bus-journal
Friday, August 7, 2009                                                                           jason-and-tim

Jason Meinzer (left) and Timothy Ericson take bike sharing into the modern age.

They have the ticket to CityRyde

Philadelphia Business Journal – by Adam Stone

Timothy Ericson bikes two miles to work each day. Soon you will be biking to work, too.

At least that is the hope at CityRyde, a fledgling outfit that supports the growing “bike share” industry. Strong in Europe and expanding here at home, bike share offers urbanites a way to make short-term use of bicycles from a common pool, for a member fee that typically runs about $50 a year.  A nice idea, but generally not profitable, according to Ericson, who founded CityRyde with Jason Meinzer, a classmate from Drexel University’s LeBow College of Business. With consulting services and an emerging software product, the partners and their two full-time employees are helping bike-share firms develop and implement pragmatic business models.

The partners have won the attention with what local business leaders describe as their creativity and their intense focus.

“They are really quite amazing,” said Mark P. Loschiavo, executive director of the LeBow College of Business Laurence A. Baiada Center for Entrepreneurship in Technology. “I have seen a lot of entrepreneurs come through the center, and these guys are extremely determined and very methodical in their approach to building this business.”

Thus far the company’s consulting efforts have been carried out mainly in Europe, where bicycle sharing has already begun to take hold in the bigger cities. For a fledgling business to reach out overseas is not small trick.  “We do it by word of mouth, through our blog, and we also have a [commissioned] sales staff in different countries exploring relationships,” Ericson said.

“It’s funny. Most of the bike-sharing programs are in Europe, but most of the bike-sharing knowledge is here in the United States,” Ericson said.

Why has Europe taken the lead thus far? You probably guessed it.

“If someone falls off a bike in Paris, they go on and live their life. In the United States you take the city to court, you take the bike-sharing provider to court, you take everyone to court.”

American cities are making tentative forays, but there are fiscal issues that keep CityRyde from breaking in. “Right now a lot of the U.S. cities are afraid to use consultants since, theoretically, they have their own staffs to do this,” Ericson said. Fiscal responsibility demands in-house staffers take the first crack.  In the meantime, the company has drawn its consulting clientele from Dublin, Ireland; Paris and elsewhere.  The consulting work largely has to do with business plans: How can a vendor structure fees, fleet management, maintenance and other factors and still come out ahead? But consulting is really just a starting point for CityRyde. It’s the fuel the feeds the bigger machine.

Using the income from their consulting work, the partners have spent about half-a-million dollars on a project tentatively titled Oyster. Due for release by year’s end, this sophisticated software will automate many of the complex tasks bike-share vendors must manage on the road to profitability.

Preventive maintenance for instance is a perennial sticking point. Bikes must be kept shipshape and that means greasing chains and tending to sprockets on a regular schedule. Oyster will keep that schedule, literally tracking each component on a bicycle, reporting on how many miles each individual piece has traveled, and charting its replacement due date. The software likewise will help to deploy and balance staff citywide in response to heavier and lighter bike usage.

Among its more significant, and more complex, features, Oyster will track and manage the sale of carbon credits. This growing practice allows a business to reduce carbon emissions and then sell the savings to companies that may be producing excess carbon. World Bank officials have said global carbon credit trading will be a $100 billion market by 2012.

“Every time someone rides a bicycle instead of a car, they are theoretically taking emissions out of the environment,” Ericson said. Oyster

calculates those savings, which then can be sold on the open market. Paris bike-share vendor Vèlib’ takes in about $1 million a year in carbon sales.

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