Dutch cycling culture pumps up bicycle startups

Subscription model

SwapFiets founder Steven Uitentuis said apps such as Netflix and Spotify inspired him to start up the company. “Nowadays, everything is a subscription model, and that’s no longer limited to just digital media like music and movies,” he said. “People want their ‘hardware’, like bicycles, to be available as a subscription model as well.”

Vikenti Kumanikin from FlickBike, said bicycles are increasingly becoming an online product. “With smart locks, GPS and integrated 4G, you’re not really talking about an analogue product any more,” he said. “It becomes something that lends itself perfectly to sharing.”

As well as making high-tech electric bicycles, Urbee uses a similar leasing model as other firms, but spokesman Erik de Winter said the sharing aspect isn’t even the company’s biggest challenge. “We are already far into the sharing economy, so setting Urbee up as a sharing construction was logical,” he said. “It fits in with the behavioural change that is already under way in other industries.”

That is a sentiment shared by most startups. They draw parallels with other services that have succeeded in the sharing economy, such as Uber and Airbnb.

But it is that parallel that may also prove the downfall of some of these startups. Cities in the Netherlands, and Amsterdam in particular, are struggling with regulation. Taxi drivers are furious with Uber, even planning an attack on its Amsterdam headquarters. And citizens of the Dutch capital have been complaining about tourists overrunning the city centre, causing damage and nuisance, and a large part of this has been blamed on the rise of Airbnb. 

Even though Amsterdam’s bicycle startups are not currently a problem, local government already sees an echo of the issues that Uber and Airbnb brought to the city. It is easy to see how bicycle sharing might become problematic in the future, seeing as the city is already overrun with thousands of bicycles, which are left everywhere ,with little oversight.

To avoid the mistakes of the past, the local council wants to impose stringent regulations to prevent too many startups being created. Starting this summer, only three companies are allowed to supply bicycles for sharing, with the number of bicycles allowed capped at 9,000. Also, the bicycles cannot be parked within the main city ring, and are subject to strict requirements, such as build quality and a minimum number of uses.

This could prove disastrous for existing startups operating mainly in Amsterdam. “We have to compete to become one of those three companies,” said FlickBike’s Kumanikin, who added that if his company is not selected, he might close it down. “One of the requirements is that bicycles have to be used a certain number of times, and you have to have a minimum of 1,000 bikes per company,” he said. “That makes it difficult for smaller startups.”

Meanwhile, international startups such as O-Bike, which made it big in Singapore, now wants to expand into Amsterdam and countries such as Belgium and Denmark. “It is easier for these companies to comply with the requirements that Amsterdam sets,” said Kumanikin, pointing out that scalability on an international level helps such companies keep costs down.

Culture of theft

Heavy regulation might be one solution to Amsterdam’s potential problems, but city planners see another – the fact that the huge number of bikes cannot be traced, and that many are stolen and resold for very little money. These two issues are often interconnected, said Sito Veracruz of City Makers, an urban planning agency that is contracted by the municipality of Amsterdam to solve this very problem.

“Bicycles are ingrained in Dutch culture, but so is bike theft,” said Veracruz. “Many people say ‘Well, it’s just something you have to live with’. Only 25% of bicycle thefts are reported to the police, and of those, 30% are recovered if data such as a registration number is available.”

To tackle this problem, Veracruz envisions a system that registers bikes and their serial numbers. The problem is that many startups use their own systems, and local government can’t access this data. “If you want to solve the problems of bicycles in the city, you need interoperability between startups, and you need to make all data public,” he said.