An Interview With Toby Sun, Co-Founder Of LimeBike
The bikeshare startup is seeing rapid growth in various types of U.S. cities.
The bikeshare startup is seeing rapid growth in various types of U.S. cities.
The private bikeshare industry has stumbled very suddenly into America. Although long a feature of dense Asian cities, the industry was for several years limited in the U.S. to public-private partnerships that either didn’t work, or required subsidies. All this changed in what seems like a year or two. Companies such as Spin, GoBike, Ofo, Mobike and Zagster are carving out niches across the cities and college campuses of urban America.
Another early player has been LimeBike, a San Mateo-based startup launched by Toby Sun and Brad Bao. Just as Uber revolutionized the cab industry by digitizing it, LimeBike joins a rising storm of dockless bikesharing systems that operate by phone app. Its main achievement so far has been serving as a lead anchor in Seattle, which has the nation’s lone dockless-only citywide system. This has helped LimeBike gain $12 million in seed funding in March, and grow rapidly in the ensuing months.
Recently I spoke with Sun and Caen Contee, a founding member of LimeBike, to learn about their fast start and their future plans. The conversation has been edited for concision and clarity.
LimeBike jumped onto the private bikeshare scene quite fast. Is it really just under a year old?
Sun: This is officially our 11-month anniversary. We founded the company in January of this year, but really started to look at the urban mobility and transportation factor several years back. I have a consumer product background, and a venture capital investment background. So I have experience looking into exciting products like autonomous vehicles, Uber/Lyft, and dock-based bikesharing. I got to look into dockless bikesharing in Q2 of last year. So we founded this company this past January, but we’ve been studying this industry for over a year and a half. We raised our series A in March. We launched our first market in Greensboro, North Carolina in June. We launched our first major market in Seattle in July. And after that we’ve launched in one or more markets every week. In a roughly 3-to-4-month timeline, we’ve gone live in 25 markets, which includes 16 cities and 9 college campuses. This includes big metropolitan areas like Seattle, Dallas, DC and Los Angeles; and schools like Notre Dame, UNC-Greensboro, Arkansas State, etc. We’ve so far seen over ¾ million total rides in only 4 months, and we’ve got over 300,000 registered users.
Contee: What we’re trying to do now is build that system out to our goal of 30+ markets by the end of the year.
What is it that caused LimeBike to grow so fast? Some of your U.S. competitors have been around for several years, but you’ve become one of the industry leaders.
Sun: Having a team together to activate a dockless program from day one was super important. That might take another company half a year or even longer to make that pivot. The reason is that when they first started, the technology was not quite ready. But we’re starting from a new angle.
Contee: Part of the perfect storm for us has come from the business model. Bikesharing 1.0 was the dock-based system. But a dock-based system costs millions of dollars to deploy in cities. As a result, they were limited to large metros that could afford to fund them, or find anchor sponsors for them. But for our new economic model, we don’t have to pay for docks, we don’t have to pay for the kiosks or the fobs, so we can deploy far more bikes for no cost to the city. So we’ve created a system that takes away all of the economic barriers. And this actually opens up the market, meaning it’s not just the large metros we can serve.
How do you decide which cities to open in?
Sun: It’s a combination of things. So when we first got started, the reason we chose UNC-Greensboro–which is not the typical first-launch market for a lot of technology companies–was, Number 1, that they had a present need. They’d been thinking about a bike share system for a long time, but had found the dock-based program kind of limited. Yet the city is committed to building more bike lanes and improving the bike infrastructure. Number 2, they really embraced new technology, which impressed us a lot. Number 3, the UNC-G campus has more than 20,000 staff and students, and the city has 287,000 residents. So they had the population and the density to meet our criteria.
All these things put together, and it’s turned out to be a great first market for us. And that goes for the medium-sized cities with similar combinations, like South Bend. So we started with the small, passionate markets, that will work closely with us and that we also learn from, before we get to the bigger markets.
But even with smaller markets, do you find that there must be a certain minimal population density?
Sun: It varies. Sometimes a super-small market with only 10,000 people can support a program. Key Biscayne, FL, where we launched, only has 10,000 residents; but there are over 1 million travelers going to that market every year. But ideally, we like a 1-to-100 bike-to-person ratio. So that requires a certain level of density over the coverage area for our bikes.
What are the specific challenges of working your way into bigger markets?
Sun: You need a bigger team to manage it. So it turned out that starting in a smaller city was a good thing for us. That way when we come into the big cities, we have a playbook, we have a solid team that has experience dealing with the issues we have seen in smaller markets, and is able to manage a more complex environment.
Which city have you found to be the best market so far, and do you think that answer will change as you expand?
Sun: Seattle has been the best so far, because we have the most bikes there. Dallas is surprisingly good too; in some areas the ridership is even higher than Seattle. Ten years from now, we see it being New York City, San Francisco, DC, Chicago. All these very high-density areas that are suffering from traffic congestion and pollution will be the biggest market for sure.
Have you had any regulatory battles so far, and do you anticipate that heating up as you expand?
Sun: I wouldn’t say it’s a “battle”. I’d say it’s an “ongoing discussion”. Cities love bikes, and cities love bikeshare. But it does take some time to educate them on how this will bring unique advantages to the city.
In some cities that we’ve launched, we have all the officials’ support. We’ll announce the programs with the city councils, the mayors, the DOT directors and the school chancellors in attendance. There are other cities that have been a little slower at adapting to this change. But I wouldn’t say it’s a battle. We are actually seeing the changes way faster than we thought it would be.
You said your goal by the end of 2017 was to expand into 30+ markets. What are your other goals?
Sun: We aim to deploy between 50,000 to 70,000 bikes. We have roughly 10,000 bikes deployed in the U.S. now. In terms of ridership, by the end of the year, hopefully we can get up to 2 million rides.
What about the long-term goal? Do you want to become the Uber of bikeshare?
Sun: We want to be the LimeBike for, uh…mobility options (laughs). If you ask me what the vision will be in the next 3 to 5 years, we want to become the default short-trip, on-demand service for getting people around cities. After that, we hope to transform form a mobility platform to a lifestyle brand, where people can use one bike to make friends, choose another to stay healthy, choose another to get other things done. So we feel super, super excited.
[This article was originally published by Forbes.]
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.