What keeps dockless bikes rolling?

What keeps dockless bikes rolling?

By Sooraj Raj

In the past few years, dockless bike sharing has spread like wildfire in China and has found its way out into the rest of the world. They’ve been thrown in garbage bins, hung in trees, set on fire, bent out of shape, tossed in rivers, flung under cars, and piled in crumpled heaps on roadsides.

But the number of public-use bicycles available around the world more than tripled between 2013 and 2016. By the end of 2016, nearly 2.3 million bikes were available to the public around the world, with 1.9 million of these located in China alone, most of them being dockless.

Here, we trace the history of dockless bike sharing and examine the ups and downs of this new revolution in public transport to answer the pertinent question: Why are they still rolling?

So I can leave them anywhere?

These systems ditch the need to fetch or return a bike at a full dock or rack and instead allow riders to leave the bikes wherever they like. Rather than paying at a kiosk, people are able to unlock the GPS-equipped bikes and pay for the ride with a mobile app, and they don’t have to go out of their way to pick it up or drop it off. You can ride them as far as you want, and it’s supposed to make bike-sharing more approachable.

The beginning:

The history of public bike sharing started without docking stations and it was plagued by the same problems as its reincarnations today. In 1960’s Amsterdam, a group of activists introduced the Witte Fietsen, or White Bikes—dozens of regular bicycles that were painted white and left unlocked for anyone to use and leave behind for the next person. After many of the bikes were stolen or damaged, the program was quickly shut down—and considered a massive failure.

The story of publicly shared bikes would later introduce dock stations, magnetic swipe cards, and GPS, but it is only 50 years later, starting in 2015, that dockless bike sharing companies like Mobike and Ofo in China would hit their cities like tornadoes. By late 2017, the Ministry of Transport reported that China’s dockless bike fleet had grown to 16 million bikes.

Over 30 private companies have started operating in China. In particular, Mobike and Ofo have become the world’s largest bike share operators with millions of bikes spread over 100 cities, mostly in China. They have also spread elsewhere, where they have been criticized as “rogue” systems instituted without respect for local authorities.

From China to the West:

Urban bike-sharing programs in the U.S. have often been a sinkhole for investors, with low take-up rates and high operating costs requiring public subsidies. It was with this in mind that dockless bikes entered the country.

Bluegogo, which trails the leaders Mobike and Ofo in popularity in China, was one of the first to announce its launch in the U.S., in San Francisco, in December 2016. Seeing the explosion of dockless bike sharing, western entrepreneurs weren’t going sit still either.  Vbikes, Limebike, and Spin followed the footsteps – or wheels – of stationless bike-share startups that have taken off in Asia.

Spin and LimeBike are both Bay Area-based, venture-backed companies.  Spin has raised $8 million and LimeBike raised $12 million. VBikes is based in Garland, and the startup has ambitions of expanding beyond North Texas. LimeBike is backed by Andreessen Horowitz, a well-known Silicon Valley venture capital firm that counts Airbnb, BuzzFeed, and Lyft among its portfolio companies and is in five markets across the country.

Ofo Launched in Charlotte and Dallas in the second half of 2017 and they are now in 25 U.S. cities, including Seattle, San Diego, and Washington, D.C. When Mobike launched in Dallas in December, it became the 5th stationless bike sharing company to launch there.

Spin and LimeBike’s bikes are three-speeds and have a basket that’s lined with a solar panel that charges the lockbox. The companies both charge the same price for bike rental: $1 per 30 minutes. They do not have a deposit, but both require a credit or debit card. LimeBike also has a frequent rider price that charges $30 for 100 rides. VBikes costs $1  per hour — or 50 cents per 30 minutes — but requires a $99 refundable deposit. It caps the daily rental rate at $10.

Ofo said it will not enter a city without the blessing of local government, and LimeBike hopes to stand out from the pack by working closely with city officials. They are looking to help Dallas develop a permit program or regulatory structure and plans to share ridership data that could help the city make infrastructure decisions.

Slow start in the U.S.:

Chinese bike sharing companies hit rough roads when they entered the US. The slow pace stands in stark contrast to China, where Mobike, Ofo, and their ilk marked their arrival in a city by scattering bikes on nearly every street corner. It also differs from Uber (and Lyft, to a lesser extent), which got big in the U.S. by entering cities first and dealing with angry municipal governments later.

What explains the lag? For starters, it’s much easier for regulators to control a bike-sharing company than a ride-hailing service like Uber. While a quasi-legal Uber car is nearly untraceable unless you’re actually in one, bike-shares are easy to spot (especially if the bikes are piled up) and trace back to the company that owns them.

For example, Beijing-based bike-share upstart Bluegogo International Inc., which raised $58 million in funding in 2017, began testing in San Francisco with 200 of its signature blue bikes. The city has a traditional bike-sharing program run by Motivate International Inc., and Bluegogo got off to a bumpy start. In advance of its launch there, Bluegogo shipped hundreds of bikes and kept them in a warehouse ready for deployment. But once the government took notice of the plans, it passed regulations making it unfeasible for the company to operate there.

They do leave them everywhere:

Late last year, representatives for a Singapore-based startup pulled 42 bikes out of a river in Melbourne, Australia. Others have ended up in trees or simply in the middle of sidewalks and lawns. This has prompted an understandably negative reaction from some citizens whose cities suddenly seem to be drowning in discarded bikes. The only positive news story came when a young Melbournian man threw an oBike under an out of control car, not exactly the intended purpose of the service.

“After the initial novelty of using the services for a quick ride to the shops or to the station, I found myself going back to walking. It wasn’t from lack of stock, as a bike was always dumped nearby. It wasn’t even the weight or missing helmets, it was more the social stigma involved. You can feel the hatred people have for these things as you ride them. No marketing campaign will fix that.” 

– Peter Wells of the Sydney Morning Herald.

This year, Hong Kong  bike-sharing startup Gobee was shut down in France in February after suffering what the company called a “mass destruction” of its fleet. Gobee, which had 2000 bikes in Paris and claimed around 150,000 users across the country, said 3400 of the company’s bikes were damaged and more than 1000 were stolen. Gobee had previously called it quits in Belgium because “vandalism and damage caused to [its] bicycle fleet reached limits that [the company] can no longer overcome. …Over the months of December and January, the mass destruction of our fleet has become the new entertainment of underaged individuals,” the company said in a statement.

In China, where many of the biggest dockless sharing services originated, the supply of these bikes so greatly overwhelms the demand in some places that companies recently created a pile of surplus bikes the size of a small building. Some of the startups are also experiencing financial turmoil.

Conclusion:

As dockless bike sharing is expanding across the U.S. at breakneck speed, we will have to keep our eyes peeled to see how cities will take control of this inevitable future. It also remains to be seen if they will be sustainable economically. After all, even after 8 years since launch, Uber lost $4.5 billion in 2017. Whether profits will come when they are done expanding and consolidating, remains to be seen. Dockless bike sharing seems like a simple concept, but is it all that it appears to be? Stay tuned for our next article for the answer!

Featured image courtesy of Joe Mabel [GFDL or CC BY 4.0], via Wikimedia Commons.


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