How Many Are Too Many? Analyzing Dockless Bikesharing Systems with a Parsimonious Model

Abstract

Using a parsimonious model, this paper analyzes a dockless bikesharing (DLB) system in a city, where the DLB service competes with walking and a generic motorized mode. The DLB system operator chooses a fleet size and a fare schedule that dictate the utility of its service. The access time to the service---a crucial component in the utility---is modeled as a function of the number of unique bike locations, which is estimated from the number of idle bikes through an empirical relationship. The market equilibrium is formulated as a solution to a nonlinear equation system, over which three design problems are formulated to maximize (i) profit; (ii) ridership; and (iii) social welfare. We calibrate the model against empirical data collected in Chengdu, China and test three counterfactual strategies, each for one of the three design problems. We find: (i) the current fleet limit set by Chengdu should be cut by roughly two thirds in order to avoid severe oversupply and waste; (ii) maximizing ridership keeps the fare at an affordable level to maintain revenue neutrality, while raising ridership and social welfare close to system optimum; (iii) for a regulator seeking to influence the DLB operator for social good, the choice of policy instruments depends on the operator's objective. When it focuses on profit, limiting price is a much more effective policy than limiting fleet size. If, instead, the operator aims to grow its market share, then setting a limit on fleet size becomes a dominant strategy.