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For consumers, the benefits of dockless bike-sharing are obvious: You can take a bike and park it anywhere. For cities, it’s a little more complicated.
Left unmanaged, bikes can stack up and create more congested pedestrian walkways. It’s a big part of why many cities across the U.S. are taking a measured approach to allowing these new dockless companies to enter their markets.
That’s why one company, LimeBike, is beginning to explore developing virtual parking zones. The idea is that riders will be able to locate these designated drop-off spots in the app.
For the uninitiated, dockless bike-sharing works a lot like today’s bike-sharing systems, except you can, in theory, park the bikes anywhere, locking and unlocking them by scanning a QR code with an app. That differs from current bike-sharing programs in places like New York and San Francisco, where bikes are docked to fixed locations.
Today, many bike-sharing players rely on consumers to be responsible and lock the bikes on existing racks or other city-sanctioned locations.
Other competitors like Zagster, which recently launched a new dockless product called Pace, have opted to strategically position bike racks throughout the cities or campuses they operate in.
A primary value proposition for these companies and their investors is the low cost of infrastructure. The money that would have been spent on expensive racks or kiosks can instead be spent on things like manufacturing more technologically advanced bikes and expanding the types of vehicles they offer consumers. In other words, differentiating the service from rivals.
If it works, LimeBike’s method would establish designated parking areas without adding the costs of physical racks to its balance sheet. The company says it is considering partnering with local retailers that would be willing to have a parking zone in front of or near their storefronts, which in turn could drive foot traffic to those locales.
This would require relying on consumers to be willing to walk a few or more blocks to and from those spots that may not always be right next to their destination. To encourage users to park in those designated spots, instead of directly in front of or next to their end location, LimeBike says the company is thinking about creating a sort of incentive program for consumers.
An alternative solution that LimeBike — which recently hit one million rides in the U.S. — is considering is to give a free or discounted ride to people who would be willing to move a bike from one location to another one that perhaps has more demand.
These solutions will come in handy as the company attempts to enter markets that are dominated by entrenched incumbents like the country’s largest docked bike-sharing operator, Motivate. The company and its competitors have been seeing considerable progress even in some of the more difficult markets to crack
Most recently, New York City put out a public request for information to explore the feasibility of dockless bike-sharing systems. The systems will not be allowed to operate where Citi Bike, operated by Motivate, already exists, but if all goes well, the city expects to have a pilot program up and running by the summer or fall of 2018.
LimeBike, which only launched in the U.S. earlier this year, has already expanded rapidly across the country and has plans to launch in Europe in 2018.
This article originally appeared on Recode.net.
