Have you noticed all those colored bikes appearing everywhere in large US and European cities these last months? If you live in China, you know what I’m talking about.
It has been 2 years now since this new sharing bike system has been launched in China. First in universities campuses, later in all big cities. The concept is simple: use an app that let you find the closest bike around you, ride and leave it where you want after use. No need to find a station to park it anymore. No more full stations. Park as closest as your destination is.
How can it be more convenient?
After a fight for over a year between at least 10 Chinese startups to conquer the market, only 2 succeeded. They became unicorns by raising billions thanks to giants Tencent, Didi Chuxing, Huawei or Alibaba. They are called Mobike (orange) or Ofo (yellow) and claim to get around 9 million daily active users.
What’s next
Now, they are facing a new challenge: expand to the rest of the world. Let’s have a closer look to what’s happening.
This new system of bike sharing is completely different to what already exists in US or European cities. New York City’s Citibike, London’s Boris Bike or Paris’s Vélib’ for instance, provide bikes to their citizens, but require them to pick up and let the bike in a station. The service is public, meaning that it takes longer to get improvement, or funding. Transition between new and former company managing bikes in Paris is a good example: it takes time, while Parisians can’t use the service.
What startups provide thanks to private financing is lighter bikes, cheaper fare and deposit, no subscription, and promotion. Even more important: useful data collection about users’ riding behavior.
Challenges to face
But they are facing 2 main problems: defected bikes and public space use. Many cities are afraid to face wrong bike parking, or worst case over flooding.
In French cities Lille and Reims, Gobee Bike had to remove its bikes because of vandalism. In San Franscisco, Bluegogo has suspended its business after few months because of local political resistance. Even Amsterdam, the world bike-friendly city intends to ban rental bikes because of parking issues.
To succeed, companies will need to insure an efficient bike sharing service and get agreements with each city about public space use.
In the end, those new markets are very challenging for Chinese startups (or local copycats 😉) because it seems that every city reacts in a different way towards the service.
Last but not least, it puts actual bicycle operation and financing into question.