Bicycle Hire, for Hire

Municipal bike sharing has rolled into dozens of American cities, from Washington to Oklahoma City to San Francisco. Now a Massachusetts start-up called Zagster aims to take the idea of bicycles on demand and deliver it to university and corporate campuses, apartment complexes, hotels and resorts.

ZagsterSo far Zagster has set up its “bike fleet in a box” at about 55 locations.

On Thursday, the company, formerly called CityRyde, announced a $1 million round of investment that will allow it to expand nationally. In essence, Zagster's idea is to make access to bikes a coveted building amenity and corporate perk, right up there with pools, gyms, and cafeterias - at a relatively low cost.

Fontinalis Partners, a Detroit-based venture firm jointly founded by William Clay Ford Jr., and the venture capital firm LaunchCapital are among the lead investors in the expansion.

So far, Zagster has set up its bike-fleet-in-a-box at about 55 locations, including places like Yale University and the Hyatt hotel in Cambridge, Mass., where the company relocated this year from Philadelphia.

For a monthly fee based on the number of bicycles, Zagster supplies the bikes, maintains them (it is working with local bike shops) and provides the software to manage the fleet. The property owner can decide whether to charge residents and guests for access or offer the bikes as a free amenity. It's cycle hire for hire.

The bikes come outfitted with a lock box that registered users can open by using a code received via cellphone text message at the start of their session. (A session is ended by texting as well). Inside the box is a key to the bike's lock. Unlock that, and you're ready to hit the bike lane or cruise across campus.

It's up to the individual user or property owner to supply a helmet, for liability reasons, Zagster's chief executive, Timothy Ericson, said. In an effort to deter theft - historically a bane of public cycle-hire ventures - Zagster is customizing its off-the-shelf bikes to make it difficult to remove parts using standard tools.

Each bike also comes equipped with a basket so, as Mr. Ericson put it in a phone interview, “You can't go Thanksgiving shopping, but you can certainly do your daily shopping.”

More than 60 university campuses and many corporate campuses have set up bike sharing for students and employees, and demand appears to be growing, said Susan Shaheen, director of the Transportation Sustainab ility Research Center at the University of California, Berkeley.

And bike sharing has gained some traction at resort communities in Florida, Mr. Ericson said. “But the only option for a hotel, to date, was buying a bike fleet of their own or working with a local bike shop, which was really not scalable at a nationwide level.” The Hyatt hotel chain and Cisco Systems have signed on to use Zagster at locations around the country.

Last month, Zagster stationed 15 bikes at the development University Park at M.I.T., which includes a mix of residential, retail, research and hotel buildings managed by Forest City Commercial Management. Bike rentals start at $9 per day, and power users - residents or the general public - can opt to pay about $30 per month or $50 per year for unlimited rides.

If a bike is lost or becomes damaged beyond repair and the user is found to be at fault, Zagster charges $895 for replacement and restocking.

Readily available bicycle s offer one way to bridge the gaps in transit services between home and station, and between station and workplace - the so-called first- and last-mile problem. And for carpoolers and train riders who might otherwise feel stranded at the office without a car, on-demand bikes offer a way to go out for appointments and errands during work.

Unlike many city bike-share programs, which are priced for short trips, Zagster's setup lends itself to longer rides and round trips, Ms. Shaheen said.

Like cities that favor the idea of getting people on bikes to help alleviate traffic congestion, crowding on mass transit and parking shortages, businesses and universities can benefit on many cost fronts.

And then there's the green credibility. Back when it looked like a cap-and-trade system might be broadly adopted and create demand for measurable, verifiable reductions in carbon dioxide emissions (with carbon credits), Zagster developed a methodology for calculating the e missions avoided by bicycling instead of driving and had the system accredited for use in international trading.

The company says it is now in discussions with the World Bank on the potential use of Zagster's system during the 2014 Summer Olympics and the 2016 World Cup in Rio de Janeiro, which has created a low-carbon city development program in cooperation with the World Bank.

Zagster still has a long road ahead. The company has just five full-time employees today, and it takes two weeks for it to roll out its service after a new customer signs up.

By the middle of next year, the company hopes to have 15 people on staff and a large enough network of service providers throughout the country to have bike fleets ready to go in under a week.