Competition in complementary transport services: Integrating bike-sharing with public transit

Bike-sharing systems play a dual role in urban mobility: They act as feeders for mass transit (addressing first/last-mile challenges) and as direct alternatives for short-distance trips, potentially diverting demand from public transit. This study investigates the coexistence of bike-sharing and mass transit services, analyzing their complementary (e.g., expanding transit accessibility) and competitive (e.g., mode substitution) effects. To this end, we develop a tractable bi-level model to examine the competition and complementarity between bike-sharing and mass transit services. The lower level of the model determines equilibrium of users’ mode choice, while the upper level optimizes the operational strategies of the profit-driven bike-sharing operator and the social welfare-driven transit operator. We analyze two operational paradigms: independent operation (non-cooperative game), where bike-sharing and transit operators act in self-interest, and joint operation (Nash bargaining game) scenarios, where collaboration aims to balance profit and welfare. Through numerical case studies in Hong Kong (focusing solely on regular bicycles, and excluding e-bikes and scooters), we demonstrate that in most cases the complementary effect of bike-sharing on transit dominates the competition, as it primarily enhances transit ridership through connecting sub-trips. Introducing bike-sharing significantly reduces total social costs, even when the bike-sharing operator maximizes its own profit. Improved transit service quality enhances bike-sharing profitability and reduces competition. Furthermore, the synergetic operation of bike-sharing and mass transit further enhances overall social welfare. In synergetic operation, while the bike-sharing operator may experience a reduced profit compared to the independent operation, the bike-sharing system may still maintain a large positive profit.