On Two Wheels in Paris: The Vélib Bicycle-Sharing Program

Posted: 7 May 2012

See all articles by Peter A. Coles

Peter A. Coles

Airbnb

Elena Corsi

Harvard Business School, Europe Research Center

Vincent Dessain

Harvard Business School - Finance Unit; European Research Center

Multiple version iconThere are 2 versions of this paper

Date Written: April 19, 2012

Abstract

French advertising company JCDecaux and the city of Paris jointly developed Vélib, a wildly popular bicycle sharing system. Despite Vélib's public appeal, vandalism and theft led to ballooning operating costs-costs borne by JCDecaux alone. The two parties opted to renegotiate their contract, which would impact prices, revenue sharing, cost allocation, and the operation of the system as a whole. Could the parties agree on a common strategy that would meet their objectives, while still delivering a first class bicycle sharing service to the city of Paris?

Learning Objective: The case serves two primary pedagogical purposes. First, the negotiations and contractual agreements between the city of Paris and JCDecaux provide insight into issues both sides face in navigating public-private partnerships. The tasks at stake include designing contracts to align diverse objectives, handling lock-in, coming to agreement on pricing, and anticipating renegotiation strategy. Second, the case considers the unique operational challenges of providing a shared resource and explores how technological and market-based innovations can help overcome these challenges.

Suggested Citation

Coles, Peter A. and Corsi, Elena and Dessain, Vincent, On Two Wheels in Paris: The Vélib Bicycle-Sharing Program (April 19, 2012). Harvard Business School NOM Unit Case No. 912-022, Available at SSRN: https://ssrn.com/abstract=2053427

Peter A. Coles (Contact Author)

Airbnb ( email )

888 Brannan St
San Francisco, CA 94103
United States

Elena Corsi

Harvard Business School, Europe Research Center ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

Vincent Dessain

Harvard Business School - Finance Unit; European Research Center ( email )

Boston, MA 02163
United States

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