Singapore’s homegrown bike-sharing startup oBike announced it has signed a memorandum of understanding (MoU) with Grab to deepen collaboration between the two.

For starters, oBike will integrate GrabPay into its app. Commuters will be able to pay for their oBike rides using GrabPay while earning GrabRewards points.

The duo didn’t say whether oBike’s bike-sharing service would be integrated into Grab’s app as well, but they are set to collaborate on more joint initiatives in the pipeline.

“This partnership, between two market leaders, is a natural extension of our goal to enhance the bike-sharing experience for commuters and strengthen our position as Singapore’s first bike-sharing operator.” Tim Phang, General Manager, oBike Singapore, said in a media release.

Why tie up?

Image from oBike’s Facebook page.

Both Grab and oBike are expected to benefit from the deal.

On the one hand, as bike-sharing companies all strive to glue users, oBike stands a chance to attract Grab’s large amount of users.

On the other, for Grab, the company will also be benefiting in gaining an international exposure given oBike’s global reach. The city-state-headquartered startup is now operating in more than 70 cities across 22 countries.

Additionally, the bike-sharing service is a great portal for user access and has huge potential for future monetization, explaining why both Grab and established Chinese tech companies like Alibaba are betting on this industry.

Read more at To Merge Or To Remain Rivals? Prospect Of New Financing Adds Further Uncertainty to OfoMobikeFight

Bike-sharing scene:

The bike-sharing scene in Southeast Asia is increasingly competitive with experienced Chinese companies Ofo and Mobike entering the local market.

Comparing to its Chinese counterparts, oBike is at disadvantage in terms of total funding and bike deployment.

oBike has 10 million active users and 14,000 bikes in Singapore. It’s rival Ofo claimed 10 million bikes in 250 cities across the world while Mobike boasted of 8 million bikes across 200 cities. Ofo and Mobike have all entered Singapore, Thailand, and Malaysia, striving to nab a piece of pie from oBike.

Now with Grab behind its back, oBike will be better positioned when competing with the Chinese bike sharing unicorns.