China’s fast growing mobile bike-sharing apps remind us of UAE’s car-sharing app that let you pick the nearest car, drive it to your desired destination, pay for the ride via the app and leave it wherever.
But at least the UAE is making a profit out of it but there are some questions about the mobile bike-sharing apps in China.
China has a massive population combined with hefty traffic, so some 30 companies in China today evolved to provide you with the nearest bike for just 1 Yuan by just scanning a bike’s QR code and you are good to go.
But with people loving the idea to swoop between the automobile traffic, came the issue of flooding sidewalks by people just leaving the bike anywhere in an unorganized manner.
Subway entrances and sidewalks and clogged with bicycled with different colors from differend bike-sharing companies.
“After they’re done riding, they just toss the bikes on the road,” said Zhang Jincheng, a Beijing ofo employee who collects scattered bikes – a service bike-share firms are offering in response to complaints from urban residents.
“This will affect pedestrians and cars on the road. That’s really dangerous,” he said.
There are even some stores’ owners who are complaining about the messy bicycles shown infront of their stores which can affect their businesses.
The competition among the apps has become a “bike war,” said Hu Weiwei, co-founder and president of Mobike, which was established in 2015 with funding from tech giant Tencent and others.
Both Mobike and Ofo are operating close to 100 cities across the world, this year.
Bike-share users are rapidly growing, their number was around 20 million in 2016 and it’s expected to reach 198 million by 2021, according to a repost by research firm Research and Markets.
Due to this growing number of users, Beijing and Shanghai have recently issued draft guidelines for strict regulations on bicycles, including standards for parking.
So here come the question, What do those companies gain?
So of course if the bike-sharing problem is sorted then it would be a great idea in China’s traffic but what’s the profit to the companies themselves?
The 30 companies in China are literally giving away free bikes, just only to beat competition.
Not only that, but they’re not like Uber, the more customers the more the company is gaining, bike-sharing Chinese companies have to purchase more bikes to accommodate with surging demand.
Moreover, those companies will have to deal with theft and collecting bikes from far away areas.
Prices are so low to make a profit, so there’s a very little profit or none at all.
Mobike’s premium bikes cost around $435 to produce while Ofo’s simpler bikes are $36 dollars to produce, and the bike won’t be used more than 5 times a day because it’s going to be far from popular places anytime at the day.
Not to mention, hiring more staff to collect those bike to busy places, and to fight theft.
The business is being defined by how much capital competitors can raise to spend on gaining market share.
That’s why the idea never reached the United States.