[jellicle]

Not sure how those are counterpoints, in that they are all deeply unprofitable services provided by large governments that are subsidized to the tune of tens of millions of dollars per year. Maybe you should read my comment again.

[SomeCallMeTim]

I'm not sure how it matters that they're subsidized.

Cars are subsidized via road building/maintenance, after all, and it's likely to cost less to maintain a few bikes than it does to maintain roads/parking for the cars that would displace them.

Imagine if there were no transportation subsidies and road maintenance were privatized. A nightmare. It seems entirely reasonable that forms of transportation that can help bring tax revenues to a city are subsidized, and therefore entirely reasonable to create a start-up based in part on those subsidies.

[kazevedo]

HN isn't letting me comment on the reply to this, but in response - our systems can be subsidized if necessary. We're a B2B business right now, and sell to organizations that own/operate the programs. We're working on piloting our own consumer programs in places that are ripe to support them. Ultimately, bike sharing needs to make financial sense in one way or another, and we're confident our system does that.

[jellicle]

I think there's a qualitative difference between a business model that can sustain itself and one that relies on rich backers to dump money into it every year, forever.

Isn't HN usually full of people saying you have to figure out what customers will pay for (meaning, what customers will pay more for than it costs you to provide)? Bike-sharing is not one of those things. End-user customers will not pay you more than it costs to provide.

[SomeCallMeTim]

"Customers" includes businesses -- and governments, for that matter.

A lot of successful start-ups don't sell to consumers at all. And kazevedo comments that they are in fact structured as a B2B start-up. [1]

[1] http://news.ycombinator.com/item?id=4387770

[_delirium]

I agree that cities subsidizing a bike-sharing system can make sense. But that doesn't help ViaCycle, which is going to have trouble if they can't run the system at a profit, since unlike the city of Paris, they can't pay for it out of tax revenues.

[rahulnair23]

Not all bike-sharing schemes have the same model.

For example, DC's capital bikeshare comes from Federal grants that covered the setup costs, while Velib in Paris is entirely operated by JCD, an advertising agency that operates the system in exchange for advertising rights.

Take Velib. Last time I checked, JCD had revenue of $54 million, with an operating expense of roughly $35 million on Velib. The theft and vandalism complaints were regrettably exaggerated when the City and JCD were re-negotiating their contract last year. That they need subsidies to exist is patently false.

Financial aspects of US systems are also healthy as pointed out by other commenters.

On a related note, the subsidies to other modes, mainly rail and roads, are several orders of magnitude higher.