CEO and Co-Founder Zagster
Throughout the world, and specifically in the US, we've really seen a shift to making urban environments more dense. Bicycling is really the fastest and largest growing form of transportation in the US.
by Heidi Legg
Notice the bike paths these days? There is bike traffic at stoplights and they seem ubiquitous in any big city allowing tourists and local alike to hop on and off whenever they need, today. Paris and Montreal were early to the game of community bikes where you buy a card or membership and now more and more American cities and campuses are adopting what has long been the norm in Beijing and Amsterdam. Is this the Millennialization of the way we live and work?
Tim Ericson, Co-Founder and CEO of Zagster, one of the largest bike sharing companies in the country, based near Kendall Square in East Cambridge, says the Millennials are a driving force. Zagster and their team of mechanics are supplying and servicing many of these new biking cultures across the country. Ericson, a millennial who believes in bikes, climate and neighborly sharing, talks to us from his startup office in Kendall Square.
What are you working on?
We want to become the standard in bike share everywhere except for the largest 15 cities in the U.S.
Why not those cities?
They're looking at big citywide models. Here in Boston, we have Hubway and that model really works for a dense, urban area. Zagster is focusing on bringing a solution that works for the rest of the country. In a similar way, New York and Boston have a subway, but that doesn't mean Yale or Duke University need to put in that sort of infrastructure, and they look to alternative solutions like bus rapid transit systems and others to be able to solve their transportation needs. That's where we fit in.
We typically go after communities rather than isolated locations. Early on, we started with hotels and individual apartment complexes, but we really found that to have a successful bike sharing system, you really need to have a community. I think a better example in Cambridge would be that we're at the Discovery Center out near Alewife, not really covered by Hubway, and they have lots of businesses and residential out there and were looking for a bike sharing solution that really fit for that community. That's a better local example of an option.
I saw that you were in Cleveland, Ohio and that they were the first city to be civically driven for a bike share. Is this true and how did it happen?
I think Cleveland was a good example of a city that traditionally looked into what Boston and New York were doing and the models didn't really work for them. The citizens said, “Look, we're really interested in bike sharing and we don't want to wait three to five years for the government to find federal funding and other ways to fund this. We want it now,” and so this is actually the launch of Zagster getting into public cities. Prior to this, we had created bike shares for corporate and college campuses and now were really focusing on those communities. We found that sort of small-to-medium size cities were a really good fit. Since then we've launched in Albuquerque, New Mexico and places outside Atlanta, Fort Collins, Colorado and a lot of other small-to-medium size cities in the US.
Do you go to them or are they now coming to you?
There's a lot of inbound. We've really made a name for ourselves in the bike sharing space in the communities that we talked about and I think that everybody is looking to provide better transportation options, whether it's a small-to-medium or a university. They're always trying to compete with others in the state and so bike sharing has become an expected amenity in urban environments throughout the world.
Why has it proliferated?
Throughout the world, and specifically in the U.S., we've really seen sort of a shift to making urban environments more dense, and so actually over the last decade we in the U.S. have seen a 100 per cent increase in the use of bicycling as a form of transportation, which is really the fastest and largest growing form of transportation in the U.S. Could you imagine if in the last 10 years there was double the amount of cars on the road? So, bicycling is really the only form of transportation that can sustain that sort of growth and there's still a lot more to go.
Why is this happening?
I think the Millennials are a big push out there. I think a lot of people are not really interested in owning a car and while gas prices are low today, they're not going to always stay low. I think it's more just about the hassle of owning a car. I’ve personally never owned a car. I've lived in major cities. I use bikes as my form of transportation to get around and I think with services like Uber and others who are filling in for days like today when it's pouring rain, there are options to not own a car and think that shift is allowing this whole multi-modal transportation phenomenon to take place.
What is the multi-modal combination being used today? What is the combination of transport used by Millennials today?
We do a lot of work in downtown Detroit. I speak a lot there and I like to get on stage and really start off saying that the car is no longer king, especially in Detroit because you hear the gasp from the audience… but I think the difference in what we're seeing today and really even what the car companies are starting to see is that Millennials and other people living in dense, urban environments are getting up every morning and saying, “I have to go to work. I need to go to school,” or wherever they need to go and they're deciding that day for that particular instance what's the best way to get from point A to point B. I think that difference has opened up this whole multi-modal shift. No longer are people just hopping in a car and driving to work. They're saying, “Oh, it's raining today. I want to hop on the bus,” or “It's a beautiful day. Why don't I walk or take a bike?” and so that sort of shift in mentality is starting to happen with the Millennial generation and we believe it's going to continue to happen moving forward.
When you look at the more northern states of the nation or Canada, winter weather can wreak havoc. How does winter affect biking growth in northern areas?
You'd be surprised. If you go to Montreal in the middle of winter, you'll see a lot of people wearing ski goggles and riding like a normal day. While obviously biking goes down in the winter and a lot of casual users no longer ride because it's not as convenient for them, I still think we've seen a lot of interest in biking throughout the winter. Cambridge is one of the first: the only city in the Boston area that has Hubway and actually operates the program through the winter because there is such a demand for it. Boston and many of the other cities and Brookline actually close their systems for the winter. In the last year, especially with this winter we've had in Boston, you pretty much could've ridden a bike all but ten days comfortable.
How does it work with the mechanics you have on call? I see that you not only white label bikes but you have a maintenance network. How does this work?
So that's really the secret sauce at Zagster. We've been creating a nationwide distribution and maintenance network for bikes that doesn't exist today. What we're able to do with the mobile phone is we hire and train a mechanic and when there's a flat tire at say, one of the Zagster bikes at Duke University, we actually send out a notice to the multiple mechanics we have in that area. The first one that's able to come and actually fix the bike and accept the job, they come and fix it. We use their mobile phone to make sure they're actually on location. They take a picture of the bike for our records and then it's all paid through that system and so we've been able to create this and we've hired over 150 mechanics around the country.
Do you run that service arm the way Uber runs taxis?
Similar. It's not as on demand as ordering an Uber and having it show up at your house in five minutes because we have a lot of bikes in the fleet. A 24-to-48-service time is typically acceptable for servicing the bikes. What we're really offering is additional income for a lot of people in the bike space that are really passionate about bikes. There's typically not enough full-time jobs at a bike shop to really provide a stable salary for somebody to live on. As a result, we’re actually able to tap into people who are really skilled, really smart and really dedicated who really care about bikes and we've been able to find over 150 of them around the country, train them and some people are doing this as their full time job.
One of the things that I look upon enviously as a GenXer is this mass population behind ideas brought forth by Baby Boomers or Millennials, like computers, climate change, or bike culture. What are some of the other factors that perhaps make this moment in time happen?
I think it's a lot of different factors that culminate all together to really form this shift in the way people are thinking. I think you hit the nail on the head on a few of them. I think environmental factors are important but it's usually not the main driver of why people shift their thinking.
Our mission at Zagster is to make biking the most loved form of transportation and we do that by making access to bicycles really easy, streamlined, and cost-effective so that Millennials can just hop out of their house, press a button, get access to a bike, and go where they need to go. I think that when you offer a service this way, we have found that a majority of people will actually ride a bike. In some of the cities like Detroit, we've found that over 90 per cent of Zagster members had never ridden a bike in that city before. This isn't converting your average cyclist who just wants to go around and ride a bike all day. We are converting your average person who simply needs to get from point A to point B.
How would you describe your employees?
We do have a mix, but I would say we tend to skew towards the young Millennials and I think it's because most people who really believe in this mission are from this segment of the population. If you look at companies like Zipcar, headquartered here in Boston, they had a similar demographic early on and were really pushing for social change and we're starting to see the same thing. A majority of our employees ride their bikes and they live within two or three miles of Zagster's headquarters and they love coming in every day because they're doing what they love. I think we're starting to see that shift and people really embracing this movement.
How would you describe Zagster's culture?
The startup culture in general is typically a more fun environment. We're looking for people who are really dedicated and believe in our mission and we're finding people that were in large Fortune 500 companies doing accounting and people who were coding for really large companies.
I'm an avid cyclist. I love this mission. At the end of the day, we've had people take pay cuts because they really want to be here at Zagster and they really believe in the mission. I think that's been ingrained in our culture since day one. Not everybody is an avid cyclist, but our mission is to make bicycling one of the most loved forms of transportation and by doing so that it actually appeals to a broad range of people.
But how do you work specifically here at Zagster? What’s the vibe?
We believe in a work hard/play hard mentality. In the last month, we took our quarterly off site up to Flatbread in Davis Square and did some candlepin bowling. What surprised us is some people who were generally more quiet in the office really came out of their shell by getting really competitive, which is really fun to see. I think it's probably too far to say we're a family…but I really feel that way because I enjoy coming to work every day and since 2012 when we started rolling out bikes, there's not been a single day I haven't been excited to come in.
What colleges and corporations do you supply?
We have over twenty colleges around the country. We have Duke University, Yale, Princeton. In terms of companies, we do work with General Motors, Sales Force, Workday. We also work with some of the largest real estate developers around the country including Irvine Company, Related Companies and a lot more.
How are negotiations going with them?
It's going well. I review a lot of contracts. I thought I wanted to be a lawyer when I was in college and did pre-law and I'm really glad that I didn't do that. Our lawyer on the other side of the table goes through it a lot more deeply than I do.
What did you do before starting the company?
I've had a variety of different jobs. I didn't really know what I wanted to do when I grew up. I went to culinary school and I worked in a few restaurants and quickly realized that while I love doing it, it's not something I wanted to do for the rest of my life in terms of professional environment. I went to school for business and IT and pre-law with a business degree at Drexel University in Philadelphia: similar to Northeastern here in Boston that they have a co-op program and that really helped me try to figure out what I wanted to do with my life. I worked at a small company, a Fortune 500 company, and realized that I could do a lot more in a smaller company and have a much bigger impact.
That drove me to starting Zagster and I happened to be studying abroad in London and traveled to Paris for a weekend back in 2007, the weekend they launched Velib, which was the world's largest bike share at the time with 10,000 bikes and I was completely fascinated by the concept of being able to stick in a credit card and go around a city and explore. I said, “This is going to come to the U.S.” and that's how we started getting into the place.
What will you do next?
That's a good question. While I definitely think about Zagster all day, every day, I think travel is pretty important to me and I think that there is a lot of opportunity for disruption in the travel space.
I just got back from Cuba. I wanted to see it before they officially opened everything up and there was a Starbucks on every corner. I spent a lot of time researching on how to get there legally and make sure that we were following all the rules and I think that there is going to be this whole thing with Millennials where people want to experience things outside of your bus tour in a city and really want to experience something new. I think Cuba opened my eyes up to that and I think there is an opportunity in that space to really start cultivating trips around really interesting destinations.
What did you see in Cuba?
A lot of bikes, actually. When you think of Cuba you think about cars from the 1950s, but there's actually a lot of bikes on the ground that have probably been there since the 1950s. It's a Third World country at the end of the day. It's a beautiful country – a lot of architecture – really interesting things to see, but you're walking down a street and people don't have running water and they're using buckets to get it from taps in the street and you realize how lucky you are to be in a country where that's not happening.
I think that what's really interesting is that a lot of people are really, really excited for the changes that are coming and I think that is something that struck me. We had a really interesting guide who is a professor at one of the universities in Havana and he talked about how most Cubans don't hate people from the United States. They understand that the governments have had issues and frankly Cuba has never really had a stable government, but they don't hate the people and I think that you're going to see a lot of Cubans embracing a lot of the changes that are coming.
Did you eat in private residences?
That is the place to go. I have found that in Havana the cheaper you go, the better the food. I've eaten in somebody's home with five seats and paid probably two dollars for a dinner and it was one of the best meals I had in Havana. We almost exclusively ate in what they call paladares, which are small private restaurants in people's homes.
What public opinion do you want to change?
Since we want to make bicycling the most loved form of transportation, I think the biggest thing I'd like to change in public opinion is really around how bicycling could actually impact your average commuter who drives from point A to point B. A lot of people are open to giving bike lanes to people and investing public dollars in bike sharing programs, but what you see is actually a reduction in car use in cities all throughout the world. This has been proven time and time again, but if you ask people if they would support spending taxpayer dollars on bike sharing systems or just bike infrastructure in general, I would say that a majority of people would say no.
Changing that attitude that biking actually helps reduce congestion in cities and allows you to have a quicker commute. I think that would be the big thing I'd change.
What part of the country is amenable to that?
Boston and Cambridge are probably more progressive than the majority of the rest of the country, other than places like Portland, Oregon. Biking is really ingrained in their culture and somewhere like Copenhagen.
I think that on my commute from Inman Square to Lechmere there are typically more bikers waiting at lights in the morning than there are cars, which is a really cool thing to see. I feel really glad that I ended up in Boston and could be part of a culture that I believe is something that could really work across the country.
Which cities do you most want to convert?
I think Detroit is on my list and we're starting to do that already. These are people whose entire livelihood has been traditionally around cars and that's probably the toughest ones to convert, which is probably why they were one of our first customers and then we focused on them.
What about LA?
I would love to convert LA as well but I think the sprawl is the harder part for biking and bike share in general. I think that at least with Detroit – especially in the downtown area – it’s more compact whereas LA is spread out. I think LA would be a tough one but I hope so.
Let’s talk about my parents. They are living longer and want to be mobile. Is there a technology that helps older people pick up biking?
Actually, we just started launching tricycles into our bike share fleet. We first launched them in Carmel, Indiana because the mayor was really forward-thinking and wanted to have options for people who don't have this for the elderly generation. We then launched them again at Ohio State University because they have one of the largest hospital systems in the country. ADA-compliant bikes were something they were really interested in but this is something that we think could actually work really well in retirement communities and other locations and so as we continue to work with real estate developers around the country, we've always been eyeing the active living communities.
I think making the process really simple to unlock the bike and all that are the same sort of reasons why the Millennials are interested in riding a bike and if we can reproduce that in another demographic, I think you could do it as well.
Are you involved in the design of that tricycle? Does it have some sort of technology?
Right now we are sourcing one but we work very closely with our bike manufacturers in general to continue to improve on the bike. We're one of the largest purchasers of Fuji bikes in the country and every time we order a bike, we learn a little bit more about what works and what doesn't. It's sort of a testing ground for Fuji to continue to improve their bike and a lot of the improvements that we've made have made it to their sort of off the shelf models as well.
What about local Cambridge CIC startup GeoOrbital Wheel and their electric wheels?
The pedal assist bikes are the ones that really help people who are basically riding up a hill feel like they're riding down a hill. I think that's a really interesting technology to be able to open up demographics for biking as well. I think that's something that could be added in the future to bikes that a retirement community or even bikes in locations like San Francisco – where even I wouldn't ride.
I think the challenge right now is getting the technology down to something affordable that the average person can buy. I think that in bike sharing in the next few years you're going to see pedal-assist or electric bikes mixed into fleets and I think that's how they're going to start making their entry into the mainstream.
What do you do to unwind?
I'm a little bit of a foodie. Living in Cambridge is definitely helpful. Some of my favorite spots are Puritan and Company in Inman Square and in Somerville there's a place called Tasting Counter. It's a startup restaurant and you pay a fixed fee for dinner that includes either wine tasting pairing or beer pairing or Sake pairing. You don't know what you're getting when you come in the door (you can provide allergies and other things) and you get fifteen courses of the best food you've ever had. It's one of my favorite gift ideas for employees at Zagster.
What are you reading right now?
I read a book in Cuba called Havana Nocturne by T.J. English about how the mob had basically converted Havana and owned it and then lost it in the revolution. It was really interesting to see how America helped Cuba get to where they are today as much as we have policies against them. It's really fascinating and that was probably one of the first non-business related books that I've read in a while.
What are your news sources?
NPR news. I really like BBC news as well. When I lived in London, I spent a lot of time reading that and I think they have a more unbiased view than a lot of other publications. And of course CNN and some of the other major ones as well just to see the difference in opinions.
What's the best bike route in Boston on a sunny day?
I would go down by the Charles River. I think it's just great people watching with so many places to stop along the way and some of those beautiful views of the skyline. You only get a few months of the year where you can really enjoy summer and that's the place to go for me.