June 2018, London
Uber and Lyft pedal in as Beijing fuels data driven bike-sharing craze
Bike-sharing has been welcomed by government as a fix for urban traffic and pollution, but there are challenges. Sally White reports
As happens to all disrupters, bike-sharing’s roaring success is getting it into trouble. Just as online transport giants Uber and Lyft are elbowing their way in, the plans of some companies to leave their app-controlled bikes all the way around the world are hitting two obstacles: vandals and city authorities.
European cities seeing messy piles of abandoned bikes on their streets are demanding licensing. These graveyards of discarded bikes are the result of the ‘dockless’ systems adopted by most market entrants, which make vandalism easy. Hong-Kong-based GoBee says that ‘mass destruction’ is chasing it out of France and Belgium. Meanwhile, China’s Mobike has withdrawn bikes from Manchester’s suburbs for the same reason, concentrating them in the city centre.
Last year getting on for $3 billion was invested in dockless bike-share companies worldwide
Yet that does not seem to be stopping bike-sharing’s rapid expansion as governments welcome it as an answer to urban traffic and pollution problems. Money is pouring into it and last year getting on for $3 billion was invested in dockless bike-share companies worldwide, according to US online tech news publisher TechCrunch.
Most of that money was raised by Chinese companies, with $1billion for Beijing-based ofo (now worth over $3 billion and with nearly 70 million users a month) and $800 million to Mobike, another Beijing-based company (also valued at around $3 billion). Bike sharing has taken off in a huge way in China, with China Daily reporting that last summer the country had over 20 million shared bikes from 50 companies. That compared with a number of 42,000 bikes in the permit-controlled US market (the figure given on the US National Association of City Transportation Officials site.)
Describing what happened in China, Danish bike-sharer Donkey Republic, tells the story on its site: “The Chinese companies did what they know best: they started a race for operating scale and market share nationwide, by literally flooding the streets of first-tier cities with millions of low-cost bikes, while counting on their IoT technology and large data platforms (remember, they track every trip you make through GPS) to become attractive to strategic investors.”
Then the Chinese companies went to Europe! Last year’s floods of brightly coloured bikes flooding Europe could have been anticipated. Co-incidental with the invasion, as Mobike, oBike and ofo et al entered the European market, images of junked Chinese share-bike mountains began to circulate.
The Chinese authorities have reacted with a set of guidelines to cap and regulate the bike-sharing industry which local governments must carry out. A vital feature is that bike companies must ‘set up electronic fences to guide users to park in an orderly manner and dispose of non-functioning bicycles in a timely fashion’. In addition, many cities have banned the introduction of new shared bikes, so the numbers are falling and the Ministry of Transport says that 20 companies have closed down or gone bankrupt.
Rules and regulations
Back in Europe, the European Cyclists’ Federation’s Platform for European Bicycle Sharing and Systems (PEBSS) warned cities and local transport authorities last summer that the wrong kind of disruption was threatened by “app-based, unanchored and unlicensed bike share schemes”. In the same month, bike-heaven Amsterdam, no less, announced the banning of all bike-share companies. Shared bikes were roughed up in Munich, where protesters turned them upside down, and in Italy, as locals found no space to park.
Europe and the US are tightening up on rules and negotiations with local government are now obligatory for the bike companies. US cities are forbidding bike parking in some areas and removing incorrectly parked bikes. In the UK the bike-share industry’s representative body, BikePlus, has published details of self-regulation which advocates geo-fencing, designated parking areas, and systems which don’t end the rental until the app notes that the bike is parked correctly. Germany has similar regulations.
The adverse reaction to the flood of dockless bikes has encouraged Lyft to go for a non-electric bike-sharing partnership
The advent of more expensive electric bikes is likely to increase bike companies’ surveillance of their assets. Wired, the emerging technology magazine, notes an ‘explosion’ of American dockless, electric bike-sharing systems. It is with New York-based e-bike company Jump, which has just raised $10 million, that Uber is trialling bike-sharing. Sensitive to rising resistance, Jump plans to set up ‘charging centres’ in business and residential areas at which the bikes should be parked.
The adverse reaction to the flood of dockless bikes has encouraged Lyft to go for a non-electric bike-sharing partnership with Baltimore Bike Share, according to Wired. This scheme will see five docked bike-share systems transformed into Lyft-branded ‘transportation hubs’, with designated spots for ride-hail pick-ups and drop-offs.
Electric bikes require a much higher level of care and maintenance than that given to the cheap Chinese bikes - in Seattle, LimeBike has trained an operations team of 40 people just to travel around the city, swapping batteries when they get low. The sums involved in London’s docked-bikes give some clue to the cost of running a successful scheme with regular maintenance. Santander London Cycle Hire, its 11,500-plus bikes and over 750 stations, according to the Financial Times, generates around £11 million from hires, £6 million from sponsors and gets over £3 million of subsidies.
Meanwhile, cyclists are being bombarded with apps to assist their journeys. There are maps in abundance, communities, journey planners, repair instructions, first aid, gear guidance (both clothing and mechanical), bike fitting, bike designing, pothole reporting, mileage and ride tracking, to name just a few. Wired describes this as cyclists’ new golden age and has dubbed it ‘Bikocalypse’.