Bike boom takes small bite from fuel demand

The two-year bike-share boom has put over 16 million bikes in China alone Bike-sharing startup Mobike forayed into the capitals of US, Malaysia and Thailand

Singapore, Sept. 26: It is not quite going back to the horse, even if the bicycle was the first contraption to replace beasts as a means of personal transport.

This is a new two-wheeled animal, though, that millions of consumers in Beijing, Taipei, Singapore and cities across Asia are renting via apps to cover the last mile of journeys, leaving cars and motorcycles at home, and forgoing taxis.

The two-year bike-share boom has put over 16 million bikes in China alone, according to its ministry of transport, with more than 100 million riders registered, eating into car use and gasoline demand growth already expected to stagnate by 2025.

“I often use bike-sharing services because it’s very convenient. I can find it anywhere and will not worry about losing the bike,” said life-long Beijing native Wei Zhang, 36, who uses a shared bike several times a week on her commute, riding 5 km or more.

Analysts can’t keep up with bike numbers, let alone estimate how much gasoline consumption growth has dropped off due to the rise in bike-sharing. But it is clear from industry estimates, government reports and a Reuters survey that bike services are resulting in fewer trips by motor vehicles.

“Bike-sharing has been crazy since late last year ... The general belief is that (it) boosts the utilisation of public transport as shared bikes help to complete the journey,” said Harry Liu, downstream consultant with IHS Markit.

Even before the number of bike-share units began growing by multiples, analysts had already been saying greater fuel efficiency in autos and the rising use of electric cars meant gasoline’s big growth story was over.

China’s gasoline demand growth is expected to slow to nearly 4 per cent this year, compared with 6.5 per cent growth last year, said Sri Paravaikkarasu, head of East of Suez oil at FGE.

And Chinese demand for gasoline is expected to peak as early as 2025, according to China National Petroleum Corp.

“There used to be long queues of taxis waiting for customers outside train stations, but I don’t see them anymore,” said a Beijing analyst, who took part in a Reuters survey of bike-share users and wanted to be known only by her surname Wang.

Bike-sharing could pose a risk to gasoline consumption “if a stronger state push to reduce carbon intensity and improve air quality translates to more drivers replacing shorter-distance driving with bike rides PETER LEE, OIL AND GAS ANALYST, BMI RESEARCH