Question

Hubway: Boston’s Online Bike-Sharing System

If you've ever lived in a city, you know that getting around can be a challenge. Traffic jams,

overflowing parking lots, crammed subway cars, drivers who plow through puddles that spray

water on pedestrians—all of these may be enough to make you pack your bags and head for the

suburbs. A company in Boston is trying to change that, using a fleet of bicycles and the Internet.

Hubway (sponsored by New Balance and operated by Alta Bicycle Share) is Boston's recently

established bike-sharing system that features 60 stations, 600 bicycles, and an interactive

component that allows urban consumers to borrow a bike at one location with the swipe of a credit card—and return it to another destination. On a Hubway bike, you can pedal to the gym or the grocery store; commute to work; or visit a friend across town. You can grab an available bike spur of the moment by swiping your credit card at one of the kiosk stations, giving you a 24-hour or three-day membership. Or you can sign up for an annual membership online; within a week, Hubway will mail you a station key with a printed code. The cost of membership includes unlimited rides that are less than 30 minutes, with additional fees for longer rides.

Hubway operates entirely in the realm of e-commerce, marketing to consumers and conducting transactions completely online. “There is no store or counter to get a key,” says Hubway's Brogan Graham, who bears the title of Hype Master. “You put in your information online and we mail you a key.” The touch screens at the bike stations are solar-powered, offering access 24 hours a day, 7 days a week, meaning that bike riders may rent a bike at any time without the assistance of another human being. General Manager Scott Mullen points to the efficiency of this operating system, as opposed to the “unwieldiness” of staffing each station with a Hubway representative, which he claims “would be a 1.0 solution to a 2.0 problem.” Customer service does exist, however. If you cruise into a station with a flat tire or broken chain, you just hit the red “mechanic” button, which will secure the bike without letting someone else unwittingly take it out on the road. A Hubway mechanic will retrieve the bike and repair it. An app called Spot Cycle identifies the locations of different stations, including whether or not bikes are available at a specific station.

Hubway relies on the communication function of the Internet to provide current information to its customers. Consumers get station updates and marketing messages through social media sites, such as Facebook and Twitter; for example, if a station's Internet connection isn't working properly, Hubway will alert consumers via social media—including an estimated time for the station to go live. On its Facebook page, some Hubway members post suggestions for improvement (like which stations need more bikes on a regular basis) while others receive kudos for bicycling achievements (such as the first member to reach 250,000 rides). “We leverage the Internet,” says Scott Mullen.

Hubway's typical customers tend to be those who are the most tech savvy about swiping credit cards at kiosks, using touch screens, and maximizing services via the company's website and social media accounts. But its marketers emphasize the fact that Hubway's system is easy to use.

Most people need only to “use the system once to understand it because it is so intuitive,”

remarks Marketing Director Mary McLaughlin. Whether we're talking about e-commerce or traditional commerce, the numbers don't lie. Hubway began with a goal of attracting 3,000 members and launching 100,000 rides during its first year of business. In fact, the company hit the 100,000-ride target in less than 11 weeks and topped 250,000 trips in 6 months. On one sample day, more than 2,500 station-to-station rides were recorded. By year's end, 3,700 members had signed on. With this kind of success, Hubway has already planned expansion into more Boston neighborhoods, as well as adjacent towns like

Cambridge and Brookline—with the near-term goal of doubling the number of stations and

increasing the number of bikes to 1,000. Riding is “cool and fun,” says Brogan Graham. “It's a great way to explore a new city.”

Questions for Critical Thinking

1. What are the benefits of e-marketing for Hubway? What are the potential drawbacks?

2. Thus far, Hubway essentially engages in business-to-consumer (B2C) e-marketing. Cite two or

three examples of ways in which Hubway might branch out into business-to-business (B2B) emarketing.

Summary

This question belongs to marketing and discusses about benefits of e-marketing and its potential drawbacks.

Word count: 834

 

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