It’s ironic to see bicycles back on the streets of Beijing again but with a new twist thanks to the sharing economy and a boom in well-funded bike sharing startups that work through mobile apps – sort of like car-hailing services Uber or Didi, except for bikes.
Convenient, cheap, practical and greentech, sharable bikes have become all the rage among students and young professionals in China’s leading cities. Why own a bike when you can use your mobile phone to scan a QR code and unlock a nearby, brand-new bike, ride it for however long you want at incredibly low prices (1 yuan or 14 cents for 30 minutes), park and lock it, and then move on, only to pick up another bike elsewhere later in the day.
Bike-sharing startups in China sport a parade of colorful branding for their nifty-looking bikes – blue for MoBike and yellow for Ofo, to name two market leaders among some 30 companies that have jumped into this sector. The race is on for dominance just as it has been with taxi-hailing services.
Mobike has drawn more than $300 million from Temasek, Hillhouse Capital, Sequoia Capital and Tencent’s Xuanwu Lab. Ofo, its chief rival, has attracted $450 million from Didi Chuxing and DST – not to mention a plug by Apple CEO Tim Cook, who recently visited and rode a bike at Ofo.
You might say, bike sharing is nothing all that new or exciting. After all, bike-sharing services have popped up in New York City and London.
But the business model and technology for bike sharing in China is more advanced than in the West – one more sign of that skillful Chinese micro-innovating gene. In China, you can drop your rented bike wherever you want to instead of at an assigned docking station — thanks to GPS technology that locates and tracks the position for each bicycle.
In Beijing and Shanghai, bikes are being dropped randomly at street corners, subway stations, campuses, restaurants, shopping malls and you name it. These branded bikes are starting to crowd city sidewalks so much now that talk is that government regulations could be coming to control parking of the bikes only in authorized specific zones.
Just as with Uber and Didi, you can bet that this new startup craze will see price wars and battles to the finish to win – whether it’s an acquisition or an IPO. Already, these bike-sharing entrants are trying out new business tactics to tackle some of the challenges of bike-sharing efficiency.
On a panel I moderated recently at Peking University, Mobike CTO and co-founder Joe Xia said the company is having initial success with a recently introduced red packet promotion that rewards bikers for returning their bikes to a designated parking spot. Clever!
The bike sharing services are starting to go global too – at least where flat landscapes and city density makes bicycles a popular form of transportation. Mobike is venturing outside China by entering the Singapore market. To be sure, Mobike does not have an open road – it will compete with Singapore’s own OBike, as other Asian markets begin to adapt this new startup trend.