The Impact of Bike-Sharing Services on Local Business

Despite the significance of bike-sharing services as a daily means of transportation and their potential to influence supply and demand in the local economy, the impact of these services on local businesses has not been studied yet. Hence, this research aims to examine how a bike sharing program influences the success of local businesses. We analyzed data on 3,623 local restaurants and their credit card sales recorded from February to August 2019, along with bike rentals made by local passengers near the restaurants, to investigate the association between bike-sharing rentals and local restaurant sales. Our findings show that the number of bike rentals around a restaurant is positively associated with its sales. We further find that the impact of bike rentals becomes more significant when there are more subway passengers around the restaurants, while the impact becomes less significant when there are more bus passengers. This indicates that consumers use bikes as a last-mile transit mode for restaurant visits. Moreover, we find that non-franchise (less-popular) and new restaurants (opened within 1-year) benefit more from the bike-sharing program. We believe that the main findings offer significant contributions to existing literature by theorizing the value of sharing economy programs in the local economy context. In addition, our results provide strategic implications for policymakers and local businesses to make effective use of sharing economy programs.