Common Problems

Limebike operates within the commons with little concern for its governance. This is made clear by its electric bike and scooter charging program. The program assigns property rights for revenue based on charging on a first come first serve purpose. This takes a private good and implicitly makes it a quasi public good.

The first come first allocation method serves to increase costs without an increase in production. An arms race for faster and bigger methods to collect limes occurs with no increase in the quantity of bikes charged. Juicers have to invest in needless capital costs. Cheating will increase on the margins and rules to combat fraud will incur increased enforcement costs for Limebike.

This setup is akin to the documentary series “Deadliest Catch” in which ship, life, and limb are needlessly lost in search of crabs. Property rights used to be assigned by a first come first serve basis. This encouraged risky behavior and capital expenditures into larger and faster fishing vessels. The fishing losses were halted by the assignment of property rights in the form of quotas for each season. This lead to far less waste for those involved as well as far less excitement for the documentary series. Alaskan Crab fishing is no longer the deadliest job. The distinction for Limebike’s charging program is that the show would have to occur within private fisheries that decided to let there fish or crabs be a public good free for all.

Limebike is not alone. Competitors have similar strategies for how to manage their charging programs. The first to use a property right or matching mechanism to solve their self inflicted commons problem will have a competitive advantage. It may even signal a greater understanding of the commons their enterprises operate within.