The encyclopedia · Strategy & Leadership · Operational decision · 2019-2024
Mexico City halved its bike-share cost with an open reverse auction
Mexico City used open contracting and a 26-round reverse auction, cutting Ecobici's operating cost about half and adding 2,800 bikes.
Mexico City government · Ecobici concessionaires
the move
Mexico City ran Ecobici for ten years, but the next contract to expand the network and upgrade its technology was expensive and the market was concentrated.
In 2019 the city adopted open contracting and a reverse auction, opening the tender so two consortia competed live across 26 rounds of price improvement.
The city expanded service from 6,500 to 9,300 bikes and from 480 to 687 stations, and the renewed service runs at about half the operating cost of the old one.
why it works
- Publishing the contract data and criteria widened bidding beyond the usual single operator.
- A live reverse auction let two consortia see and undercut each other, not submit one sealed bid.
- Outcome-focused criteria meant the winner had to deliver service quality, not just a low number.
- The same open-contracting approach was then built into the city's Tianguis Digital procurement system for other projects.
what transfers
Turning a renew-a-concession negotiation into a public reverse auction forces the incumbent to defend the price, and the savings pay for a bigger service.
what came after
ADIP, the city's digital agency, embedded the 'prebases' draft-bidding module into Mexico City's e-procurement system, simplifying market studies and supplier consultation across 90 spending units so the open-contracting method is reused, not a one-off.
references
- Wheelie good procurement: How Mexico City halved costs and improved its bike share scheme
- Towards open wheels: Mexico City's path to contracting a better public bike system
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