Shared bicycles business model takes a global spin
BEIJING — To rent a bike in China, all it takes is a phone app, and any of the millions of bicycles scattered on sidewalks everywhere can be yours. No bike stand. No drop-off point. You scan a code, you ride, you leave and lock the bike wherever and whenever you’re done.
China’s billion-dollar bike-sharing revolution already has transformed the look and feel of cities around the country, with more than 100 million apps downloaded and billions of rides taken on many millions of bikes. Now it is going global. Last month, a Chinese company called Ofo made its first foray into the United States, delivering 1,000 bicycles to the streets of Seattle, with plans to expand nationally. From Italy to Kazakhstan, from Britain to Japan, from Asia’s greenest city, Singapore, to one of its most congested, Bangkok, Ofo and its main Chinese rival Mobike are in a breakneck race to expand across the globe.
Welcomed in many cities, but not by everyone, the companies are already encountering a backlash. Opponents have branded Ofo and Mobike a menace, a plague and a public nuisance.
Each of the two main Chinese companies has more than 7 million bikes in operation in over 150 cities, mostly in China, and each recently attracted $600 million to $700 million in new funding to finance their global expansions.
Bikes are typically fitted with GPS locators to enable users to find them via the app. Payment is minimal and made electronically.
Beijing, a city where bikes once ruled, has once again taken to two wheels, and most cyclists seem to use a shared bike these days. Greener and healthier to use, the bikes get commuters to and from public transit stations and discourage car use. They solve what planners call the “first-mile-last-mile problem,” helping people get from their homes to a bus stop, for example, or from a subway station to their final destination.
Dubbed “Uber for bikes,” they have proven much more popular than schemes based on docking stations. New York’s Citi Bike, with 10,000 bikes and 236,000 subscribers, is the largest operation in the United States. Compare that with Beijing, which has 700,000 shared bikes and 11 million registered users, nearly half the capital’s population.
Unlike arrangements based on docking stations in Washington and London, the dockless model doesn’t require government subsidies and already is spawning rival start-ups: California’s Spin and LimeBike narrowly beat Ofo to the punch in Seattle after the city pulled the plug on its subsidized bike-sharing program.
The explosion in users speaks to their success. But they are not universally liked.
In China, bikes clog sidewalks and pile up in unruly flocks outside subway stations, shopping malls, office buildings and road intersections. Unwanted or broken bikes are dumped by highways, in rivers and parks, on construction sites or under bridges.
Unlike Uber, bike-share companies haven’t angered vested interests such as taxi drivers, but they may run into much stiffer opposition from regulators and citizen groups in the West.
In San Francisco, China’s Bluegogo dumped hundreds of bikes onto the streets in January without permission. City Supervisor Aaron Peskin called them a “public nuisance” and threatened legal action against an “arrogant” tech company.