Tel Aviv was a pioneer of municipal bike rental services in Israel, launching Tel-O-Fun in 2011 as an alternative to private cars and public transportation. Later, however, electric bikes entered the market, followed by scooter rental companies, which proved more popular but also more dangerous and prone to accidents.
Now, the Tel Aviv municipality is trying to promote electric bike rentals again through a new tender for micro-mobility companies, set to close in early January. The city is looking for up to six companies to rent scooters and bikes that are better suited for longer rides. Currently, three scooter companies operate in the market—Bird, Lime, and Dott—as well as Metrofun, the new name for Tel-O-Fun, which rents both regular and electric bikes.
Eli Sabag, who purchased Metrofun in 2023 and also operates the Jerufun service in Jerusalem, says: "I invested several million in this business replacing the bike fleet, and then October 7 happened. The war changed the plans, and I personally did about 200 days of reserve duty. But in 2024, after cost-cutting, I managed to bring the company to operational balance and a small profit. That will also be the case in 2025."
The tender will end Metrofun’s de facto exclusivity in bike rentals. Lime briefly offered bikes alongside scooters but stopped the service after the municipality required that any company adding bikes to its fleet must remove an equal number of scooters, which currently generate more revenue due to higher daily rentals.
"We will submit a proposal that this time will also include electric scooters, and we will offer both types of vehicles in the tender, for riders to choose from," says Sabag. "One problem with scooters is their light weight and small wheels that cannot absorb a pothole or stone at 25 km/h. The public votes with its feet and wants scooters, and we will offer them that."
According to the Tel Aviv municipality, the new policy aims to promote cycling as the preferred mode of transportation in the city, "partly due to their suitability for longer and safer rides. Accordingly, as presented in the public call for proposals, for the first time a dedicated quota for shared bikes will be set, which will be added to the existing combined quota, under which a permit holder may deploy vehicles of their choice—bikes and/or scooters. The deadline for permit applications is January 4, after which we will know how many companies participated in the tender. The total number of vehicles and the actual allocation between bikes and scooters will only be determined after the application review process is completed."