Electric Bike Business Plan for Hayden Island

Overview: This paper reviews the economics of operating a shared, electric bike program on

Hayden Island. A bike has several advantages over a scooter; (1) you can pedal it if the

battery runs low (2) it has a seat (3) a fresh battery can be swapped quickly (4) folding bikes

can be carried aboard a train, bus or car. One $600 electric bike would be purchased which

would have a $75 GPS tracker, a $15 combination lock, a $280 spare battery. An investment

totaling $1,000 is estimated to make $6,500 in 12 months.

The $600 electric bike rents

for $10/hr ($5/hr if hotel

guest). The typical ride is

expected to last about 90

minutes, with 45 minutes of

active biking. The batteries

last about 3 hours of

continuous use. A fresh

battery can be inserted for

the next rider.

Anticipated Revenue: An

average of 3 rentals per day

(generating $10/each) totals

$30/day. Revenue is estimated at $900/mo (summer) and $450/mo (winter), with a one year

average around $600/mo or about $6,500 annually.

Expenses: We estimate life expectancy of the $600 bike to be 4-6 months, although GPS

tracking is expected to minimize loss. Monthly expenses are estimated at $150/mo, including

bike replacement, cell tracking, and management overhead. Expenses are estimated at

$150/mo, with maintenance by a mobile VeloFix van.

Projected Profit: With revenue projected to average $600/mo and expenses averaging

$150/mo, we expect profitability within the first 3 months. First year profit on a $1000

investment is projected to be roughly $450/mo times 12 months, or $5,400/year.

Operational Overview: This bike sharing plan is NOT associated with ANY shared bike or

scooter business in Portland. Instead, we would buy our own bikes from Amazon and make

them available to hotel guests. Hotel guests (or boaters) on Hayden Island could register at

the front desk, using their driver’s license and credit card. The desk clerk provides the guest

with the keys. Full payment is made on return of the scooter. A GPS tracker is inserted into

the handlebar for location tracking.

Scooter and Bike Sharing in Portland: Hayden Island and Kenton do NOT currently have

any bike sharing services (like Nike’s Biketown) or any scooter sharing services (like Bird,

Lime, Skip or Goat).

The low density and remoteness of Hayden Island from downtown Portland make it less

attractive to scooter or bike businesses. However, Hayden Island has four major hotels.

Those guests may want to travel to the Max train, Delta Park, Expo Center or PIR, not to

mention the Jantzen Beach Mall, Lotus Isle Park, Walmart or bike along Marine Drive or

Waterfront Vancouver.

Option 1: Folding bike:

A 20” folding bike like the Vilano 20” folding electric bike ($600) or SwagCycle EB-5 ($500)

can be carried in an automobile, light rail or bus, which is both good and bad. A GPS tracker

in the handlebar keeps track of its location. A folding bike is more practical than electric

scooters which have no seat or pedals. They’re only for short trips. If the battery dies you

have to walk (no pedals). An electric bike enables you to travel further, more comfortably.

Scooters take 4-6 hours to charge.

Option 2: A Full-size Step Through Bike

A 26 inch “step-through” bike could be purchased for about the same price ($640). They may

be preferable than a folding bike or scooter for most people. Importantly, they have more

battery options. Insert a fully charged battery and it’s ready to go.

Optionally, a RadCity Step-Thru Electric Bike ($1700) with a 750W hub motor and 48V 14Ah

(672Wh) battery may perform better with a lower MTBF. https://youtu.be/vSZEOhe-zEA

Would we need a city permit? Many bike shops rent bikes. This plan is no different. Unlike

ALL scooter sharing businesses in Portland, our bikes are NOT dockless. They are brought

back to a hub on Hayden Island and charged. Our bikes are NOT left abandoned on public

sidewalks all over the city.

Advantages of private bike sharing: Bike sharing companies utilize an app to find a nearby

(unused) bike. They don’t have to pay monthly fees to park a bike at night. But they DO have

to pay people $8-$20 per bike to pick up bikes, charge them overnight, and re-distribute them

throughout the city by 7am the following morning.

• OUR private bike business REDUCES bike clutter.

• They’re stored at a central hub on the island and charged at night.

• No clutter. No extra costs.

• More profitability.

Nike’s Bike Share System: Nike’s Biketown bikes DO use a bike hub, but Nike’s bike

sharing system service area is NOT available north of Killingsworth. There is NO bike hub

anywhere near Hayden Island.

Biketown’s service area only extends east from the dense downtown area. Park a Biketown

bike OUTSIDE their service area, in Kenton, Delta Park, Expo, St Johns or Hayden Island,

and it will cost you an extra $10.

Bottom line: there is no bike sharing system anywhere near Hayden Island.

Nike Fees: If Nike comes to Hayden Island (and they could), their fees would not likely be

competitive. Nike charges a $5 sign-up fee and a Pay-As-You-Go fee of 8 cents per minute.

So $5 + 60min x 8cents ($4.80) equals $9.80 for the first hour. Our $5/hr fee (for hotel guests)

would be very competitive...and ELECTRIC! Nike’s rates are below.

The GPS Tracker: We use a GPS tracker inserted into the handle bar. It’s invisible and costs

about $75 with a $10/month cellular fee. Location would be pinged every few minutes.

Location can be seen by the system operator’s computer or phone. Here’s a video of the GPS

system (below), which costs about $60.

Costs:

A. Inexpensive e-bike through Amazon

• (1) NAKTO 26’’ Step-through Electric Bike with 36V 10Ah battery …... $640

• (1) Spare lithium battery with charger ………………………………….... $279

• (1) Keypad Bike Lock with Sharable eKeys ………………………......... $ 20

• (1) GPS Bike Tracker ……………………………………………………... $ 60

• TOTAL …………………………………………………….... $999

B. RadCity Step-through bike:

• (1) RadCity e-bike with a 750W hub motor and 48V 14Ah (672Wh) ... $1,700

• (1) Spare 672W/hr battery with charger …........................................... $ 590

• (1) Keypad Bike Lock with Sharable eKeys ………………………......... $ 20

• (1) GPS Bike Tracker …………………………………………………….... $ 60

• TOTAL …....................................................................... $3,370

Benefits:

• Profitable

• Useful

• Fun

Bike Rack:

A variety of different bike hubs could be used, but we’ll go with an existing bike rack or

structure to park the bike at night. If security is a concern, a $40 U-bolt could be used.

Risk: This venture could easily loose money. Bikes may be vandelized or stolen, expenses

may be higher, and revenues lower.

Let's say CAPEX expenses are higher. The more expensive RadCity electric bike with extra

battery would total $3,500. Let's say revenues are half what we expected, renting out an

average of only once per day at $10/hr, for an average of 90 minutes ($15 per day), so

monthly rental revenue would total $450 or $5,400/yr.

If maintenance expenses are $150/mo ($1,800/yr), plus $3,500 (bike and accessories), that

totals $5,300. With total annual revenue of $5,400, less $5,300 (expenses), that leaves an

estimated net profit at the end of year one of only $100. Actual figures are hard to predict.

Business Options:

This proposal was geared for businesses such as hotels, but it could make sense for friends

or neighborhoods. Sponsorship may also make sense.

A. Neighborhood associations could be operators. A 501(c)3 could generate revenue for

neighborhood investments or for post-earthquake resilency. One possible way of structuring

the deal might be to enable private investors keep all the profit in year one. In subsequent

years, profit would be shared 50/50 with the 501(c)3. The non-profit provides space and a tax

deduction. The 501(c)3 could generate $2,000-$3,000/year.

B. Promotional Income. Both the bike and the hub could be platforms for sponsors.

Just as Nike sponsors Biketown bikes, restaurants, small shops or the Jantzen Beach Mall

could have naming rights system-wide, on individual bikes or on the bike hub.

System-wide exclusive sponsorship might be incorporated into the Hub and each bike at a

price to be determined. Sponsorship at the hub might involve a poster. Sponsorship on the

bike could include ads with QR-codes. Scanning the ad enables a 20% off coupon and

displays a map to the restaurant. At $50/mo per ad, four ads per bike may generate $200.

Advertising could enable practically “free” bike sharing. “Free” (non-electric) bikes would cost

roughly $500 each with $1500/yr maintenance ($2000/yr). But if advertising alone can

generate $200/mo per bike, that's $2400/year revenue. It pays for itself.

Another source of income may be bike parking. EVERYONE is enabled to rent or share their

own bike, parked in the centralized bike hub. The bike owner determines price. Bike hub

parking costs $30-$50/month. With four bikes, that's $120-$200/mo revenue for the operator.

Summary:

This paper outlines a business plan to offer private bike sharing on Hayden Island. It could be

offered through hotels, the Mall, moorages or other communities on the island. It uses

privately purchased bikes and utilizes GPS trackers. I speculate that a $1,000 investment

could generate $6,500 in year one.

• Sam Churchill 503.380.1246

• 12481 North Westshore Dr

• Hayden Island

• http://www.hayden-island.com/biking