In Economic theory, there is difference between a good and a commodity. Both are products that fit a desired need. The distinction between the two is that a commodity is generally considered qualititavely the same so that one can be exchanged for another.

With the ubiquitousness of the bicycle and availability of good working condition used bikes, for most consumers, I think a bike is considered more of a commodity unfortunately.

Commodities, barring extreme upsets to the market, generally have very low margins.

This is much like in the IT hardware business. Computers, laptops, servers etc have largely been commodified so that margins in the hardware is minimal (5% or less, sometimes even sold at cost) and any profit is made through any value added services (i.e. software, support) and is partly why IT sales try to talk in "ecosystems".

This is similar to what I see with the LBS.