Two bikes, one app

Users dis­cuss how they would feel if share-in­dus­try gi­ants ofo and Mo­bike merged

Global Times – Metro Beijing - - FRONT PAGE - By Ka­trin Büchen­bacher

“Iwant to ride my bi­cy­cle; I want to ride my bike. I want to ride my bi­cy­cle; I want to ride it

where I like,” goes a fa­mous song by an iconic English rock band, Queen.

A wish ex­pressed less than 30 years ago has now come true in China with shared bikes. If Queen came to Bei­jing to­day, hun­dreds of thou­sands of twowheeled trans­ports are read­ily avail­able with a touch of your fin­ger­tip and a mo­bile phone. An in­no­va­tion made in China, but is it re­ally a child born to the fam­ily of the shar­ing econ­omy?

The shar­ing econ­omy is known for their dis­rup­tive busi­ness mod­els. Thanks to the dig­i­tal rev­o­lu­tion, they can rein­vent an ex­ist­ing ser­vice and com­pletely change the sta­tus quo in that mar­ket. First, they of­fer low prices to draw cus­tomers. When the mar­ket is sat­u­rated and cus­tomers are used to the new and con­ve­nient ser­vice, they raise the prices. Cus­tomers will stay loyal be­cause, at this point, there is no real al­ter­na­tive with the same qual­ity of ser­vice.

It is true that shared bikes are dis­rup­tive, but they do not ac­tu­ally be­long to the shar­ing econ­omy – they are a stan­dard B2C (busi­ness to cus­tomer) ser­vice. Users do not share their own bikes, such as with Didi or Airbnb, where users pro­vide their own cars and apart­ments. This is why “on-de­mand” bikes may be a more suit­able name.

Nev­er­the­less, they turned the ur­ban trans­port sec­tor up­side down, es­pe­cially in Bei­jing, a city well known for its “nine mil­lion bi­cy­cles.”

The bright orange Mo­bike and the ca­nary yel­low ofo are the lead­ers of the mar­ket. Other com­peti­tor’s bikes are adorned with col­ors more nu­mer­ous than the rain­bow, but they share only five per­cent of the mar­ket among them­selves. Their bat­tle to win over new users has been lost as the bike-share gi­ants can of­fer free rides and hong­bao (red en­velopes filled with money) to their cus­tomers.

How­ever, ear­lier this month, mar­ket ru­mors about a merger between Mo­bike and ofo have in­ten­si­fied. “Mo­bike and ofo could only be­come prof­itable if they merged,” said Zhu Xiaohu, an in­vestor in ofo in a re­port by on­line news plat­form Huxiu in Spetem­ber. So far, ofo has de­clined to com­ment on the is­sue, but Mo­bike of­fi­cially de­nied such plans.

The pri­mary in­vestors be­hind ofo and Mo­bike are In­ter­net gi­ants Alibaba and Ten­cent. These hold­ings have a his­tory of in­vest­ing in com­pet­ing app ser­vices un­til they merge into a pow­er­ful quasi-mo­nop­oly that pushes other com­peti­tors out of the mar­ket.

For ex­am­ple, the food and restau­rant list­ing apps Meituan and Dian­ping are now a sin­gle com­pany.

An­other ex­am­ple in the trans­port sec­tor is the taxi apps. When they emerged, they com­peted with tra­di­tional cabs and among them­selves for clients, so the prices were low. But then, Didi Dache and Kuaidi Dache merged form­ing Didi Chux­ing. The com­bined power was so com­pelling that they soon swal­lowed Uber China as well. Now be­ing in a mo­nop­oly po­si­tion, they can raise prices ac­cord­ing to the de­mand. Dur­ing the week­ends and rush hours, a Didi is more ex­pen­sive than a tra­di­tional taxi.

The users of on-de­mand bikes might face a sim­i­lar sit­u­a­tion in the fu­ture.

But how do both Chi­nese and for­eign­ers in Bei­jing feel about a merger between Mo­bike and ofo? Do they sup­port or op­pose the bike-shar­ing ser­vices? And how do they see the Chi­nese com­pa­nies’ in­ter­na­tional ex­pan­sion?

To bet­ter un­der­stand the user’s at­ti­tudes to­ward an even­tual merger, the Met­ro­pol­i­tan re­cently vis­ited the Ts­inghua cam­pus in Bei­jing to in­ter­view in­ter­na­tional and lo­cal stu­dents.

Two be­come one

Pak­istani Mu­das­sir Syed, an en­gi­neer­ing doc­toral stu­dent, is a “fre­quent user of Mo­bike.” The 31-year-old stu­dent thinks that rid­ing a Mo­bike is more com­fort­able than an ofo. How­ever, he is a fan of the on-de­mand bike ser­vices in gen­eral. “We fre­quently travel out­side (cam­pus), so we just grab a Mo­bike and go any­where we want to.” Syed is in fa­vor of Mo­bike and ofo join­ing forces.

“If they can pro­vide a bet­ter ser­vice, I think it would be a good de­ci­sion for the com­pa­nies to push,” he ex­plained.

Chi­nese na­tional Li Mei­hui, who just started her first year at the uni­ver­sity, uses ofo more of­ten than Mo­bike. “I have no money on my Mo­bike ac­count,” she ex­plained, ad­ding that she prefers us­ing bikes on-de­mand than own­ing a bike. “That way you don’t need to worry about where to park it safely.”

The young woman also wants ofo and Mo­bike to merge. “So I can scan both bikes with one app!”

Amer­i­can Jor­dan Schneider, 27, a med­i­cal his­tory stu­dent at Pek­ing Uni­ver­sity, is very en­thu­si­as­tic about on­de­mand bikes.

He said, “They are the great­est thing China has ever cre­ated, far su­pe­rior to pa­per, gun­pow­der and all the other past in­ven­tions. Noth­ing can com­pare to the im­pres­sive and mind-blow­ing im­pact of the on-de­mand bike busi­ness model.”

A “city plague”

How­ever, not all the stu­dents feel so pos­i­tive about the home-grown Chi­nese in­no­va­tion.

Is­sameldeen El­fadul from Su­dan is

not a fan of Mo­bike or ofo, in fact, he prefers to own a bike. His metal­lic-blue slim city bike takes him ev­ery­where on cam­pus and be­yond. He said, “Why should I pay a 200 ($30) or 300 yuan de­posit when I can get a new bike, or per­haps a sec­ond-hand bike, for the same price?”

The 30-year old is here on a schol­ar­ship from the Chi­nese gov­ern­ment, get­ting an MBA. Re­gard­ing the merger, he sug­gested that the com­pa­nies should re­duce the amount of the de­posit so that peo­ple will pre­fer the rental ser­vice over their own bike.

Aus­tralian na­tional Luke Pe­grum, who is ma­jor­ing in jour­nal­ism at Ts­inghua, used to be a loyal ofo client. “Walk­ing takes me 20 min­utes, a taxi takes half an hour and a bike only takes five min­utes,” he ex­plained.

“But then they got a lit­tle weird,” he said, re­fer­ring to ofo. “They al­ways seem to be bro­ken.” Now he mostly uses Blue­gogo, a Bei­jing-based startup, which he said to be “bet­ter than both, Mo­bike and ofo” and “eas­ier to ride.” He said the only prob­lem is there are not many of them.

What Pe­grum does not know is that this com­pany re­cently had trou­ble re­fund­ing de­posits and strug­gled with the over­sat­u­rated mar­ket, daily news out­let SupChina re­ported. The fierce com­pe­ti­tion in the on-de­mand bike rental mar­ket nat­u­rally pushes some play­ers off the field, an ef­fect that may mul­ti­ply in the case of a merger of gi­ants Mo­bike and ofo.

Chi­nese Hu Lin­hao, 28, a busi­ness stu­dent, said that Mo­bike and ofo help to con­ve­niently pass the last mile of a com­muter’s des­ti­na­tion. But he be­lieves that the bikes dumped at sub­way en­trances and on side­walks have grown into a “city plague.” For him, a merger could be the so­lu­tion to this prob­lem.

“It could pre­vent some un­nec­es­sary com­pe­ti­tion. Re­source al­lo­ca­tion will be more rea­son­able. It may even help Bei­jing with its con­ges­tion prob­lem,” he said.

Chi­nese Yu Yu, 22, sup­ports a merger as well. “I think it is an ex­cel­lent thing. Af­ter they are merged, the scope of use will be more ex­ten­sive,” she said. Yu of­ten grabs an ofo for short-distance travel.

Li Xin­ming, an 18-year-old fresh­man from China, agrees that a merger would im­prove the user ex­pe­ri­ence of the shared bikes.

“Some­times you can only find Mo­bikes, some­times there are only ofos. When the two com­pa­nies merge, you have more bikes avail­able,” he ex­plained.

Go­ing global, gone wrong

But there are some who think a merger might not be the best idea.

Pe­grum ex­pressed mixed feel­ings about the is­sue.

“I won­der if this is how the crazi­ness of the past year will end. There are so many of these bikes. I guess it’s only nat­u­ral that some com­pa­nies will die,” Pe­grum said, ad­ding that he ex­pects a sim­i­lar out­come as for Didi users - ris­ing prices.

“You lose some of the ad­van­tages of the com­pet­i­tive mar­ket,” he con­cluded. Schneider agreed. “The mar­ket can de­cide where it wants to go. At the same time, com­pe­ti­tion is ex­cit­ing and good. What hap­pened with Didi was that once they merged and once Uber evap­o­rated, the prices went up. I’m as­sum­ing that is go­ing to hap­pen as well if Mo­bile and ofo join to­gether,” he said.

Re­cently, Chi­nese on-de­mand bike com­pa­nies have de­cided to ex­pand glob­ally. But the ser­vice is not well re­ceived by all city coun­sels across the world. The Ger­man news­pa­per Die Zeit re­ported an “in­va­sion of the China bikes,” which caused chaos in Ger­man cities.

In the US, there seems to be a sim­i­lar is­sue.

“The cities have been re­luc­tant to let them put a large amount of bikes on the streets. So, I think in all of New York City, there seem to be 400 Mo­bikes,” Schneider said. “But hope­fully, they will get more pop­u­lar, so when I go back to the US, I will not have to dock my bike in one of those hor­ri­ble dock­ing sta­tions.”

Pe­grum said that in Mel­bourne and Sid­ney, the Chi­nese bike-shar­ing sys­tem had some of the same prob­lems as in Bei­jing.

“Peo­ple are leav­ing the bikes where they shouldn’t and a lot of them are end­ing up in the river. Per­haps Aus­tralians don’t pro­tect pub­lic prop­erty as much,” he said jok­ingly.

In the end, only one ques­tion re­mains unan­swered: What does Queen have to say to all of this? They’d prob­a­bly not bother about which com­pany to rent a bike from, as long as they could have a bi­cy­cle race.

“Bi­cy­cle races are com­ing your way, so for­get all your du­ties, oh yeah! Fat bot­tomed girls, they’ll be rid­ing to­day, so look out for those beau­ties, oh yeah!”

Photo: IC

More bikes avail­able, but higher prices? Users dis­cuss the pros and cons of a pos­si­ble bike-shar­ing merger.

Hu Lin­hao Is­sameldeen El­fadul Jor­dan Schneider Li Mei­hui

Photos: Ka­trin

Noth­ing can com­pare to the im­pres­sive and mind-blow­ing im­pact of the on­de­mand bike busi­ness model, said a fan of both ofo and Mo­bike. Büchen­bacher/GT, IC

Li Xin­ming Luke Pe­grum Mu­das­sir Syed Yu Yu Photos: Ka­trin Büchen­bacher/GT

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