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Competition From Electric Bikes

Posted: Mar 23, 2016 6:47 pm
by LockH
... in Israel "Tel Aviv Bike Rental Network Runs Up Against Competition From Electric Bikes" ... m-1.710391

Tel-O-Fun, the Tel Aviv bicycle rental network that lets people go for a spin for an hour or a day at a time using bikes parked at stations across the city, has had a bumpy rise since the service was launched in 2011.

In 2014, the Gaza war kept cyclists indoors for most of the peak summer season and now the company, FSM Ground Services, is encountering a new problem: The huge popularity of electric bikes that have begun to present Tel-O-Fun with stiff competition.

β€œThe use of electric bicycles has grown dramatically and has caused us to lose subscribers for Tel-O-Fun. The brunt of the decline was in the second half of 2015,” said Gidi Altman, chairman of FSM parent company, Fridenson Logistic Services, a Tel Aviv Stock Exchange-listed provider of trucking and freight forwarding.

At the end of last year, Tel-O-Fun counted just 12,100 subscribers, a 22% decline from a year earlier, Fridenson said in its annual report released on Tuesday. Revenues from bike rentals, which are offered on a subscriber and one-time-use basis, held steady at 14.4 million shekels ($3.75 million), but that was only because the service was expanded – 17% more bicycles, a total of 3,500, were in the fleet and the number of parking stations increased 10% to 204.

Electric bicycles and scooters have become wildly popular in Israel, with over 120,000 imported to the country in 2013-15. But the core population of riders, namely teenagers, is likely to fall: Responding to a sharp rise in accidents, the Knesset Economic Affairs Committee two weeks approved raising the minimum age for riding electric bicycles from 14 to 16 and tightened other rules for them and electric scooters.