Where have all the bikes gone?

Just months ago, dockless rental bikes seemed to be parked on every major street corner in downtown Dallas and Uptown. Pedestrians complained about two-wheelers blocking rights-of-way. City officials grappled with how to address calls from fed-up residents. Some bikes wound up in lakes.

At the peak, an estimated 20,000 bikes were in Dallas. Now, that’s dropped to fewer than 3,500 bikes.

“As quickly as they came in, they disappeared,” said Jared White, the city’s bicycle transportation manager. “It was uncanny.”

The shrinking number in Dallas reflects the economic challenges of bike-share businesses, which are jockeying to stand out from others offering a similar product at a similar price. The bikes provide a cheap and quick way to get around cities and travel the last mile of a commute by bus or train. But while most of the mobility startups are flush with venture capital, they have struggled to become profitable.

On Thursday, Beijing-based Mobike confirmed it was leaving Dallas. It follows two other operators — Beijing-based Ofo and San Francisco-based Spin — which announced in mid-July that they were exiting the market.

Two bike-share companies remain in Dallas: VBikes, based in Garland, and Lime, from the San Francisco Bay area. Bird, a scooter-share company based in Santa Monica, Calif., landed in Dallas in late June.

Mobike is issuing refunds to Dallas riders for remaining credits and moving its bikes to other U.S. markets, said James Liao, the company's director of operations and interim general manager.

Mobike has had several hundred bikes in Dallas as a pilot since December. In an email, Liao said the company decided to leave "due to data we received that reflects a low bikeability of the city."

Dallas has added regulations for bike operators in recent months, but a range of factors could be playing into how many bikes are in a company's fleet. Some, like Ofo, are pulling out of markets across the country and laying off workers. Others, like Spin, which had fewer than 700 bikes in Dallas, are beginning to focus on electric scooters instead of plain old bikes.

It's clear that scooters, since their arrival in late June, have won over some of the bike-share market.

A rental scooter is parked alongside a business poster on Commerce Street in downtown Dallas. (Louis DeLuca / Staff Photographer)

On Thursday, Lola Hassan took a spin on a Bird scooter. The 23-year-old, who lives in a Los Angeles suburb, has rented both a bike and a scooter on business trips to Dallas. For her, the scooter was “one thousand times better” — especially in the Dallas heat.

On a scooter, she said, she can zip around without sweating through her makeup. And, she said, the breezy ride is a novelty.

"You can ride a bike anywhere," she said. "The scooter is the new it thing."

City Hall questions

At City Hall, White, the bike transportation manager, said the seemingly vanishing bikes have been a popular conversation topic. He said he and his colleagues have wondered whether new city rules have had an effect. But perhaps, he said, it’s just an inevitable shakeout of the market or the scorching summer temperatures sapping demand.

In late June, the City Council approved regulations that require bike-share firms to get permits and pay for the number of bikes or scooters in their fleets. The companies also must be staffed to quickly respond to complaints about bikes blocking sidewalks or being abandoned for days.

White said he expects bike and scooter companies to turn in applications for permits within two weeks. Each company must pay an $808 application fee plus $21 per vehicle. Each also must put up a $10,000 refundable security deposit.

“I can see it [the bike total] going back up, but I don’t see it going back up to what it was,” he said.

Dockless bike-share companies first took off in dense cities in China a few years ago. The new kind of bike-share system, which allows a rider to unlock a bike with a smartphone app and park it anywhere, was fueled by innovations in GPS technology, mobile payments and connected devices. And the dockless systems cut costs by eliminating the need for bike racks.

In the past year, six of China's 18 bike-share companies have gone under after running out of cash, according to CBInsights, which tracks private company funding and angel investments. Some of the shut-down companies left behind giant piles of abandoned and broken-down bicycles.

The startups have spread to the U.S. and become a darling of venture capital firms — but they have struggled to become profitable businesses. Investors have poured more than $3.5 billion into bike- and scooter-share startups so far this year, according to CBInsights. The companies have primarily focused on dense urban areas and places like college campuses.

But the bike- and scooter-share companies have not turned a profit — and they have been tight-lipped about how and when they expect to make money.

Targeting customers

Garland-based VBikes became the first bike-share company in Dallas when it parked its bikes at Klyde Warren Park last summer. But as new, well-funded competitors started operating in the city, VBikes decreased its fleet of bikes to 500 and targeted customers who use the bikes for recreation, placing the cycles at parks like White Rock Lake instead of all over, said Kris Alborz, a VBikes spokesman.

VBikes is owned by David Shan, who is also founder and owner of Massimo Motor, a seller of all-terrain vehicles and utility task vehicles in Garland.

Alborz said VBikes' goal is to have the bikes in use about 80 percent of the time during peak hours for recreation — on weekends and between 6 and 8 o'clock on weekday evenings.

But he said the company, which relies on three full-time employees to move the bikes around, also ran into unforeseen challenges. On its first model, the battery on the GPS system was powered by pedaling. If bikes went unused for a while, the GPS did not work and the company had trouble finding the bikes, he said. The company has since added solar sensors to charge the batteries and more advanced chips to help pinpoint the bikes’ location, he said.

Its biggest challenge, though, was the property loss, he said. About 40 percent of its first 1,000 bikes wound up damaged, broken or stolen.

“To actually achieve something that’s in the green rather than the red, it can be difficult,” he said.

But he said VBikes is convinced bike-share can become profitable. He said VBikes may double its fleet from 500 bikes to 1,000 now that Ofo and Spin have left the market.

“We absolutely believe in the dockless ride-share business model,” he said. “We are going to keep fighting, and hopefully we’ll be able to make that turn where bikes are getting less damage, people are using them and the city becomes more bike-friendly.”

He said the number of bikes is falling because of companies right-sizing themselves. “The amount of bikes we had prior to the ordinance being proposed was unbelievable,” he said. “The number of bikes was so large, I don’t think anybody was profitable. Nobody was making money.”

Picking a strategy

At its peak, Lime had about 10,000 bikes in Dallas. Now, it has about 3,000 bikes and scooters — a number that's expected to remain stable, said Sam Sadle, the company's director of strategic development. The company, formerly called LimeBike, launched scooters in Dallas in early July.

Sadle said the changing landscape in Dallas reflects “a maturation of the industry.”

“Like any industry, there’s an initial burst of excitement and a lot of people get in, but it’s an industry that requires a lot of work and a lot of coordination,” he said.

Townview Magnet Center physical education students ride Lime bikes along Blaylock Drive and Colorado Boulevard in the Lake Cliff Historic District in the Oak Cliff. (Andy Jacobsohn / Staff Photographer)

Sadle said Lime is trying to find the right balance between bikes and scooters in Dallas. It has more than 50 full-time employees in the area that help market the bikes and move them around.

“We are learning more about where dockless mobility can be useful and helpful to the city,” he said. “We are new to this business. The city is new to this business. So we are all learning together.”

Sadle said Lime is always watching its ridership metrics and looking for the “sweet spot” — having enough bikes and scooters available when customers want to use them but not so many that they sit unused.

He would not divulge the company’s targets for average number of users or miles per day — but he said Lime has had 6 million rides in one year across its more than 70 markets in the U.S. and Europe. In Dallas, it says it has had more than 220,000 unique riders and the equivalent of 530,000 miles ridden.

Sadle said Lime is experimenting with new ways to boost efficiency and encourage good behavior. It activated new sensors that detect when a bike or scooter is knocked over. Riders must take a photo when they park a scooter. And the company is experimenting with "gamification." It introduced a game called “Parked or Not” to help identify riders who park correctly or incorrectly — and is considering how to reward customers for good parking.

Adam Cohen, a transportation researcher who studies bike-share at the University of California at Berkeley, said the ebb and flow in the number of dockless bikes is typical for a new industry. He said car-share companies such as Car2Go and Zipcar also tested out new locations, pulled out of markets and expanded in others.

“Across the board, bike-sharing and, more specifically, the dockless form of bike sharing is a relatively new model," he said, "and so there’s a lot of experimentation going on.”