The world’s most popular way to get around

By Anne VanderMey, reporter

FORTUNE — In the Netherlands, there is such as thing as the bicycle school bus, a 12-person rig that children can pedal while an adult steers them to school. In Japan, cyclists deposit their bikes into curbside machines that subsume them into robotically enabled underground parking structures. In China, the government has made the development of electronic bikes — bicycles with built-in mechanical assist — a national priority. In America, however, it’s not unheard of for people to drive to the end of their driveway to get the mail.

The bicycle is the world’s most popular form of transit. There were an estimated 133 million bikes produced and sold to retailers last year, says industry analyst Jay Townley. That’s more than double the number of cars manufactured worldwide in 2011, and a 500% increase from 50 years ago. Now, a new wave of bicycle evangelists — and, increasingly, pragmatic municipal governments — are trying to push those numbers even higher.

Over the last five years, major cities around the world have discovered a new, and fervent love for two-wheeled transport. Paul DeMaio, founder of the bike consultancy MetroBike, says the number of bike share programs worldwide has exploded — from 60 in 2007 to nearly 450 today. It’s not hard to see why. In the face of increasing urban problems like smog-spewing congestion, high obesity rates, and overtaxed infrastructure, biking is an obvious solution. In Paris, the publicly supported bike share system has more than 20,000 cycles. In London, it’s about 8,000. In China, Hangzhou reports 60,600 and Wuhan claims a whopping 70,000, a world record.

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The United States, home to 30% of the world’s autos and just 5% of its people, has been historically unfriendly to cycling. But today even American cities may be coming along for the ride. New York City is planning to introduce a major bike sharing system this summer, though software glitches may delay the launch until next year. When it does rollout, it will be country’s largest such program — by a factor of six.

Whether this model of bike sharing has been an incredible success or a miserable failure depends on whom you ask. In Washington D.C., advocates of the hugely popular program Capital Bikeshare point to increased ridership rates throughout the city. A Capital Bikeshare survey also found that members got more exercise, traveled five million fewer miles by car, and saved some $15 million on their transportation last year.

On the other side, critics point to the disproportionately white and educated Capital Bikeshare ridership as evidence that the system is a regressive use of public funding. They argue that taxpayer dollars should benefit the neediest, not the wealthy and fit. In New York, where motorists and bikers are wage daily war over who owns the road, bike share opponents complain that the new, 10,000-bike system amounts to a giveaway of precious New York City street space to a fashionable niche interest.

Most of the world’s bike sharing systems actually lose money, often to the tune of several million per year depending on the size of the program. Much of that cash is government funds. Advocates say the cost is offset by the addition of a new transportation service, reduced traffic congestion, and improved health. But the question remains: does bike sharing benefit enough of the public to justify the taxpayer dollars that must be poured into it? And if not, who should pay?

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In addition to substantial startup expenses, average maintenance and operating costs for a bike share bike run about $1,600 per year, though New York City says its will be lower, at $1,200 per unit. There are a few established ways of covering that cost: One is public funding. D.C.’s Capital Bikeshare, for example, uses a mix of member fees and government aid. (It’s government-owned and privately operated.) Another model is advertiser funding. Paris’s Velib program is run by the advertising agency JCDecaux, which in turn receives a concession for advertising in the city and a share of revenue. Some cities—such as Berlin—bring in for-profit companies’ to operate the system. Others, like Boston’s New Balance Hubway, are wholly owned and operated by the government, and still others function like non-profits. A recent report found that 58% of large modern systems in the U.S. (including Denver, Minneapolis and Madison) use the non-profit model.

New York City’s bike share system will be a hybrid of existing models. Alta Bicycle Share, which runs a handful of systems in major cities, will work with New York officials to run the program, and will split any profits with the government. Zero tax dollars will be used during the project, which should placate the system’s more vehement critics. Instead, advertisers Citigroup and MasterCard will cover setup and operating costs. Citigroup has committed $41 million to the system, in exchange for branding it “Citi Bike.” MasterCard is chipping in $6.5 million to help set up the stations’ payment systems, and its logo will adorn the stations’ kiosks.

Although New York’s system won’t be a model all cities can mimic (advertising in the Big Apple is more lucrative than it is elsewhere), its financial success will likely play a big factor in deciding how – and if – future bike share programs in the U.S. are rolled out. That means Citi Bike could have a real impact the transportation culture of American cities. Bike advocates hope that the influx of 10,000 public bicycles in New York not only improves transportation (particularly in terms of the door-to-door service not offered by most public transit), but will fundamentally change the way New Yorkers get around. In Paris, the first year bike share was introduced, ridership in the city increased 70%. Bike share consultant Paul DeMaio, said that after the introduction of the bike share system, the city “all of a sudden, pretty much overnight, became bike friendly.”

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Widespread bike sharing, advocates argue, will encourage cultural strides toward making biking approachable – dispelling the intimidating image of urban biker as a nylon-clad athlete, weaving in and out of traffic. In a city where biking is de rigueur, cars are more attuned to cyclists, and cyclists are more tuned in to traffic laws. Once they achieve a “critical mass,” to quote the so-named once-monthly bike activist outing, bikes become part of the fabric of urban transport. Though it seems counterintuitive, studies have shown that increased bike ridership actually leads to increased bike safety.

Biking in the U.S. is on the rise, but there are few if any major metros where biking is the norm. In the country’s 70 largest cities, bicycle commuting has risen 63% in the last decade according to the League of American Cyclists. But whereas some 30% of people bike to work in the Netherlands, and close to 50% do in some Chinese cities, just 1% of urban commuters use bikes in the United States. Tim Blumenthal, bike share champion and president of Bikes Belong, says that the “dream goal” for bike proponents is to that number to 5%.

“If 5% of the trips in big cities were made by bike, you’d notice a lot of changes,” Blumenthal says. “Cities would be quieter. There would be less pollution. There would be less noise.” Quality of life, he says, would generally improve, both for the bikers and average city dwellers.

To reach the 5% goal, many cyclists have pinned their hopes on bike share, which Blumenthal says must be paired with the introduction of safer and more comprehensive bike lanes, like the recent additions in Paris and New York. The coming year could be a watershed moment. On top of the estimated 15 major systems in operation in the U.S., about 17 more are planned this year – including additions in San Francisco, Baltimore and St. Petersburg, Fla. Los Angeles also recently unveiled a blueprint for a privately operated program. If all goes according to plan — and New York’s system finally comes online — the next few years could spark a biking renaissance in the U.S. Or, of course, the spark could fizzle.

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On a hot, sunny Saturday in June in Central Park, hundreds of New Yorkers turned out for a test run on the first two Citi Bike cycles, labeled #00001 and #00002. The city held some 150 meetings, demonstrations and events before the launch date was pushed back — one of several such setbacks to plague large programs. Chattanooga, whose system uses the same software that reportedly has delayed New York’s program, waited for its program for months. Chicago’s, too, has been put off until next year. In the park, though, the cycles were polished and ready to ride. A steady stream of people took one for a whirl, mostly to good reviews. That’s not to say they’re fast or hip. At 42-pounds, they’re aggressively utilitarian. And it takes a while to get going. Once they get a little momentum, though, it’s a pretty smooth ride.

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