Difference between revisions of "Bicycle Economic Issues"
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Source Article: http://www.theatlantic.com/business/archive/2013/02/i-cant-tell-you-why-were-growing-a-new-bike-store-and-the-mystery-of-start-up-success/272812/
Source Article: http://www.theatlantic.com/business/archive/2013/02/i-cant-tell-you-why-were-growing-a-new-bike-store-and-the-mystery-of-start-up-success/272812/
Revision as of 00:01, 5 February 2013
How Can We Make Bicycles Cheaper While Still Keeping Performance?
How Can we make bicycles cheaper? The answer is simple: decrease the amount of material used in producing the components of the bicycle. Most materials are purchased by the pound so therefore less weight= less money. The problem of doing this you decrease the structural integrity of the product. Follow this link to see an example of when accidents like this happen: This is why we can't take short cuts. People enjoy biking, and they use their bikes hard. Bicycles need to be quality products that can withstand large amounts of strain to its components. So let's recap. We need to maintain the performance of the bike, decrease the weight, and consequently decrease the price of the bike. Aluminum and steel are the typical favorites because they are cheap per unit weight and strong. The problem is you have to use a lot of this material so the price goes up quickly. Another choice is titanium. The problem with this material is that titanium ranges between $13-90 per pound! So what can be done to fix this problem?
Carbon Fiber As A Solution To This Problem
One solution is carbon fiber. It has a very high strength to weight ration and therefore we wouldn't have to use as much material to create our product. Another advantage to carbon is it's ability to be weaved with itself in order to add strength. Think of chain mail. Why did the knight's of old use this along with plate armor? It was flexible, and yet very strong. This is the principle of carbon fiber weaves. Here is an example of a new design of carbon fiber weaves that may change the design of bicycles forever because of its high strength to weight ratio. Because of this we are able to use less material and still create a quality product. Construction With carbon fiber is still a little expensive right now but as technology advances the price will drop, and carbon fiber will become the material of choice for bike construction. This is an Arantrix carbon fiber bicycle, and its frame weighs a mere 2.7 pounds!
Are There Any Other unique Solutions To This Problem
The Japanese build have built with bamboo for years. They even use it to build houses! It has been recorded that bamboo houses have stood firm in up to 9.0 magnitude earthquakes. If it is good enough to support the weight of a house even through an earthquake it definatly should be able to support the weight of a human being. Bamboo is one of the strongest building materials. Bamboo's tensile strength is 28,000 pounds per square inch versus 23,000 pounds per square inch for steel. So maybe Bamboo is an option for us to use. If it is stronger than steel and we have been using that for years, we should be able to easily be able to make bikes out of this material. Has anyone had this idea yet and created this type of bike yet? Calfee Design has a whole line of bamboo bicycles, and here is an example of their products.
Cost of Bikes vs. Cars
The debate of whether or not bicycles are less expensive to operate than automobiles is a complicated study. While many may immediately assume that bikes are less expensive to operate than cars, the result is still fuzzy. One analysis by David S. Lawyer suggests "the manufacturing and maintenance cost of a bicycle to be about 4 times as much as the auto per passenger mile."  This is because the bicycle:
- Costs more to produce than a car per pound
- Has a lifetime approximately half that of a car
- Travels less miles than a car in a lifetime (appx. 1/380)
Created by Team Discovery Channel
This article discusses a bike designed by Matt Clark, an industrial designer from California, the frame of which is made entirely from recyclable polypropylene, which provides very low material costs. The design intent is for the bike to be made entirely of recyclable materials, and can be produced almost exclusively by machines, minimizing production costs. One of the production costs this bike will reduce is that of welding. Unlike metal frames which require time consuming and high energy welding techniques, this plastic bike can either be linear vibration or hot air welded. Both of these techniques are much faster and require less energy than traditional welding. The overall assembly of the bike is much simpler as well. Rather than the complicated tab system that Cannondale uses or the glues used by other manufacturers, this bike frame is two simple halves that are just joined together; thereby reducing the assembly costs and skill of the workers needed.
It is Matt Clark's hope that this plastic bike's low manufacturing and low materials cost will not only make bicycles more affordable in the U.S. but also allow developing countries to participate in the many benefits and uses of the bicycle. The environment will also benefit as Clark intends the bike to be not only made of entirely recycled materials, but also completely recyclable at the end of its life; thus reducing landfill space. Several biking enthusiasts and magazines have already shown great interest in the bike. Said Bicycle Design blog reader, Adam, “I even rode it and it works very well and isn't even the slightest bit flimsy!!!! It was stunning.”
If this bike is as well received by the general public, the economic impacts could be very significant both in this country and in developing countries around the world as bicycling would be made even more affordable and environmentally friendly. Only time and society will tell.
-An Archrivals contribution
Report shows $1.5 billion annual impact of bicycling in Wisconsin
According to Wisconsin State Journal, recreational cycle generates a 1.5billion economic activity a year in Wisconsin. Those figures which includes dollars produced by the state’s bicycle manufacturers, suggests that cycling has a significant economic impact as compared to fishing and snowmobiling. Lisa Marshall, spokeswoman for the state Department of Tourism, said the department doesn't regularly study the economic impact of single sports, however tourism officials are anxious to study the cycling report."Bicycling is an important part of the state's $13 billion tourism industry and drives the economy in many communities that cater to bicyclists," Tourism Secretary Kelli Trumble said in a statement. "We look forward to the opportunity to review the wealth of information this report provides." Facts have shown that Bicycle recreation in Wisconsin currently supports more than US$924 million in tourism and resident spending each year, of which nearly $533 million is direct impact occurring annually, such as travel, equipment sales and restaurant expenditures. Not many people are aware that biking can be a factor of economic growth in certain places. State Rep. Spencer Black, D-Madison who commissioned the study said "We make a lot more bikes here than we do cars." In places like Wisconsin, bicycle has become more than just a form of transport but more of business opportunity.
Terry Wilde walks down the ailes of Machinery Row Bicycles to check out the different prices of road bikes available in the shop Saturday, Jan. 30, 2010, in Madison. A UW-Madison report shows the economic impact of cycling in Wisconsin is comparable to that of deer hunting, bringing in an estimated $1.5 billion annually.
Contributed by Group Bicycle
Cost of Riding a Bike
There are many advantages and disadvantages of riding a bike compared to motor transportation. On the one hand, a bicycle is typically less expensive than a car. A bicycle does not require fuel, insurance, and is generally cheaper to maintain. On the other hand, it takes up much more time to travel to a destination on a bicycle than a car. One man who has switched to commuting by bike has calculated the cost of his trips. He has analyzed the cost of commuting by car, bus, and bike in terms of dollars per month. Of course, there are many subjective factors such as time, exercise, and entertainment value that have been taken into consideration, and rough estimation of dollar value has been added. He includes a breakdown of costs with and without these factors. In the end, without subjective factors, it costs $26.67 per month to commute by bus, $64 by bus, and $181.77 by car. You can read his story at the following link.
The Economic Opportunity of Bicycles
Bicycles have a major economical impact on societies. It is not an uncommon birthday present for many children at one point in their life. But bicycles also bring an economic opportunity for the society they are involved in. In a case study by the North Carolina Department of Transportation (NCDOT), Division of Bicycle & Pedestrian Transportation, many key points were mentioned, such as:
- Increased Retail to stores located on bike paths
- Increased Property value of land adjacent to bike paths
- Reduced Healthcare costs
- Improved transportation system, including less traffic, improved safety, and less road wear
- Improved air quality and energy conseravation
The economic appeal of bicycles has developed a need for towns to meet these needs, mostly through the development of specified paths. The report divides the majority into two groups: Local Residents and Tourists. Local residents benefit from an increased safety and a more appeal to draw tourist to local businesses and relocating families to the city.
The NCDOT Report: Economic Impact Summary
A Team Awesome Contribution
Examples of Business Ventures
The Shweeb was invented by Geoff Barnett which is a monorail powered by cycling technology. Riders enter a closed vessel which is hung from a monorail. The rider then uses bike technology to propel themselves down the rail. Shweeb has already secured $1.36 million dollars from investors including google. Currently the shweeb is being used as a ride for thrill seekers in the Agroventures Park in Rotorua, New Zealand. Riders currently race through the 600 meter track achieving speeds of up 60 Km/h.
Potential future costumers include local governments for city transportation and tourism.
Shweeb has many economic advantages over tradition transportation
- Low cost to operate
- No external energy source required outside of human power
- Low infrastructure - takes up very little space
More information on Shweeb can be found at their official website.
Contribution by Team Awesomer
economic value of cycling
This site not only looks at the economic values of bicycling as a monetary benefit, but it also touches on the time saved because of using a bicycle. It even explores electrically assisted cycles, showing the cost/mile for them is 0.10 dollars per mile and opposed to the 1.50 dollars per mile for an American automobile. Many of its statistics are from a world view and often times are found from regions such as Australia. Other data from United States research proves bicycling is indeed cost effective. Cycling instead of buying a gym membership, along with the lower cost of maintenance, and the smaller percentage of materials used compared to a car, are just a few statistics shared that prove the economic efficiency of biking.
This site takes the economic gain of using bicycles from a different perspective. It first looks at the cost of automobiles in New York City, calculating much of the cost from this transportation. From there it goes on to find the amount of money saved if a certain amount of people switched to riding their bikes in the urban setting. Through the article, it proves that, even with a small increase of bike users, the economic gains present will be large.
“And while not every present or potential bicycle mile traveled substitutes for a car or truck mile, the opportunities to increase cycling are so great, and the costs of motor vehicle use so enormous, that even a fractional displacement of cars by bikes can make a noticeable dent in vehicle-related costs.”
Article: http://www.transalt.org/files/resources/blueprint/chapter1/chapter1g.html (under Economic and Social Costs of Motor Vehicles)
Bicycles are an important part of any economy. One often overlooked economic benefit from bicycles is all the riders that tour tourist spots. One example of a community using bicyclists to spruce up its economy is Ruidoso Village. The following article explains this:
Bicycle culture can be an economic tool Ruidoso News (NM) - Tuesday, August 14, 2007 Author: Race in September is a promising new event for county Ruidoso Village Councilor Ron Hardeman gets it: At a recent council meeting, the two-term incumbent noted that cycling can be an economic development tool.
We don't doubt that the council as a whole and the village get it, too. Prosperous tourist destinations throughout the mountain West are coincidentally havens for recreational opportunities, and a strong bicycle culture, with its healthful overtones, is often part of the equation.
To that end, the Bicycle Ruidoso Club is sponsoring its first Century Race on Sept. 29. The 100-mile event is expected to draw two-wheelers from throughout the region and state, which should pump dollars into the economy and help Lincoln County polish its recreational badge.
Just as motorcyclists are drawn to the region for its scenic, twisting and low-volume roads, so are bicyclists. Yet bicyclists face innumerable dangers and obstacles in pursuit of their sport and pleasure.
Ideally, all new road projects in Ruidoso will come equipped with bicycle lanes and proper signage. And hopefully, the state and county will see the need for lanes and permanent signage where appropriate.
We wish the bicycle club success on its race and hope it heralds a vigorous and safe future for our cycling culture. Section: Editorials Record Number: 6625033 Copyright (c) 2007 Ruidoso News (NM), a MediaNews Group Newspaper.
Many communities throughout the US sponsor bicycle events to bring in large number of tourists to the area. As stated in the above article a 100 mile event was created to boost their economy but the benefits were going into future endeavors to continue the community’s draw for bicyclists. The community noticed that bicyclists face several dangers while enjoying their rides, so the community was planning to improve bicyclist conditions. The fact is that a large percentage of people enjoy cycling and touring all over the world. This group of people makes a prime economic draw for communities.
The United States Bicycle Industry
This report by the National Bicycle Dealers Association (NBDA) on The Bicycle Industry in the United States shows us that the industry has been steadily recovering from the sharp fall in sales between 2005 and 2006. Sales of bicycles of all sizes have increased by 1.6% and sales of bicycles with wheel size 20” and up have increased by 4.6%. The Industry value has increased to $6 billion, which is a 3.3% increase since 2006.
The Sale of bicycle units is still dominated by mass merchants (REI, Wal-Mart, Target, etc.) with 74% of all the bicycle sales, but they only account for 34% of the dollar value due to an average sale price of $80. Independent stores (a.k.a. specialty bike stores) have about 17% of the bicycle sales but they account for 50% of the dollar value due to their average sale price of $500. Independent stores achieve such a high dollar value because they sell much higher quality bikes, parts, and services than a mass merchant retailer. The rest of the market belongs to chain sporting goods stores and “other” retailers.
Participation in bicycle related activities have also increased. According to the National Sporting Goods Association 44.7 million people ages seven and up have ridden a bicycle at least six times in 2008. This statistic is up 11% from 2007 when only 40.1 million people rode a bicycle six times in 2007.
Created by:Jeff Dreyer
Neighborhood Bike Works Bicycle Donations for Kids
The Neighborhood Bike Works organization, with four locations in and around Philadelphia, is a non-profit organization that offers bicycle maintenance classes to all ages. The organization accepts donations from the community and offers underprivileged kids an opportunity to earn themselves bikes, helmets, and bike locks by completing a bicycle repair class. By providing such opportunities for the youth of Philadelphia, NBW is introducing them to an economically efficient mode of transportation that adds to a healthy lifestyle, at no cost to the kids. Similar such organization exist in cities all over the U.S., including Pittsburgh's Free Ride DIY Recycled Bike Collective. At Free Ride, volunteers put in time at the Collective and therefore there are no wages to be paid. The operations at NBW and Free Ride operate at essentially no cost, since bicycles and bicycle parts are donated and then repaired and earned by those looking to obtain a bicycle but can't afford to purchase one.  
Created by Mike, Jordan, Dongao, Andrew, Ken
The Bicycle: An Important Part of Today’s Economy
Each year, the bicycle industry contributes about $133 billion to the United States economy. Not only providing over a million jobs, but bicycles also produce $17.1 billion in taxes. Since cycling is a popular hobby in the United States and other countries, nearly another $50 billion is spent for bicycle related recreation and trips. Studies show that state and local economies can benefit greatly from promoting and investing in bicycle facilities. These facilities generate tourism which in turn supports business. Because of the added support to business, a boost in employment also occurs. In 2000, Colorado Department of Transportation found that $1 billion was contributed to the economy by bicycles and related sales and events. It was also determined that $34.1 million had been paid to the 1,213 employees working in a bicycle related field. Many other states also have had similar results, those of which include: Wisconsin, Maine, Oregon, and North Carolina.
Accommodation for bicycles is much less expensive and productive than automobiles. Bicycle lanes can hold as many as 12 times as many people per meter of lane per hour than cars. The bicycle lanes are also much less expensive to install. 
Created by D. Jarrett, A. Ritchey, C. Mack, E. Soring
Bicycle theory of economics
The meaning behind the bicycle theory of economics has become twofold. First, there is a very literal meaning to the phrase. Organizations like the World Bicycle Relief, who said "Bicycles make individuals and economics go," are working to increase the economic standing of countries around the world directly through bicycles. Some organizations give bicycles to people in Africa, teach them how to repair the bikes, and also teach them how to manufacture them. By doing so, the organizations are not only increasing the African transportation capabilities, but they are increasing their own economic capabilities, thus increasing the participation in the world's economy.
The other side of the phrase can be seen from a more figurative standpoint. Bicycles can be used to describe the operation of our economy. When operating a bicycle, much work is needed to get it started. Once it has some momentum, the rider does not need to exert much effort. However, as the bicycle begins to slow down, the rider needs to take more control and keep the bicycle from crashing, as it tends to wobble when losing speed. Our economy is very similar. It needs effort to get it going, but once it is up, things tend to run smoothly with little effort. Then, when it begins to slow down, the government is needed to step in and make sure it doesn't crash. 
Created by Team PhSU
Economic Impacts of the Revolutionary Electric Bicycle
The Electric Bicycle conversion system has the potential to have an incredible impact on the economy as a whole. Focusing on elements of cost, one can purchase an electric bicycle kit for around 600 to 800 dollars depending on the performance desired. If this same person went out and bought a new bike to complement their electric bike kit, this would add an additional 200 to 400 dollars onto the bill for a moderately priced bicycle. Combining these costs the total price would be around roughly 800-1200 dollars. This amount of money is probably not enough to buy a cheap used car with over 100,000 miles on it. This savings alone would give the average person 20-30 thousand dollars of spending money to use in other areas of the economy.
Once in use, the economic impacts compound. On average driving a car to work even in a city environment will cost around 15 to 20 dollars a week in fuel alone. If one were to ride an electric bike to work for only 5 months out of the year, they would save enough money in fuel to buy a new bike and conversion kit every other year. If enough people were to convert to electric bikes it would also drop the demand for fuel and therefor lower fuel prices.
In congested city locations, it is actually faster to ride a bike to work that to drive a car. Not only is it less of a hassle to deal with parking, but riding a bike on average will save around 20 minutes each way due to stop lights and traffic congestion. A race of the same commute using a car and an electric bike is documented in the u tube video link below. http://www.youtube.com/watch?v=FfyJZ6lTm84
Not only did the bike rider arrive to work 20 minutes earlier than with the car, but he was much more relaxed and motivated to start his day. The electric bikes will stimulate employees to be more enthusiastic on a daily basis as well as have around 40 more minutes every day. This amount of time alone would be enough to dramatically increase productivity in any company.
Team: Amy, Jason, Josh
Economic Impact of Investments in Bicycle Facilities
The North Carolina Department of Transportation (NCDOT) Division of Bicycle and Pedestrian Transportation (DBPT) commissioned a study to examine the value of public investment in bicycle facilities. The northern Outer Banks region was selected for the study because of existing high levels of bicycle activity and the presence of an extensive system of special bicycle facilities. Over the past ten years, an estimated $6.7 million of public funds was spent to construct off-road paths and add wide paved shoulders to roads in the region.
The study concluded that:
* Bicycling activity in the northern Outer Banks provides substantial economic benefis to the area: an estimated $60 million annually. * The bicycle facilities in the area are an important factor for many tourists in deciding to visit the region. * Investment in bicycle facilities improves the safety of the transportation system for all users and also benefits health and fitness, quality of life, and the environment. * 53% report bicycling as a strong influence in decision to return for subsequent visit. * 43% report bicycling as an important factor in selecting this area for vacation.
The entire article can be found at 
Economics of Bike Theft
Bicycle theft is rampant in the world. According to the National Bike Registry and FBI, $350 million worth of bikes are stolen per year in the United States. According to the source it is an extremely low-risk crime to steal a bike, and it can yield a large reward. The low probability of being caught by the police or confronted by anyone for that matter is exemplified in the link to the New York Times video that is provided in the source.
Bike thieves can range from small time crooks who will steal anything from a $50 bike to a $2000 bike, and sell them on the streets at fencing spots for 5 to 10 cents on the dollar. To master bike thieves who steal the most expensive bikes and sell them on the internet for fair market prices.
The article is found at 
Contribution from: Chris, Zach, Aaron, Jeffrey, Joe, and Hussen
Economics of Starting Up A Bike Shop
Three friends in San Francisco decided to start up a bike shop in an area where frankly there was no shortage of bike shops. However, they somehow managed to make their store, called Huckleberries Bicycles, a huge success. What did it take to get this business started, and how did they become such a huge success? First off all, starting up their bike shop required about $300,000-350,000. Some of those expenses came from rent which was $6,000-8,000 per month, $100,000 in renovations, $75,000 for the initial inventory, $50,000 for miscellaneous expenses, and a $100,000 buffer. In addition to expenses, they had to speak with bicycle manufacturers and figure out who they were going to buy from and sell in their store. Fortunately, most bike dealers will give the store some form of credit with 0% interest for a short time to help you get going. So what was the trick that made them so successful? One the government actually helped out with Huckleberries. The reason for this being that they were starting up this bike shop in a bad area full of drug addicts, prostitutes, and thieves. Because of this the government lent a hand and connected the store owners with a lender who underwrote their loan as well as introduced them to the person who would become their landlord.
The next step was advertisement. Using Google, Facebook ads, and other online advertising, they got their name out. They also use an online inventory management system that only cost $50 a month and works perfectly for bike shops.
With a little bit of luck, a lot of hard work, and some economics these three friends were able to successfully start up Huckleberry Bicycles
Team: Adam, Rachel, Mohmmad, and Josh