The year of 2017 seems to be the turning point for Chinese bike-sharing industry. Mobike got acquired and Ofo rumoredly was running out of capital to sustain, Hellobike became the dark horse with hefty funding from Ant Financial, while more smaller players went straight out of business for lack of capital injection.

Despite such a gloomy prospect, the remaining players, in a race to grab market shares and survive, raced against each other to flood Chinese city streets with millions of brightly coloured bikes. It didn’t take long before everyone, including riders, bike-sharing startups, and the government, realized that the growth in supply outpaced users’ demand.

Some of the dockless bikes end up in bike graveyards where they are abandoned as wastes. Other bikes are still somewhere in cities but are full of dust as they haven’t been used for long.

As of the end of April, 50 per cent of shared bikes in Beijing are left unused, according to Beijing local news service, the Beijing News, citing people familiar with the matter from Beijing Municipal Commission of Transport.

Meantime, in general, the total number of shared bikes in the capital city has decreased by almost 20% from the peak in last September to 1.9 million, as per the same source. Besides, messy parking is still a trouble.

In a bid to rein in shared bikes, in last September, Beijing has demanded startup to suspend deployment of new bikes in the city. And before that, 11 Chinese cities, including Shanghai, had taken a similar approach. To tackle the troublesome parking issue, Beijing and Shanghai have also introduced electric fences where bikes should be parked.

The government clampdown has an immediate effect on bike-sharing startups. As their expansion in the city is thwarted, bike-sharing startups have to cut orders for new bikes. For example, Ofo, one of China’s top two bike-sharing services, planned in May 2017 to buy 5 million bikes a year from Shanghai Phoenix. But the operator of yellow bikes has only ordered around 80k bicycles so far this year from the bike manufacturer, far short of its plan.

Sometimes, troublemakers also try to solve the problem they caused. Mobike, Ofo’s only formidable rival in China, introduced last year its parking lots, smart Mobike Preferred Location, to manage the parking. Ofo took a different approach, turning to blockchain technologies to not only regulate parking but also seek to tackle bike deployment, redistribution, and maintenance, establishing a research institute earlier this month.

As the Chinese bike-sharing market saturates, both Mobike and Ofo have set their eyes on overseas markets, probably bringing the same issues there. Mobike just pedaled into India and is now available in 16 countries, while its archrival Ofo is available in over 20 countries.

In fact, the sharing economy is not only causing problems in China. American city San Francisco is grappling with the influx of shared scooters deployed by three startups Bird, LimeBike, and Spin. The city is even looking to introduce a legislation to regulate scooter sharing.

 

Editor: Ben Jiang