to make helmets available for
all bike share users and at low hire or purchase cost. In 2013 Nicole Freedman, a Bostons bicycle
coordinator came out with an idea that the bike share programs should provide helmets to bike
share users through a vending machine from where the users could rent helmets at the same
location where they borrowed bikes (Markus, 2013). She also shared her idea and passed on the
challenge to a class of MIT mechanical engineering students. She discussed the possibility of building
a vending machine that would store helmets of different shapes and consolidating a cleaning
mechanism that would clean the helmets using intense heat generated form solar panels fitted on
the top of the vending machine just as a precaution to avoid complaints from users who would
refuse to wear helmets which would have been used by others.
Nicole Freedman started coordinating with the MIT Students. Making helmets and vending machines
was started by Chris Mills one of the MIT engineering student. But, there was a great obstacle which
was a way of determining whether or not a user has returned a hired helmet or not. To solve this
problem, Mills used RFID, radio frequency identification chips which would activate a door on the
machine that is available at different Bike stations around the cities and later the company could
pick up, clean and rent out the helmets again (Markus, 2013).

The actual result

The helmet vending machine promised to provide a solution for the dangerous and vexing problem
by letting riders be able to rent the helmet they would use to protect themselves from unwanted
situations at an affordable price (Time Inc, 2013).
One problem is that many people who were meant to have rented the helmets refused to wear
them. It was estimated that there are 88% of the riders were at risk of getting head injuries in the
event they were involved in an accident without wearing the helmet. Coming to a solution that was
going to solve this problem took years (Time Inc, 2013).
A part of the expectation from the bike sharing project is to minimise emissions and traffic
congestion, instead it generated another problem of safety. The bike sharing project wanted a
situation whereby riders could rent helmets from the same point where they rented the bikes via a
vending machine (Time Inc, 2013).
Many groups have tried a lot of methods to solve this problem, but all resulted in vain because the
helmet has an awkward shape and also the issue of riders unwilling to share helmets with other
riders (Time Inc, 2013).
The biggest challenge the solution developers faced was the problem that many riders do not return
the rented helmet which trigger a solution in which some designers developed an idea that
fortunately became innovative in the bike sharing program, the idea was planting a RFID radio
frequency identification chip inside the helmets to locate the helmet wherever the users drops it, so
that it can be picked and be cleaned to enable another users to benefit from the service, while some
engineering students worked on a dispensing system that could supplier the helmet to the riders at
the picking point (Time Inc, 2013).

Figure: Helmet dispenser machine

Source:
https://d2gn4xht817m0g.cloudfront.net/p/product_screenshots/images/original/000/269/608/269
608-b15e4e766c161c4ccf16a8c928bc442543cf607a.jpg?1389842482

Each of the helmet dispensing system can keep and supply 36 adjustable helmets with different
sizes, which cost $2 a day for rental and payment can be done via a credit card (Time Inc, 2013).
This innovation became the first helmet dispenser system in the US and many firms that deal with
bike sharing have showed much interest in the innovative product (Time Inc, 2013).

What we learned from this case

While doing the research, we realised that sometimes when people are looking for a way to solve a
problem, some problems sometimes come up along the line and there should be a strong positive
mind towards innovating a new product because it is challenging and frustrating process.
Having ideas and not developing on them or one of them is not efficient and could be a waste of
time. If we were in the position of developing a product to solve some kind of problem, we would
call on potential colleagues and start to do develop ideas basing them on comparisons with forecast
solutions, after having the result we would then produce a prototype for testing to enable us to
evaluate the usefulness of the innovative product of the future.

References
Coscia, S. (2012, November 26). Five Transportation Innovations That Will Save You Time and Money.
Retrieved from Big Think: http://bigthink.com/think-tank/getting-up-to-speed-the-future-oftransportation
Fishman, E. (2015). Bikeshare: A Review of Recent Literature. Transport Reviews.
Lambert , T. (2013, September 7). A Timeline of Transport in History. Retrieved from Local Histories:
http://www.localhistories.org/transporttime.html
Langer, G. (2005, February 13). Traffic Facts and Figures. Retrieved from ABC News:
http://abcnews.go.com/Technology/Traffic/story?id=462298&page=1
Markus, J. (2013). One City Finally Solved Bike Sharings Big Safety Problem. Retrieved from
http://nation.time.com/2013/11/14/one-city-finally-solved-bike-sharings-big-safetyproblem/
People for Bike. (2013). INFOGRAPHIC: BIKE SHARING SWEEPS THE U.S. Retrieved from
http://www.peopleforbikes.org: http://www.peopleforbikes.org/blog/entry/infographicbike-sharing-sweeps-the-u.s
Sache , R. (2011). Readers Digest Deutschland, 74-75.
Stein, P. (2015, May 22). Bike-share programs are expanding worldwide. Are they successful?
Retrieved from The Washington Post:
https://www.washingtonpost.com/local/trafficandcommuting/bike-share-programs-areexpanding-worldwide-are-they-successful/2015/05/22/59c93cba-ff23-11e4-8b6c0dcce21e223d_story.html
Time Inc. (2013, November 14). Retrieved from Time Inc: http://nation.time.com/2013/11/14/onecity-finally-solved-bike-sharings-big-safety-problem/

UITP. (2015, September 18). Focus on: Investing in Public Transport Infrastructure. Retrieved from
UITP: http://www.uitp.org/news/focus-investing-public-transport-infrastructure
Wikipedia. (2014, December 17). Ship. Retrieved from Wikipedia:
https://simple.wikipedia.org/wiki/Ship
Wikipedia. (2015, November 13). Public Transport. Retrieved from Wikipedia:
https://en.wikipedia.org/wiki/Public_transport