Millennials are famous for being not terribly keen on owning cars. Instead, they’re interested in alternative forms of transportation, such as public transit, on-demand hourly car rentals, and bike sharing. This is causing a major shift in the way car companies woo customers; January’s North American International Auto Show in Detroit, for instance, marked the first time a car company touted electric bikes among its offerings.
Ansgar Strother, co-founder and CEO of Ann Arbor, MI-based A2B Bikeshare, wants to capitalize on this trend, and he thinks he’s found a better way to approach bike sharing. He says he’s inspired by his own experiences trying to get bike sharing off the ground in addition to watching how other bike-sharing programs, like New York City’s Citi Bike, have unfolded.
Strother’s goal is to turn bike sharing into “an everyday convenience.” The problem, he says, is cost. Programs like Citi Bike involve kiosks that keep the bikes locked until a user swipes a credit card, which cost $4,000 to $6,000 per bike. There are also stationless bike-sharing programs, but they still cost about $3,000 per bike and they lack the structure and branding required to really inspire mass customer appeal.
“We tried going stationless, but it wasn’t as scalable and it didn’t create a brand image or security,” Strother says of early attempts to get his company off the ground. “There were no clear rows of bikes for the customer to identify.”
After plenty of iteration, A2B Bikeshare has hit upon a kioskless “smart bike, dumb rack” model that puts the technology of a kiosk onto the bike itself. Through a touchscreen interface mounted on the handlebars, riders can use a credit card to rent the bike on the spot. The bike-mounted touchscreen also locks and unlocks the bike and offers turn-by-turn navigation. The so-called dumb rack is a simple metal rack with a proprietary locking mechanism that carries the A2B Bikeshare branding.
Strother says by eliminating tracking and locking hardware duplications of the kiosk and consolidating the required technology into one, bike-mounted touchscreen, the cost of each bike is reduced to about $2,000. “I researched our competitors and found that a lot of operations costs come from maintenance,” he explains. “So we figured out a way to crowdsource maintenance, because we found a lot of people in the community were qualified to fix bikes. We certify them to do one-off jobs on demand.”
A2B sells its system to non-profit organizations and municipalities, who then set fees for local users. “People are only willing to pay so much to rent a bike,” Strother points out. “After a while, they’ll just buy their own bike if it gets too expensive. With A2B Bikeshare, the rental costs are set by the community.”
A2B worked with the city of Lansing, MI, to set up a pilot fleet last summer before taking it down for the winter. Strother says it will return in spring, though the company would like to move away from working with municipalities—too much bureaucratic red tape—and move toward partnering with non-profits or small businesses that are willing to provide space for A2B’s racks.
Strother built his startup as a tenant in TechArb, the University of Michigan’s student startup incubator. He graduated from U-M in December and is now focused full-time on establishing his company along with three other full-time employees and a crew of U-M student interns. A2B is currently in the process of raising a $300,000 seed investment round.
Ironically enough, Strother says he’s not a big biker. He just thought bike sharing sounded like a great idea and wondered why it wasn’t everywhere. “My passion is for technology and where it can create new paradigms to better people,” he says. “I want to make money, do good, and make a positive impact.”
