The company told gaming-updates that Joko, an electric bike service launched in New York last April to compete with Citi Bike, is shifting its business away from consumer rides. The move comes after the city sued Joko for using bike rentals without prior approval from the New York City Department of Transportation.
With the lawsuit still pending, Joko has decided to distance himself from the wrath of the DOT, which strongly supports Lyft-owned Citi Bike as New York’s exclusive bike-share provider. The company now says 100% of its customers are either gig economy workers who rent their cars at daily or weekly rates, or corporate customers who book a dedicated fleet with Joko.
Co-founder Jonathan Cohen said, “We were on day one, we just raised a ton of money and we were all excited to start with the vision we had and Cities and Lyft came to us and tried to make it happen. Vanity told Kipa. (Both co-founders are named Jonathan Cohen, but one is from New York and the other is from London, so from now on we’ll differentiate them based on their geographic location.)
“We tried to make the world more efficient, enjoyable and sustainable, but looking back was a huge blessing. Since then we have increased our revenue 20 times and we have five active large companies that we work with and it is growing very fast.”
Joko did not elaborate on the basis of revenue growth, saying instead that the company has grown 20 times “from the moment when it became very difficult with the city, and from the moment we started focusing on the distribution sector and decided to relocate.”
Joko is now doubling supplies and has expanded to Chicago. The company now has a total of 2,000 bikes and 50 stations between the two cities and plans to expand to Boston, Washington, D.C., and Miami over the next three months, New York-based Cohen said, adding that Joko will add thousands. Passengers daily between New York and Chicago.
One of Joko’s corporate clients in New York is instant commerce startup Joker, which delivers groceries and goods from stores in 15 minutes and recently raised a $260 million Series B. According to Alex Grubman, Joker’s COO, Joker started supplying e-bikes to the Joker last fall at select warehouses.
“We rent a certain number of bikes from Joko, but I think what’s interesting about Joko’s business model is that they have docks in town so if we need extra bikes we have the flexibility so we can always scale.” , – he said. Grubman gaming-updates, adding that the partnership has expanded in recent months and that Joker will expand its Joko fleet.
“Joko has done a great job of standing out with the customer service it provides, the maintenance period that is part of the bike rental,” continued Grubman.
Joko’s biggest competitor in e-bike delivery is Jumo, an Australian company that just raised an $80 million Series B. Jumo makes its own e-bikes and offers them either as a weekly subscription for workers or as a fleet service, including fleet management software, to large businesses like Domino’s and DHL.
There are few differences between the companies other than their maturity and reach — Zumo was founded in 2017 and has since expanded to Canada, the US, Spain, France, and Germany. The Jumo model gives gig workers a weekly subscription to their e-bikes, ranging from $35/week for part-time couriers to $49/week for full-time couriers. Riders take the bikes home, charge them, and call Jumo if they need service or maintenance.
By comparison, renting a Jocko bike for six hours costs $15 a day or $49 a week. Gig employees always park Joko’s bikes at one of the startup’s charging stations.
“The great thing is that you don’t have to worry about charging or locking up the bike,” New Yorker Cohen said. “You don’t have to carry the battery on your back. You don’t have to worry about your bike being stolen.”
“Anyone can become a courier with no upfront investment,” said London Cohen. “For just $15 a day, they can use an e-bike for up to six hours at a time with unlimited bike swaps. So once the bike’s battery runs out, they’ll head to one of our dense network hubs, trade it in for another bike, and be able to keep making money. I
London Cohen said the ease of access has made the service “sticky,” with customer retention rates high and increasing every day, and marketing investment virtually nil.
Joko is doing mass marketing to get more drivers and learn more about their customer base. For example, the company holds meetings at stations where passengers are treated to pizza for free and asked what they want from the service. So Joko started making custom handlebar covers for riders to keep their hands warm in the winter.
Joco has its own cars, which the company says it gets from various suppliers. One such supplier is Acton, which recently bought docking station startup Dukt Dukt. Both provide vehicles and charging points for their public e-bikes to Joko. Corporate customers do not need to have a charging station at the dock, so Joko can use another supplier for this.
Aside from buying vehicles and equipment, Joko’s other biggest expenses are related to rent, along with a private garage where he keeps his bike. Dock-in charging stations are helping the company eliminate costs that hinder the profitability of non-dock micromobility businesses, such as vehicle charging and maintenance, according to London-based Cohen. Finding and charging an e-bike is easy, and because the bikes aren’t on the road, they don’t wear much.
Joko said he is raising capital from corporate contracts and gig worker income, and then reinvesting that money for the company’s sustainable growth.
To keep winning customers and expanding nationally, Joko will certainly have to raise more money. He’s brought in “several million” so far, which has helped with the initial capex, according to New York’s Cohen, but is in the middle of a Series A to continue growing.
However, the main problem with Joko’s upward mobility is the ongoing legal battle with New York, which could be repeated in other cities as the company expands into new markets.
Joko’s problem with dots in New York
According to the lawsuit filed by the city against Joko, NYC DOT has had a contract with Citi Bike since 2012 that has generated nearly $1.5 million in revenue to date.
The contract gives Citi Bikes the exclusive right to operate the bike-sharing system within a certain area, which includes Manhattan and most of the suburbs. Lyft is investing $300 million to expand the system, a private equity investment that is somewhat dependent on Lyft and has no local competition.
And then there was Jocko, who showed off his swampy bike shed filled with electric bikes in parts of Manhattan and Queens. Lyft uses e-bikes in nine U.S. cities, but only about 40% of its entire fleet is electric, Lyft spokesman Alex Wade told gaming-updates.
When Joko originally targeted passengers, the unlock price was $1.25 per minute, which equates to about $3.50 for a 10-minute ride. Citi Bike has increased its prices across the board, so it costs $3.99 to unlock a ride for a non-member, and for e-bikes, that price has increased to 23 cents per minute, which is $6.29 for the same ride.
Joko now only offers daily or weekly passes, which the company says are not defined as a public bike-sharing service that requires permission from NYC DOT.
Despite numerous attempts by gaming-updates to contact the NYC DOT, no contact could be made to confirm or deny whether Jocko’s turn would keep him out of regulation.
Whether Joko will ever operate under the jurisdiction of the NYC DOT is still under discussion. A 2020 law passed by the New York State Legislature defines a shared bicycle system or power-assisted bicycle as “a self-service and publicly available bicycle or power-assisted bicycle on which the bicycle or bicycle begins its power-assisted journey.” /or ends on a public road.”
While Joko’s bikes were and still are public, they do not start or end on public roads as the bikes are parked on private property. Joko made the same argument in court in May, when the courts denied the city’s motion to temporarily suspend Joko’s operations until the next hearing in June.
Later that month, an admission notice was filed warning Joko that a court order had been filed in favor of the city’s request for a preliminary injunction or termination of Joko’s operations. The Court agreed with the City’s interpretation of the definition of bike sharing, which focuses not so much on trips that start and end on public roads, but on the use of public roads.
“It seems certain that all of Jocko’s bike rides begin and end in New York,” said the Rt Hon Lyle E. Frank wrote in an admissions announcement. “It also seems undeniable that almost all riding on these bikes takes place on public roads, as defined by the rule, in New York City. It seems odd that a municipality would accept a rule if it only applied to shared bikes traveling on public roads. Thus, any bike-sharing program that started somewhere on a sidewalk or any other public area adjacent to a public road that is not technically a public road is also not eligible. This argument puts pressure on credibility and the court refuses to accept it.”
Joko appealed the decision two days later and the decision is pending.
However, the founders do not appear to be embarrassed by the court decision, as they now say they are fully committed to following the delivery route. The company says that 100% of its passengers are now only in the delivery zone, despite the fact that the Joko app is still open to everyone and does not ask the user about the purpose of the trip. The company’s copy of the website is still heavily geared towards commuters, and the delivery page, the Coens said, is working on an update.
“We focus on couriers,” New Yorker Cohen said. When asked exactly how, he replied, “The people we market to, even if you look at our Instagram, the last five posts and more, it’s all about delivery.”
At the time of writing, none of Joko’s last five Instagram posts have been about delivery. Of Joko’s 48 posts, only six talk about delivery, and one video shows the courier in a broader context, offering winter driving tips.
Despite this, Joko insists that he is monitoring the drivers and that while his bikes are technically available to the public, they are not used by passengers.
“Most people who want to drive, including commuters, are looking for a 10- or 15-minute ride,” says New York-based Cohen, who no longer offers Joko. “So we’re not excluding them from this, it’s just that they’re not intended customers. Someone who delivers might go to a touring bike shop, but it probably won’t happen.”