The organizational structure establishes the relationship between the implementing agency, other
key departments and officials in the government, and contractors or partners involved in the
ownership, oversight, financing, operation, and management of the bikeshare system.
Examples of Bikeshare System Structures:
6.1.1 IMPLEMENTING AGENCY
Publicly Procured Systems
In publicly-procured bikeshare systems, the implementing agency is the government entity
that oversees the planning, implementation, and operations of the system. Ideally, this entity
will be located within the agency that has the authority to build out the stations—that is, the
authority that has control over the roadbeds and sidewalks. As the system grows across
political boundaries and integrates with other transport systems, however, this structure
could hinder expansion. In some cases, for example in Indian cities Kochi and Chennai, a
special-purpose vehicle (SPV) for metro rail implemented bikeshare stations at metro stops.
SPVs can also be incorporated at the city or state level to implement a bikeshare system,
facilitating inter-departmental coordination. It may be helpful to consider what a system might
look like in five or ten years, and place the agency accordingly. This will streamline decision
making, growth, and general administrative processes.
Outside of the transport department, other departments that can house the implementing
agency include the departments of urban development, environment, and parks and
recreation, as well as public transport agencies and regional planning authorities. The
implementing agency should be staffed with people familiar with implementing urban
transportation projects, as well as those who specialize in bikeshare. In Mexico City, Ecobici is
overseen by the city’s Environment Ministry. The implementing agency will be responsible for
system design (siting stations or parking areas), tendering and contracting, developing the
financial model, and infrastructure implementation. For tendering and developing the
contract, the agency will need to include performance criteria and service-level expectations
for the contracted entities. This agency will also make decisions about the fees to be charged
and the revenue model, and it will take the lead on community outreach and promotion.
Permitted Systems
Because the government is not responsible for the day-to-day operations of a privately-run
bikeshare system, the implementing agency is largely responsible for planning,
implementation, and enforcement of a permit or other regulatory scheme that ensures optimal
bikeshare delivery by all operators. In Seattle, the dockless bikeshare permitting program is
housed in the city Department of Transportation’s Transit and Mobility Division and is directly
overseen by a full-time bikeshare program manager.
Once the system has been launched, the implementing agency will need to monitor it and
evaluate the operator’s performance according to defined service levels or permit or other
regulatory requirements. See section 6.4: Enforcement for more. The agency will need to
develop a strategy for carrying out compliance checks, and communicating non-compliance
with operators. Annually, or at another regular interval established in the contract or permit,
the implementing agency should re-evaluate performance requirements and make any
necessary changes.
Despite the bikeshare system type, the implementing agency plays the role of referee, keeping
the best interests of the city and customers in mind, while also considering the financial
interest of the operator. To avoid conflicts of interest, the agency should be fully independent
of the contractor or companies operating the system. The implementing agency will also be in
charge of coordinating any system-wide promotional activities following implementation, as
well as planning for expansion. Evaluation of the current situation and planning for the future
are ideally done in tandem.
6.1.2 OPERATOR(S)
Operators can be public or private, and there may be more than one providing bikeshare to a
city at one time. Unlike the implementing agency, which is largely responsible for planning and
expanding the system (although some expansion decisions fall to the operator under a permit
system), the operator handles day-to-day bikeshare operations. Rebalancing is, by far,
operators’ most significant and costly responsibility, with additional duties being to manage
the maintenance and general cleanliness of the bicycle fleet (and stations in station-based
systems). Except in special circumstances, the operator also handles the customer service,
payment processing, marketing, advertising (in some cases), and general brand management
of the system.
This section will cover the differences between bikeshare systems operated by a single or
multiple operators (section 6.3: Contracting Structures details different contracting structures
for public versus private operators). Conventional, publicly-procured bikeshare systems have
typically had a single operator that is either a private company or nonprofit entity selected by
the city using a request for proposals (RFP) process, or is the transit agency itself.
Systems operated by private bikeshare companies under a permit or MOU process can result in a
multi-operator environment that generates competition and, hopefully, a higher level of service
that attracts users and maximizes revenues.
Single Operator
The first decision when selecting an operator is determining whether the operator will be part of
the government, such as the implementing agency, or an external operator, such as a for-profit or
nonprofit entity. A parastatal agency or quasi-governmental operator, such as a transit agency,
that is close to the implementing agency brings with it access to the government and the benefits
of a cooperative relationship. The drawback to such a situation is that public operators typically
lack the incentives to expand and grow the bikeshare system, tending to focus exclusively on
day-to-day operations. Private operators, however, generally bring more cost efficiency, but their
primary objective is profitability, and that does not always align with providing a useful bikeshare
system. When working with a private operator, a well-written contract and oversight are essential
to ensure that the operator meets its obligations to the implementing agency.
Sometimes, governments prefer turnkey projects in which the private operator can set up the
whole project by itself in one large contract, providing both the assets and the operation. Other
times, the government prefers to separate the contracts for the operations and for hardware and
software procurement. This mitigates the risk involved with having just one company that the
government is wholly dependent upon, but it increases the risk of the different pieces not
working well together.
The city should also consider the benefits and challenges of offering exclusivity to a single
operator. For example, a city may offer an exclusive franchise to an operator in return for higher
levels of service or guarantees of multi-year continuity of service, pricing caps or more equitable
service. The operator will likely be attracted by exclusivity because of the potential for additional
revenue, perhaps through naming rights or other benefits. The downsides of offering exclusivity
are that new technologies may take longer to be implemented, enforcement (keeping other
operators out) is complex, and/or that consumers have less choice in the market.
While not as common, some single-operator bikeshare systems are operated by one dockless
operator (as opposed to providing station-based service), under an MOU or contract. This is the
case in Manchester, UK, where the regional transport agency entered into an MOU with dockless
operator, Mobike, to provide bikeshare service as part of a six-month Smart City demonstrator.
Multiple Operators
A multi-operator bikeshare environment can take two forms: 1) one operator manages an existing
station-based or hybrid system, and another (or many other) operator offers a dockless service
or 2) two or more private operators provide dockless bikeshare within a common service area. In
either case, cities should establish a permit or similar process that requires operators to provide
a base level of service while still enabling them the flexibility to be innovative and, ultimately, to
compete to improve service quality.
Using multiple operators increases the oversight capacity required by the city to ensure
compliance, process and renew applications, and communicate policy changes. Cities are
providing the rights of way and public space these operators need to do business, and should
use this position to set operational standards (in an effort to avoid a race to the bottom) that
protect users and ensure progress toward stated goals.
