Zagster Aims a For a New Bike Sharing Model in Cleveland

It did not attract as much attention as the bicycle sharing programs in Washington, D.C. and New York City, but earlier this month Zagster and several partners launched a program Cleveland, Ohio.

Part of the reason for the lack of coverage is that this pilot program is only in one part of the city. Meanwhile D.C.’s Capital Bikeshare had scored much attention for its extensiveness, while CitiBank’s big check to sponsor New York’s raised many eyebrows in the Big Apple. With the constant handwringing over whether bikesharing can survive in the long run, is Cleveland taking a risk — especially considering the cold temperatures several months out of the year?

But for Zagster, Cleveland offered an opportunity to complement the company’s success on corporate and academic campuses. Already boasting of clients including DTE Energy, GM, Quicken Loans and most recently, Duke University, this Cambridge-based company is bullish on the future of bike sharing — with a few caveats.

What sets Cleveland’s bike sharing program apart from other city programs is that it is owned and operated entirely by the private sector. D.C.’s Capital Bikeshare is run by local government. So is New York City’s Citibike, the funding model of which led to that cobalt bike fleet festooned with CitiBank’s logo that put some New Yorkers in a tizzy. Cleveland’s program has taken a different path. The city had actually completed a feasibility study on bike sharing and concluded that the business models available to them at the time would not work. Undaunted, several local companies in Cleveland, looking for a way to improve their employees’ mobility, reached out to Zagster, and a plan was born.

That plan for now is limited: 34 bikes spread between six locations in the Ohio City section of town. According to Zagster, Cleveland’s model has flipped the conventional way of developing a bike sharing plan — instead of long, cumbersome studies, local leaders decided to start small, get bikes out in front of citizens as fast as possible, and see how the program can grow organically. And this is not a program reliant on heavy advertising. The companies vested in Cleveland’s bike sharing have contributed seed money with the anticipation other firms will see the value and support the program. In turn, Zagster claims its business model is lighter on the capital- and operational-expenditure sides than city-run programs, it offers little risk to potential investors, sponsors and partners. This will be a busy winter for Zagster and its partners in Cleveland as they try to get more businesses to contribute to the till — and meanwhile, there will be plenty of data to analyze and gauge where and how bicycling could spread. Downtown Cleveland, of course, provides opportunities, as do other surrounding neighborhoods.

Naturally, subscriptions will complement sponsorships. Pricing begins at $3 per hour with a cap at $24 for up to 24 hours. A $15 monthly or $75 annual fee includes unlimited rides less than one hour, with additional hours being charged at $3 per hour to a maximum of $24. Bikes can be taken one way or round trip, but of course they have to be returned to a Zagster location. Users can sign up on Zagster’s web site or download the company’s app.

For cities spooked by the financial challenges they see in D.C. and New York, Cleveland could present an interesting case study of how to launch a bike sharing program with minimal investment. The truth is, like most public transportation systems, bike sharing loses money. Sponsorships can help boost funds from subscriptions and memberships, but currently belt-tightening is still the norm in the public and private sectors alike. Until we have more data on bike sharing’s benefits — and we will — civic leaders will tread cautiously when it comes to investing in bike sharing programs. Bicycling advocates will continue to tout the reduced number of roads, parking spaces and improvement in public health as long-term benefits. But until cities recognize bike sharing is a cost-effective way to improve mobility along with buses and rail, look for bike sharing models similar to that of Zagster’s to offer both better transportation — and a return on investment.

Image credit: Zagster

Leon Kaye has lived in Abu Dhabi for the past year and is currently spending some time in Uruguay. Follow him on Instagram and Twitter. Other thoughts of his are on his site, greengopost.com.