Can Private Bikeshare Serve South Side Chicago?

Chicago, IL – An ongoing critique of most sharing economy startups, from Uber to Airbnb, is that they don’t achieve “equity” – aka the willingness to expand services across class, racial and neighborhood lines. This is true of the bikeshare concept also, which in its early stages in the U.S. has become the darling of college students and yuppies. But here in Chicago, one company appears ready to serve the city’s notorious South Side. The question now is whether the city government will let it.

In November, the bikeshare company Ofo, which is based in Beijing and estimates its worth at over $2 billion, granted 14 “seed bikes” to a local bicycle advocacy group, to be used in the South Side areas of Riverdale and North Lawndale. The company’s goal is to roll out full fleets there by April.

But Ofo can’t yet do this – nor can LimeBike, Zagster, or other potentially interested companies – because the industry is illegal here. The city has yet to write a formal private bikeshare policy, and doesn’t want companies operating without regulations.

There are three concerns here, both from the city, and various media outlets, such as the Chicago Reader. One argument, recounted by fellow Forbes columnist Jeff McMahon, is that because these private systems are dockless – allowing users to drop their bikes anywhere – they might create clutter. A second concern is that private bikeshare will steal customers from Divvy, the city-run system. This is likely true – just ask Seattle – given that Divvy uses a more expensive and less convenient dock-based system. The third concern is about equity; Ofo and other companies will presumably be just another trendy app for rich people and rich neighborhoods.

The flaw with this argument is that Divvy, despite its monopoly power and vast public subsidies, doesn’t achieve equity either. A system-wide mapshows docks that are heavily concentrated above Roosevelt Road, which has long been a dividing line between the poor South Side and wealthy North Side. Of course, South Side Chicago is less dense—due largely to the population decline caused by crime—and people there have less money. While Divvy subsidizes certain groups, a Chicago Reader report this summer about the system’s lack of equity found that prices remain a factor. A one-day unlimited Divvy pass costs $9.95, and according to its online pricing system, there is no option for a cheap single ride.  Ofo and LimeBike, meanwhile, have hourly rates that can run under $1.

So if any system will spread into South Side Chicago, it will be these private ones, which are cheaper because they don’t have to cover for dock infrastructure. That Ofo is already donating bikes here shows how they recognize this opportunity. Maybe soon the city government will, too.

[This article was originally published by Forbes.]

Scott Beyer
Scott Beyer owns and manages The Market Urbanism Report. He is a roving cross-country journalist who writes regular columns for Forbes, Governing Magazine and HousingOnline.com.