Cold weather and bike reservations

I was inspired by Tom at Seattle Bike Blog's analysis of the fremont bridge bike frequency dataset to look at my own web traffic data for SMBR. Also inspired by the fact that it snowed yesterday, and that cold weather made a very clear showing in website traffic. Above I've displayed the (normalized) daily site visits in red and the daily temperature high (in degrees F) in blue for the last month 2/22 to 3/22.

The results were slightly surprising -- I had thought that some of those weird spikes, like the drop on 3/12, were due to cold weather. But that one, for example, was not due to a cold day. But the decline in traffic 3/21 and 3/22 is clearly due to declining temperature (and rain, which for some reason almanac.com was always placing at precip = 0 even though my memory tells me that that wasn't true. Need a better historical weather data source). The most clear finding looks like temperature swings are significant and my traffic model is like this -- there's some baseline level of traffic, but a much warmer day bumps it up and a much colder day bumps it down. Smaller temperature changes have no effect.

I hypothesized that website views are sensitive to change in temperature, not just temperature -- if it was 50 one day and then 56, folks suddenly start thinking about biking. So I made that plot (the first day doesn't have data because the n-1 point doesn't exist in this dataset). Here, at least in the later March data, I'm seeing a small day-shift in web traffic. A down-trend in weather forecasts a decrease in web traffic the next day, but only if that temperature decrease is sizeable. I'll be able to prepare more data like this when traffic picks up even more. Of course weather variability will decrease in the summer, so the temperature delta data won't be super interesting.

Case Study: Copenhagen

To understand the global bike rental market I'm going to start doing some case studies, beginning with Europe, because the market there is drastically different. Almost unintelligible to an American, really. Copenhagen and Amsterdam are the most bike friendly cities I've visited, both places where I rented a bike for some or all of my stay and didn't even think anything of it (at the time it didn't occur to me to ask why these affordable and convenient bike rental services don't exist in the US).

There are a few shops with upwards of a hundred bikes that show up in a google search, Baisikeli and cycleborsen are two of the top three (the third is Baisikeli with a different website). Prices start at $13 for a single day rental of a 24-speed bike. Thirteen US dollars. The cheapest rental in Seattle is $30, while a conveniently located one is $45.

I'll do a little table (doing a multi-gear bike in good shape, Baisikeli offers lower-end bikes that seem a bit risky, but are even cheaper):

Shop             Day Week   Month
Baisikeli       $19    $66     $139
cycleborsen   $13   $60     $138
Luca's            $8     ?         ?

These prices use currency conversion from xe.com on today's date 20130319.

Just to make this clear, a downtown Seattle rental shop charges $10 for one hour, $45 for a day, $175 for 5 days  -- lets say you could somehow finagle a week for $220. The day costs roughly 3 (2.3 to 3.5) times more than a day's bike rental in Copenhagen. The weekly rental in Seattle is more expensive than a month in Copenhagen -- it is roughly 3.3 times more expensive in Seattle.

Let's dispose of the first, most obvious explanation -- is Seattle somehow 3 times more expensive of a place to do business? No. Turns out consumer prices are 23% higher in general in Copenhagen (http://www.numbeo.com/cost-of-living/compare_cities.jsp?country1=United+States&city1=Seattle%2C+WA&country2=Denmark&city2=Copenhagen). This effect is opposite the observed price. Just to make this clear, a combo meal is about $12 in Copenhagen at McDonald's and $7 in Seattle.

As for other features of the rental experience, it looks like cycleborsen offers free bike delivery, while Baisikeli only does so for larger groups. A lock is generally included and it looks like a helmet is a slight extra fee (but note that in Denmark most people bike without a helmet, because of their good bike paths separated from cars, and their bicycle injury and fatality rates are actually lower than in the US). Cycleborsen's website is in Danish, and generally less user friendly, but neither one is a very modern website. From looking at the bikes these are slightly less good bikes than what you would get with a hybrid bike rental in Seattle for $45 (or from SMBR). The Baisikeli bikes mostly have 7 speeds, heavier frames, and coaster brakes (pedal backwards to stop). It looks like you would have to pay a bit more to get a better bike like what you would rent in Seattle, or from us. Judging by Yelp, an admittedly poor metric, it sounds like the renter experience is good at Baisikeli, so these are not low-quality enterprises.

One other note, the one biggest website, Baisikeli, is a not-for-profit. They rent standard and budget bikes and move bikes out to shops in Africa where they are donated to those in need of transportation. So they are not an incredibly profitable business, but they are certainly economically sustainable. The other shops seem to be for-profit businesses.

This copenhagen case study shows that bike rentals at $60-$70 per week are sustainable in a city with higher costs, especially labor cost (Denmark doesn't have a formal minimal wage, but $15 per hour is the minimum paid by most cleaning companies, so low end labor costs are very high by US standards). This should be possible in the US at the same rate -- and realistically, given a discount in labor cost and real estate in Seattle vs Copenhagen the prices should be more like 30% lower in the US. If a big mac meal is 40% cheaper here, why not a bike rental? It is very likely that insurance costs are higher here than in Denmark, so that may account for some of the difference, but without knowing the details of the Danish insurance market I can guarantee that that effect is likely less than 20% of the price difference.

Winter Biking

Having moved from Boston to Seattle, winter here seems fairly mild by comparison, and I consider winter to be a great time to bike. Since I tend to get a bit sweaty in the summer, even on a mild 70-degree day, the main advantage of winter biking is comfort and the fact that I can get where I'm going without having to bring a shirt to change into. The downside would be that its more likely to be raining and dark.
So considering the winter biking essentials, I'd say they are:
1) Front LED lights with a bit of range, although in the city it doesn't have to project too far as you're rarely in the absolute dark. I once got stuck on a country road, on a road bike, in the middle of the forest, in absolute darkness; it wasn't even possible to take a step forward and see where your foot would fall. Had to sit by the side of the road until a local bus came by.
2) Rear LED light
3) waterproof jacket, although doesn't have to be particularly fancy, could be a rain-slicker style rubberized cloth
4) mid-weight windproof gloves. I love the ones from seirus. Too thin and woven means wind will penetrate. Too thick and your hands will get sweaty.
5) A thin beany for under the helmet. This can make all the difference in heat retention.

End of list. No need for special insulating top or waterproof bottoms most of the time. As I do all year round if its raining I'll bring an extra pair of slacks or jeans (depending on the outfit) to change into if my pants get wet.

This all raises the question, from a practical and business point of view, why don't more people bike in the winter? It seems to be a combination of lacking good gear -- although most people who have ski gear probably are fine, just need thinner gloves -- and lacking experience in winter biking, having only gone on balmy days. To get around this then requires a bit of gear, the gloves mostly, and someone pointing out that, hey, it might be easy and fun to bike year round.

The last question is how to put this into practice at SMBR. Many ski resorts will rent a jacket, gloves, helmet, pants, goggles, etc. Should we offer a winter package, say with a jacket and gloves and a thin biking hat for a small fee?

Phone reservations are difficult and not worth it.

I have had a number of people reserve by phone. Every one of those people has cancelled or simply failed to follow up and de facto cancelled without alerting me.
My hypothesis is that the web site is clear and understandable, the product is simple and well-explained.  People who see the product and decide they want a bike just reserve using the online system / email. Done. prob (purchase) = 1.
People who see the product and are unsure have to call to better understand what we're doing, or to help assuage the uncertainty. Perhaps they need a harder "sell"? In any event, they have a prob(purchase) < 1, so far prob (purchase) = 0, with a small sample size. So I'll say they have 0 < prob (purchase) < 1, with sample size of 4 (I think the central limit theorem would fail here, so hard to estimate the true confidence).
These considerations lead me to believe that phone reservations are unlikely to result in a sale, and they are more costly in terms to time, so the expected value of phone reservations is very low. Lets say the prob (purchase) = 0.5 and the cost of the phone work is $20.
Then EV = 0.5 * 80 - 20 = $20.
Just not worth it.
On the other hand an online sale requires so work up front and has prob(purchase) = 0.9 after the reservation is booked.
EV = 0.9 * 80 = $72.
That's why I've discouraged them in the future, placing the phone number in a somewhat difficult to find place and only allowing email or online reservations.

Rental durations are short

I've been accumulating thoughts on this business model, so I'll do a few posts.
This one is about the time scale of rentals. So far the 3-7 day rental is most common. The longer rental still seems to be rare, I'm not sure if demand is low for that or if somehow those people don't think to look for a bike rental and can't find the business -- I suspect the latter.
If it is "simply" a marketing problem -- of awareness of this type of business -- then you could hope to find those folks by raising awareness.

more on the ideal rental bike

Right now I'm doing trek 7100s, very similar to the 7.1 but with some suspension which might make it have a broader appeal?
http://www.trekbikes.com/us/en/bikes/town/recreation/hybrid/7100

what is the ideal rental bike?

For brand recognition and quality, seems like it should be a major brand, such as trek or giant. I think for most people in the city a hybrid bike is the most useful (no need for a mountain bike and a road bike is hard to ride and more likely to get flats). Then the question is what are the big sellers? For trek the top seller is apparently the trek 7.1 FX. So far I've focused on the 7100, but the 7.1 is very similar.
http://www.trekbikes.com/us/en/bikes/road/fitness/fx/7_1_fx/