Bike-shar­ing hits road­blocks in Sin­ga­pore

Singapore Business Review - - CONTENTS -

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.

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