Bike-sharing hits roadblocks in Singapore
When Singaporean bikesharing firm Obike announced its exit from the Singapore market in June, it signified bigger problems in the bike-sharing industry in the city which rang alarm bells for operators and users alike.
The new government regulation is forcing bike-sharing operators to incur extra costs related to technical implementation and fleet re-balancing, which added to the difficulties of obike, said Zhang Xiaohu, Postdoctoral Associate, SMART Future Urban Mobility Interdisciplinary Research Group (FM IRG).
However, cost may not be the only reason for obike’s closure in Singapore, Zhang noted. “The bike-sharing business has been very competitive especially after Ofo and Mobike’s entry into the market last year.”
Gbikes and Sharebikesg have also folded up their Singapore operations in the aftermath of new LTA rules, whilst remaining players are rolling with the punches. Anywheel has faced challenges, especially in meeting LTA’S technical requirements, but believe it is well prepared to comply with the set standards, said its strategy manager RJ Seet.
Investment experts see the new regulation as piling on to an array of challenges that bike-sharing firms already face and potentially dampening investment. “It was already an extraordinarily difficult business to begin with; adding in onerous regulation to the crowded competitive landscape, low margin business model, and high capex, and you have a very unattractive industry,” said Justin Hall, Golden Gate Ventures principal.
“Like all things, I think a highly crowded space is self-defeating for all parties,” Hall added. “Once the landscape becomes less crowded, there might be space for one player, perhaps two, but I wouldn’t hold my breath.”
The regulatory tightening is likely the start of an expected rationalisation of the bike-share market, said Hugh Mason, co-founder of JFDI Asia. “We have just seen the land-grab phase and now there will be a war to the death and we will end up with one or maybe two providers.”
The bikesharing business has been very competitive especially after Ofo and Mobike’s entry into the market last year.