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Summary:

ViaCycle aims to take the idea of bicycles on demand, strip out the pricey infrastructure, amp up the location-based services, and deliver a system that will let universities and municipalities implement bike sharing programs with more flexibility and lower cost.

ViaCycle, a startup spun out of the Georgia Institute of Technology, aims to take the idea of bike-on-demand networks, strip out the pricey infrastructure, amp up the location-based services, and deliver a system that will let universities and municipalities implement bike sharing programs with more flexibility and lower cost.

The company, a semifinalist in this year’s California Cleantech Open, has developed a system that uses wireless communication networks, GPS and text messaging to track bikes within the network, allow administrators to set boundaries on the usage area, and provide services like calorie counting based on distance traveled. Rather than requiring specialized bike racks that unlock with the swipe of a smart card or kiosks for payment (as in many bike sharing programs around the world), users can lock or unlock a bike by sending a text message with their user ID and the tag for the bike.

The idea, explained viaCycle CEO Kyle Azevedo in an interview, is to get rid of one of the big hurdles for large scale implementation of bike sharing programs: the fixed infrastructure. Kiosks and custom bike racks or docking stations require users to find an open space to return the bike, and operators “have to take a guess” at where to put the gear. ViaCycle proposes a different tactic, which Azevedo explained simply: “What if we make the bikes smart?”

ViaCycle came into existence, ironically, after the Georgia Tech student founders lost a bid for a $100,000 Ford Foundation grant in 2008. Their proposal had been to set up a bike sharing program on the Georgia Tech campus, installing more than 200 stations using existing hardware. But when the funding didn’t come through, they realized “a cash strapped university wouldn’t go for that” level of investment for a bike sharing program, said COO Koji Intlekofer. So the following year, when another Ford Foundation grant opportunity — this one for $50,000 — came up, Intlekofer said they “put together an application for what we’d like to see, as students.”

Beyond the hardware, the other part of bike sharing that viaCycle has set out to rejigger is the business model. Intlekofer said the team “wanted to get away from advertising,” and develop a bike sharing model that could be “self-sufficient all on its own.” In the ad-supported model, advertising giants like Clear Channel and JCDecaux often strike deals with municipalities to operate bike sharing programs in exchange for advertising space. According to Intlekofer, these long-term deals — which can involve billboards throughout a city for 10-15 years — end up taking “a lot of control away from bike sharing itself.” There’s not much the city or users can do, he said, if the advertiser loses interest in the bike program.

That said, viaCycle hopes its real customer will be bike-share operators — not consumers — and operators can choose to put an advertising “skin” on the bikes rather than relying solely on subscriptions, usage fees or other pricing schemes. An operator would pay a fixed fee to access viaCycle’s management tool and backend infrastructure, while viaCycle would (according to the company’s website) “help support and maintain any of the sensitive electronic equipment located on the bike.”

At least a handful of possible pot holes lie ahead for viaCycle as it moves beyond the testing phase. Putting the smarts and a “couple pounds” of special gear on the bike and doing away with heavy-duty docking stations in favor of a lightweight automatic cable lock opens a major risk of theft, which could add cost and reduce reliability of the system. Azevedo said viaCycle has found the lighter-weight locks do the job in their field testing on the Georgia Tech campus, but a stronger lock could be used in urban centers.

There’s also the question of privacy. Tracking users’ every move via GPS and recording their calorie count means, as Azevedo acknowledged, “There are definitely going to be some privacy issues for people to work through.” But he emphasized that users personal information would always be anonymized for any location-based services. Plus, Intlekofer added, viaCycle will lay out in the user agreement how any collected data will be used.

At this point, viaCycle is focusing on field testing of its third-generation prototypes and collecting user feedback. The startup will soon be adding 10 of its bikes to Emory University’s existing bike share network, and then begin approaching potential customers. The 6-person team is doing its own circuitry and electronics work, while outsourcing some of the mechanical assembly to local businesses.

When it comes to financing, viaCycle has gotten by so far with that $50,000 grant from the Ford Foundation, an EPA grant and winnings from business plan competitions, as well as support from Emory University and Georgia Tech. But as Intlekofer put it, viaCycle’s now in the process of leaving academia and “transitioning to our own two feet.” Initially, said Azevedo, the viaCycle team thought there was “no way” they’d be able to get to where they are now without external funding. They wouldn’t rule out the possibility of seeking private investment, but they said viaCycle’s not hurting for cash.

Image courtesy of viaCycle

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