Story URL: http://news.medill.northwestern.edu/chicago/news.aspx?id=220337
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BIKE photo 1

DecoBike

A DecoBike kiosk operated by the city of Miami Beach. Privately-owned bike rental businesses say DecoBike has significantly hurt their sales.


Chicago bike rental shops brace for city competition

by Andrea Mayeux
Apr 18, 2013


BIKE photo 2

DecoBike

Miami Beach's rental program has has been rolling for two years.

Competition is coming for Chicago bike rental businesses, ready or not.

The city is on track to start its bike-share program by June, offering residents and tourists a cheap and easy way to peddle around town. Local bike shops wonder whether it will erode their own rental business.

And with good reason.

In Miami Beach, officials recently celebrated two years of bike share, called DecoBike. At least some rental shops in the market are hurting.

“Every shop in Miami Beach has been affected,” said Alex Ruiz, co-owner of Miami Beach Bicycle Center. In its first year, the city's DecoBike program pushed Ruiz’s rental sales down 50 percent. “Sales are still dropping but at a lower rate.”

Ruiz attributes the hit to the number of bike-share docking stations in the area.

“It’s more convenient,” Ruiz said. “When tourists walk out of their hotels they’ll see bike-share and grab a bike even though they had intended to come here.”

Miami Beach Bicycle Center revamped its business strategy to stay competitive. The shop cut its hourly rental price to $5 from $8, and the daily rate to $14. Ruiz claims this is the lowest-price day pass in town.

To differentiate its services, the shop provides the “bells and whistles” missing from DecoBike: helmets, locks and baskets.

The shop also rents road and mountain bikes, as well as cruisers. DecoBike offers only a single-speed set of wheels.

In fact, in the opinion of Colby Reese of DecoBike, the city's program actually helps the bike shops. He said biking industry figures show that both rentals and sales exploded over the last two years.

“The addition of bike-sharing programs into a community normally has an effect of increasing awareness of cycling and results in increased sales of bicycles at local shops,” Reese said.

The majority of people who use DecoBike live in the area and have memberships. Only 25 percent of users are “walk-ups”, both locals and visitors, Reese added.

Chicago Bike Share riders will be similar to that of Miami’s, according to Ethan Spotts of Chicago-based Active Transportation Alliance, which promotes cycling, walking and public transportation.

“We think a lot of the use will be from people who work in Chicago,” Spotts said. Tourists tend to rent for a longer period of time and a different kind of bike, he noted. Most bike shops, he said, offer a more comfortable seat, nice for longer rides.

Haley Keegan, president of Loyola University’s student-run bike shop called ChainLinks, doesn’t think Chicago Bike Share will hurt business because kiosks aren’t going on campus.

ChainLinks offers $10 daily rentals. A summer membership runs $75. “We haven’t discussed changes in pricing or business structure at this point,” Keegan said.

However, Demian March, owner of Lakeshore Bike, feels differently.

"It's not going to have a positive effect on my businesses," March said. "Anytime the government competes with private entities it makes it tough on us."

March said he's not planning on reducing prices.

Sougata Deb, director of infrastructure for Alderman Tom Tunney’s office, confirmed that the 44th Ward will get 28 Bike Share stations, each holding 15 to 19 bikes.

Daily rental rates will be $7. The first 30 minutes of a ride is free for people with an annual membership. A membership costs $75.

CTA train stations will get Bike Share kiosks, Deb said, along with areas of heavy foot traffic. The locations will be unveiled in the next couple of weeks.