CitiBike's City Contract Model

A business model focused on securing exclusive transportation contracts with cities by identifying transportation gaps and becoming the official vendor for specific transportation solutions. This approach bypasses the traditional consumer-acquisition model in favor of securing large, stable government contracts.

Key Points:

• Business Model Structure:

  • Partner directly with cities as their transportation vendor
  • Secure exclusive rights to operate in specific areas
  • Focus on winning 15-20 city contracts rather than mass consumer acquisition

• Revenue Strategy:

  • Cities pre-purchase large blocks of rides (e.g., $250,000 worth)
  • Create monopolistic position through exclusive contracts
  • Build stable, recurring revenue through long-term city partnerships

• Implementation Example:

  • Las Vegas Case:
    • Identified "transportation desert" where routes were needed
    • Secured contract with city government
    • City pre-purchased quarter million dollars worth of rides
    • Focused on serving specific underserved areas

• Proven Success Pattern:

  • CitiBike example:
    • Built $100M revenue business in New York
    • Secured exclusive license
    • Expanded to other cities like San Francisco
    • Successfully sold to Lyft

• Key Advantage:

  • Instead of acquiring millions of individual users
  • Only need to convince one city official to secure large contracts
  • Creates strong barriers to entry through exclusive licensing