Estimate the number of bicycles required to start a bike sharing operation in a big city.
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Clarification:
- What kind of bicycles? Considering motorbikes for the equation.
- What is the target population? Considering students only for the equation
- How many stations are planned to open in one city? Considering 4 stations for Pune, Maharashtra.
- Any specific geography? Considering Pune, Maharashtra, India, as I am familiar with this city.
- Bike sharing means bike rental? Considering Bike Rentals as per the Indian market
Total population of Pune = 4 Million
Dividing the population into 30% Urban and 70% Rural. (To keep the calculation simple, I’ll only target the urban population.)
Our target is only 30% of the urban population = 1.20 M
Considering only 20% of the urban population is students (target customers) = 9,60,000 people
Considering 10% of our targeted customers will have their own vehical = 96,000
Now, categorising the customers into parts
Fixed customers - who love to travel within the city or intercity and also use it for daily commutes and will need bikes monthly - 50% of the population = 4,77,000
Regular customers - who love to travel once in a month and will need a bike once a month - 20% of the population = 1,92,000
Untouched customer - who may or may not need a bike sharing option - 20% of the population = 1,92,000 (ignore this variable)
Total bikes needed for Pune, Maharashtra - 4,77,000 + 1,92,000 = 6,69,000 vehicles
Each station would require 1,67,250 bikes.
For this equation, let’s consider each bike will be used by 5 customers in different time-interval in that case,
The total bikes needed for each station will be 1,67,250 / 5 = 33,450 bikes for each station and 1,33,800 bikes for all four stations.
Clarifying questions
- Since, I live in Bengaluru can I assume the city as Bengaluru à Yes
- Bike sharing means a platform or operation that would rent out the bikes for small duration à Yes
- Are we thinking about the pedal bicycle or electric bicycle à Let’s say it is manual bicycle, the pedaling one
I am planning to use the top down approach à From total population to vehicle preference à estimating the no of trips per bicycle
No of bicycles required = (Number of people taking bikes/ no of trips per bike) + some buffer
Major potential user segments
- School children – priority
- College children
- Facilities such as inside campus, hospitals, etc
- Working professionals (24 – 40) – priority
- Pleasure riders
Total population = 20 million
Life expectancy = 80 years
1. School children à 10 – 18 years of age (12.5%) = 2.5 million potential users
Assumption: All the children of this age go to school
School travel options
a. Parents pick and drop – 5%
b. School conveyance – 40%
c. Public transport – 30%
d. Walking distance – 10% (40% probable market) à 4% of 2.5 million = 100K
e. Cabs or paid transport – 5% (30% probable market) à 1.5% of 2.5 million ~ 35K
f. Bicycle – 10%
Total market (school students) = 135K
Let’s say a single trip is between 5- 10 mins à Lets say average is 8 minutes
Within 1 hour 8 trips can be done
Lets say morning shift = 100K
Noon/Evening shift school = 35K
- 100K/8 = 12.5K
To cater school students = around 12.5K bicycles are required
2. Working professionals
Age (24 – 40) à 5 million potential user
Travel options
a. WFH à 30%
b. Public transport à 30% ( Target market à 5% of 30%) à 1.5% of 5 million = 75K
c. Own vehicle à 35%
d. Walking à 5% (Target = 40%) à 2% of 5 million = 100K
Total addressable working professional market = 175K
Let’s say the radius of schools and professional space overlap by 40% à 40K school synced vehicle can be used
The requirement for 135K working professionals to be fulfilled
- Since people prefer different time to go to office à consider the stretch of 2 hours
- Each trip of 10 min in 120 mins à 12 users can be satisfied with a single bike
135K/12 = 11K
Total bikes required = 12.5+ 11 = 23.5K
- Assume NYC - population of 10M
- Number of Bikes = Total requested riders / avg no of rides per bike
- Total requested riders
- Average life expectancy 80yrs
- potential target age range 16-45 yrs
- 0.125 m (population in a 10 yr bucket) * 3 = 0.375M
- Assumptions
- Assume 50% live in an area where bike commute is desirable
- concentrating on a downtown area
- concentration of population is more in a downtown area where traditional modes of transport are unreliable
- Assume 70% have a need for a commute that can be done by bikes
- Assumption is that usually people who stay in downtown will most likely work / need to commute in and around downtown
- Assume a typical urban biker would want to cover upto a max distance of 3 miles
- Assume 10% of them prefer biking as opposed to conventional modes of transport
- This number could be higher, many people around downtown could just prefer to walk
- Assume we are the only bike rental company i.e. 100% market share
- Assuming the peak time need is about 80%,
- Assume 50% live in an area where bike commute is desirable
- =0.375m * 0.5 * 0.7 * 0.1 *0.8~ 8k
- Avg no of rides per bike per hour
- Approx duration of 1 bike ride 30 mins
- Approx no of rider per bike per hour ~2
- Total requested riders
- Total no of bikes ~4k
Ques
• Big city LA? -yes
• To start: downtown? – yes
• Manual bicycles? – yes
• App like Uber? Book online, pick a cycle and ride and drop it in another station? – yes
Approach
• Eq: #bikers at a given (peak time)
• Market size
• Mkt share
LA has a population of 18M ppl. With 150 zip codes. So around 1.2M ppl in a zip code (downtown)
Peak time population during office hrs (2x) = 2.4M
# people who would ride bike – segment by age.
Bike uses
- School/univ
- Office goers
- Health cautious
- Convenience downtown dwellers
• 1.2 downtown dwellers:
• 1.2 immigrant DT
Age groups: Kids Teens/young adults Adults old
Ages: 0-15 15-30 30-45 50-80
Residents: .3 .3 .3 .6
Office goers: 0 .2 .8 .2
% to use: 0% 50% 25% 10%
#: 0 .25M .5M ~.1M
Total = .85M ppl could use bicycle
Competition:
• Scooters
• Competing products
• Walking
Factoring those, ~500K ppl will bike
Let’s target a 10% mkt share = 50K ppl.
A person would ride 1-2 times a day. So we would have ~75K rides over day.
The hours of riding will be from 6am-6pm = 12 hrs. so roughly 6k riders per hour
Peak hr use will be approx. 2x the avg. = 12K.
Assume an average bike ride would be 20 mins. So, in 20mins, there will be 12k/(60/20) = 4k riders
So, the company should have 4K bikes deployed in downtown.
- Assume target customers are between (20:45) who are healthy enough to use the bikes and specifically to commute from home to work
- Assume the duration usually starts when the bike is taken and returning back to the stops and the stops are within the city
- Bikes are available 24 hours but there's a utilization rate of 50%
Equations:
- Total market size= Total population* [%] of age group
= 3(m)*0.2
= 600k
- First 3 months focusing on 10% market share= 60k
- Number of rides from and to work= 60k*2=120k
- Duration of a ride between a stop to another per day=120k*0.5h=60k h
- Bike availability per day= 24*0.5=12 h
- Number of bikes should be available per day= 60k/12=5k bikes
Clarifying Questions:
1. Is it an aggregator model using existing bike providers or starting a new one?
2. Are we supposed to optimize the bike sharing for a specific goal? e.g. maximize use of bicycle, acceptable wait time etc?
Top Equation:
# Bicycles required = # people requiring bicycle in peak time / # people served per bicycle at any time with acceptable wait time
Now lets solve this one by one:
1. To solve the first part of the puzzle, we need to make certain assumptions:
Population of a big city 5M
Target users who would use the bicycle sharing
1. Visitors/ travelers (1% * 30% )
2. Daily Commuters taking public transport (10% * 30%)
3. Shoppers (2% * 20%)
4. Students - school/ college (20%*30%)
#2 and #3 would show opposite characteristics over weekdays and weekends. e.g. commuters would be 10% over weekdays but shoppers would be 10% over weekends
# people requiring bicycle per min in peak time = # population require bicycle / peak duration in min
5M*0.01*.3 + 5M*.1*.3 + 5*.02*.2 + 5*.2*.3 = .5M
2. To solve the second part of the puzzle, we need to look at the demand patterns:
Lets say that demand is evenly sparsed in the peak time and the peak duration is between 7-9am in the morning where most commuters and students travel
So peak duration is 2 hrs = 120 mins
Average distance a person can/ will travel on a bicycle = 1 Mi
Average time a person can/ will use a bicycle in peak time = 10 min including traffic time
People a bike can serve per min = 1/10
Acceptable wait time = 2 min (assumption as people may prefer to walk instead of using bike to be in office/ school in time)
People one bike can serve in 120 min = 12
# people served per bicycle at any time with acceptable wait time = 1/5
Now lets feed this into our top equation to get the estimate of bikes required:
# Bicycles required = .5M/.2 = 2.5M
Since we have our estimate at hand, lets double check whether this number seems reasonable.
Bike Required is coming out to be half the size of the population, so we need to go back and correct our assumptions.
Our estimation of the second equation seems correct but the population set requiring bike seems way off.
Couple of additional factors that come to my mind:
1. We have considered the full city population while we could narrow it down to a specific area that we like to target but lets not talk about that for a min
2. Our population number is still the people who prefer to use bicycle for their mode of transportation but we haven’t considered how many of those would be interested in bike sharing service. Lets say this number is 10%
3. Even for the population that is interested in using bike sharing population, our penetration may be slow and lets say we can only take 10% of the market of interested people as there may be other players
So reworking that equation with #2 and #3
# people requiring bicycle per min in peak time = .5M * .1 * .1 = 5K
So revised estimate for # Bicycles required = 5K/.2 = 25K
This number would be reasonable to serve a large city and to penetrate deep into the market. However, company might want to target a smaller area to test their operations out and can actually reduce the bike requirement to an acceptable number.
Assuming the city is Bay area with lets say 100K population. I would divide the request of consumers based on age.
teenagers – Might use bike for fun activity or travelling locally around town. 10% of population – 10k- assuming 10% of teenagers use it for 2 rides a week. – 2k rides
20-40 – working category – 50% of population – 40% use this service for 3 times a week = 100000x 50%x40%x 3 = 60K
40-60 years – 30 % of popoluation use service – 30000 , 20% of this pop use this servie – 6000. Use it 2 a week = 12000 rides weekly
60+ = 1000 rides a week
total weekly rides req = 2k+60k+12k+1k = 75k.
Daily ride req = 10k
Average rides per bike = 3.
total bikes = 3.3K
Let’s assume the population of a large city is 10million. Given ride sharing is suitable for more dense areas, I want to first offer it to the people in busy neighbourhoods (i.e. downtown). Let’s assume 30% of the population lives in downtown. The estimated population of people in downtown would be 3 million.
Now, lets assume the 3 million people have an even age distribution from 0 to 80, meaning there are 3million / 80 = 37.5K people per age year.
There are two groups of people who will use a bike:
– those who use bicycles for commute to work (school) + other things
– those who use bicycles for everything other than commute to work
First, let’s look at population of people who are willing to use bike to commute to work + other things.
Say the target market is in age range of 15 to 45 with the following probability of interested in using bicycles as one method of transportation to work(school) + other things:
age group 15 to 20 – 5% interested in using a bicycle as method of transportation for work(school) + others —> estimated population 5×37.5Kx5%= around 10K
age group 20 to 30 – 10% interested in using a bicycle as method of transportation for work (school) + others—> estimated population 10×37.5Kx10%= 37.5K rounded
age group 30 to 45 – 5% interested in using a bicycle as method of transportation–> estimated population 15×37.5Kx5%= around 30K
Total target bikers population in downtown = 10K + 37.5K + 30K = around 80K
Let’s assume 30% of these people are willing to use bike sharing and 70% prefer to continue using their own bikes. Now, the total number of people willing to use bike sharing for commute to work (Schoo) + other things is 30% x 80K = 24K
Now, if these people use the bike 2 times per week day (it might be slightly higher since they use the bike for shopping too but then they also go on vacation so let’s say 2 per day), they will have 2 x 24K = 48K rides per day. Assume each ride takes 15 minutes, this group does 48K x 0.25 hour = 12K hours of bike ride per day
Now to calculate total number of people in group 2,
First, let’s get an estimate on the total number of people willing to use bicicyle for going shopping / travelling to friend’s place, etc. Let’s estimate the population of this group in our target age range (15 to 45):
age group 15 to 20 – 20% interested in using a bicycle as method of transportation –> estimated population 5×37.5Kx20%= 37.5K
age group 20 to 30 – 30% interested in using a bicycle as method of transportation–> estimated population 10×37.5Kx30%= 112.5K
age group 30 to 45 – 20% interested in using a bicycle as method of transportation–> estimated population 15×37.5Kx20%= 112.5K
Total = 37.5K +112.5K + 112.5K = 267.5K
Let’s also assume 30% of these people are willing to use bike sharing and 70% prefer to continue using their own bikes. Now, the total number of people willing to use bike sharing in group 2 is 30% x 267.5K = 90K
About 24K of people in this group belongs to group 1. In other words, people who use their bike for transportation and not commute to work is 90K – 24K = 66K.
Say say these people use the bike about 1 time per day to do a transportation for 15 min. That would mean they do about 66K x 1 x 0.25 hour = 16.5K hours of transportation per day with bike
So, total estimated bike ride time per day is 12K + 16.5K = 28.5K hour per day.
Assuming that during first 2 months of the bike share launch, company can obtain 10% of target market, it will need to be able to support 10% of 28.5K = around 3K hour of bike ride per day.
If we want each bike to have a utilization of 50% to make sure that there are always some bikes available in the bike share stations and if each bike is used from 8am to 12am evenly during the day (this is a big assumption given many people go to work or school to be in their office or class at 9am), we can say that at 50% utilization for 16 hours a day (time from 8am to 12am), each bike can ride for 50% x 16 hours = 8 hours per day.
Now, divide the 3K hours by 8hours and you get the minimum number of bikes needed to start the company. 3K divided by 8 equals 375.
Another method to calculate this number would be to estimate number of bikes needed to support the bike share members at the busiest time of the day (it’s most likely from 8 to 9). Let’s say that at this time, 50% of the 90K bike share commuters go to work (school). This means the bike share company should be able to support 90K x 50% = 45K bike rides during 8am to 9am time interval. Assuming each ride takes 15 minutes, 45K bike rides translates to 45K x 0.25 = 11.2K hour of bike ride. Let’s say the company needs to be able to have infrastructure to support for 10% of the these rides during first two months of operation, meaning 11.2Kx10% =1.1K hour of bike ride. Assuming bikes are used at 100% utilization, the company needs to have 1.1K bikes at the start of the bike share program.
Assuming City Population: 1,000,000
Dividing the Population into Age Groups:
- Children: 20% of the population = 200,000
- Children are unlikely to use bicycles for commuting, so they are not considered for bike-sharing.
- Old People: 20% of the population = 200,000
- Assuming 10% of the elderly are fit to use bicycles = 20,000
- Young People: 60% of the population = 600,000
- Many young people already own bicycles or are otherwise occupied, so only 50% of them are considered interested in renting bicycles = 300,000
Total Potential Users:
- Old People: 20,000
- Young People: 300,000
- Total: 320,000 potential users
Daily Usage Estimate:
- Assuming 10% of Potential Users Would Ride Daily:
- 10% of 320,000 = 32,000 people riding bicycles daily
Bike Utilization:
- Bike Operation: 24 hours a day
- Ride Duration: Each ride takes 40 minutes
- Rides per bike per day = (60 minutes / 40 minutes) × 24 hours = 36 rides
Number of Bikes Required:
- Total Rides Needed Per Day: 32,000
- Rides Per Bike Per Day: 36
- Number of Bikes Required: 32,000 / 36 = 889 bikes
I like most answers that focus on segmenting users by age and calculating the total number of rides and the number of rides per bike to approach this question.
Before I looked at other people's answers, I came up with a quick estimation for this question and would love to share it and ask for feedback.
Clarification: How do we define "big city"? Can we assume a population of around 8 million, like New York City?
1. Segmenting Members by Needs:
- Commuter
- Exerciser
- People want to have fun
2. Commuters as the Largest Segment:
In this case, we can prioritize fulfilling their needs during peak hours, which is likely when they need the bikes the most.
3. Estimating Working Population:
Assuming 50% of the population in New York City needs to work (estimated based on a family with working parents and two children), we have:
8 million * 50% = 4 million
4. Estimating Bike Commuters:
Assuming 2% of people ride a bike to work and half of them own their bikes, then 1% of the 4 million will ride a bike to work:
4 million * 1% = 40,000
5. Accounting for External Factors:
Given traffic constraints, weather, and other factors, we can't fulfill the needs of 100% of bike riders. Let's assume a haircut (reduction) and say only 80% can rent a bike:
40,000 * 80% = 32,000
This estimation represents the number of bikes needed to fulfill the needs of 80% of working people who want to ride a bike to work in New York City during rush hour. This will also be the maximum number of bikes required out of the three segments, so we don't need to consider the other segments initially.
If the company is new, they can launch an experiment in the busiest area of New York City to test the most effective number of bikes needed.
By bicycles, we are referring to the 2-wheelers which need to be paddled and have gears. à Yes
Bike sharing operation means a business renting out bikes for shorter periods (not really for days) to be used within a city? à Yes
By big city, can I consider Bangalore as I have been staying here for quite some time, so well aware of the city? à Ok
Does this business have any specific objective for usage such as renting out in tech parks or renting out in and around tourist spots? à For any consumer purpose (asked this question as it will have an impact on the initial number of people who can rent a bicycle)
Can I consider people/adults of age above 15 years can rent such bicycles? à Yes
To rent the bicycles, does one need to install any application or send some request prior to renting or can visit the renting spot and pick up any bike? à Can be done in either ways
Should the bicycles be returned to only specific spots or can be left anywhere? à Not literally anywhere but numerous such spots would be made available across the city
Okay, now let’s get into the estimation:
To start the business with optimum number of bicycles, the business should be able to fulfill the daily/hourly needs of such bicycles.
Population of Bangalore ~ 9M
Considering life expectancy of 80 years, a uniform population distribution across age groups, children below 15 years and adults above 60 years will not rent such bicycles,
the population that can rent such bicycles = 9M*4.5/8 = 40.5/8 ~ 5M.
There are 2 key scenarios which should be considered:
a) Demand for mobility is highest during office hours (9am-11am) and (5pm-7pm) but mostly people above the age group of 35-40 years prefer using personal vehicles or office cabs or other types of ride shares but not really bicycles especially because of the traffic and the heat
b) Also, its mostly the middle income family members who would use such bicycle renting service. The lower income families would always prefer using the public transportation and the higher income families would purchase their own vehicles for recreation purpose.
As per (b), let’s consider the distribution of 5M among the low-income, middle-income, and high income be 30% 40% and 30%.
So, people who would tend to rent bicycles be 40% of 5M = 0.4*5M = 2M.
2M people consists of people of age group 15 years to 60 years of age.
As per (a), it’s the people in the age group of 15years to 35 years who would be interested in renting,
So, actual population renting = (4/9) * 2M = 8/9 ~ 0.9M.
They are mainly going to rent for recreation purpose or just to go somewhere nearby.
So, considering a very small fraction just 0.5% or 1% of the 0.9M are going to really rent such bicycles (taking reference from my personal circle of friends and relatives),
Range = (0.5/100)*900000 = 4500 to (1/100)*900000 = 9000.
- When you say abike sharing operation - it means that there is a service designed where users can share a single bike between 2 users
- Is there a number of hours at which they can share
- evry user will have max 6 hours
- Operational hour is 12 hours
- 2 users can share a single bike up to 6 hours each
- When you say big city let us assume india/usa
- Mumbai - 21 Million population
- New york - 75 lakhs population
- when you say bike
- motor bike - yes
- Bycyle
Population = 6 x 10^6
Out of which Daily Commuters (50%) = 3 x 10^6
Out of which Daily Bikable distance commuters (33%) = 1 x 10^6
Out of which People who prefer to use cycles (~20%) = 2 x 10^ 5 (others walk, use public commute or use a car)
Out of which People who do not have their own cycle (80%) = 15 x 10^4
Out of which people who travel during peak time (Assuming 4 hours of peak time) in a day (60%)= 9 x 10^4
No of rides per hour in peak time (4 hours) ~ 20000
If each ride on average takes 15 min, no of cycles needed = 20000/4 = 5000
Sense check: 5000 bikes for 6 million people = 1 cycle for 1000 people (Sounds ok)
Assuming the total population of the city =20M
the main approach
Total nuber of reqest per day= No of bikes x Rides per Bike
assuming the people in the age of 15-50 yrs using this service, that gives around 50% of the populatiopn, i.e 10M
now segmenting the users based on usage:
5 req per week : 10%(5*.1*10=5M)
3 req per week : 25%(3*.25*10=7.5M)
2 req per week : 30%(2*.3*10=6M)
1 req per week : 25%(1*.25*10=2.5M)
0 req per week : 10%(0M)
Total number of requeste per week =5+7.5+6+2.5+0=21M
Total number of requeste per day=21/7=3M
Assuiming a bike average rides per day= 3
Toatl nof o bikes =3M/3=1M bikes required
the main approach
Total nuber of reqest per day= No of bikes x Rides per Bike
assuming the people in the age of 15-50 yrs using this service, that gives around 50% of the populatiopn, i.e 10M
now segmenting the users based on usage:
5 req per week : 10%(5*.1*10=5M)
3 req per week : 25%(3*.25*10=7.5M)
2 req per week : 30%(2*.3*10=6M)
1 req per week : 25%(1*.25*10=2.5M)
0 req per week : 10%(0M)
Total number of requeste per week =5+7.5+6+2.5+0=21M
Total number of requeste per day=21/7=3M
Assuiming a bike average rides per day= 3
Toatl nof o bikes =3M/3=1M bikes required
Step 1: Narrow the scope of the question:
- Let's start this in Pune city of India
- Peak time is 8 AM - 9 AM on a weekday.
- Peak load we cover = 80%
- The average rental time is 1 hour
Step 2: Create the main equation:
The number of bikes required = 0.8 * People who are want to rent a bike in Pune during 8 AM - 9 AM on a weekday.
Step 3: Breaking down unknowns into simpler equations:
The number of bikes required = 0.8 * Population of Pune * ( % of school age kids eligible + No of College age kids eligible ~ 3% + % of Office going people eligible + Seniors eligible )
Step 4: Calculate = 0.8 * 8 M * 8% of Pune population = 64,000 sessions / bikes.
Step 5: Do a sanity check
Let's say each area/region/segment of the city holds 100 bikes.
64,000 bikes mean = 640 top regions of the city will be covered. This seems plausible, but only if the penetration of our service is good/high.
Fun note: China had 23 million sharing bicycles for a population of 1.4 billion.
I would start by arriving at population who can use bikes regularly for commute and utilization of service.
- Population of a big city in India like Hyderabad ~ 1 Crore (10M)
- Target audience who can use bikes to commute for work would be age group 20-50 ~ 50% = 5M
- People who commute to work using personal mode ~60% ~ 3M
- People who use public transport ~40% ~2M
- People who would be needing last mile connectivity 2M * 40% = 800k
- Utilization of our service out of other options(walking/asking for lifts/office transport) for last mile connectivity ~ 20% = 160k
- Average time spent on bike assuming users will use this for short distances ~ 15 mins
- 3 hours (morning peak) + 3 hours ( evening peak) ~ 24 bike rides every day per bike
- For non peak hours let's assume an hour and a half every day ~ 6 rides every day per bike
- Total 30 rides can be served every day per bike
- Total number of eligible bike riders / no. of rides that can be served per bike per day = no. of bikes required
- 160k/30 ~ 5.33K bikes needed
Lets divide the population between the age of 0 to 80 evenly, so per age group 125K people
Lets target the age group of 15 to 35 years so total people who might be interested in using the bike would be = 125K*20=2.5 Million
Having access to a phone is also another factor to be considered, lets say 80% have access to a phone = 2.5 M *80%=2M
Now out of the targeted group, bike will be mostly used for near distance travel and we should also consider there is also an option of metro which is easily available in NYC or can use their own bikes so, assuming only 15% of people would be travelling a close distance to use the bike so 2 Million * 15% = 300K people will use the bike for near distance
Lets evenly distribute the usage of bike over per hour for an entire day = 300K people/24 hours= 12.5K bike rides/ hour
So, required bikes = 12.5K
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