Not only are dockless shared bikes affordable and convenient for their users, they’ve also been great business. The world’s leading dockless bicycle hire providers, Ofo and Mobike, both based in China, have ramped up their operations, expanding fleets in 250 cities across 21 countries.
It’s led to a familiar sight in China, where, in the past, cities had been full of bicycles. That changed in the 1990s, with the massive growth of the automotive industry and the consequential increase in car ownership. But, more recently, attention turned to air pollution and related environmental issues, prompting the Chinese government to encourage a low-carbon economy. The dockless shared bikes concept that emerged in 2016 is a direct result of these policies. China has since emerged as a global leader in the bike-sharing sector, led by local firms that have started to expand the booming business model to overseas markets.
Societal and economic factors have also contributed, from a huge domestic market and high population density to digitalization and high smartphones penetration, as well as widely used mobile payments systems. And to the youth, “green mobility,” going out with a smartphone and a shared bike, is considered to be cool.
A product of our times
While the notion of shared dockless bikes is far from new, today’s iteration of the idea is truly a product of our times. Piggybacking on the soaring sharing economy, and leveraging technologies powering the Internet of Things, the bike sharing craze began as soon as the technology allowing a shared bike service to scale up enough to become lucrative had become sufficiently mature.
Shared bike users can unlock a bike using their smartphone. But, because the bikes are dockless, users need to find them first, as do the people responsible for redistributing the bikes around the city when, inevitably, they accumulate at popular destinations. Shared bikes, therefore, depend on affordable yet accurate satellite positioning, and today, all bike sharing companies use GNSS chips to locate their bikes. Additionally, shared bikes need wireless communication technology to validate users and communicate their status to the cloud.
As the Financial Times reported recently, Ofo and Mobike, the industry leaders in dockless shared bikes, have produced 19 million new bicycles over the past two years. The convenience they offer has enabled millions in China to use bicycles for the first time. And the yellow and silver bikes, which now roam the streets of over 200 cities worldwide, have quickly become one of China’s most visible tech exports.
While growth of the sector has been explosive, it hasn’t all been sustainable, with startups such as Bluegogo closing down in late 2017. But, according to a recent report by Cheetah Lab, a global mobile data research organization, the number of users of shared bicycles in the world will continue to rise: from 227 million in 2017 to 306 million by 2019. In particular, Cheetah Lab sees huge potential in the overseas markets, estimating the bike-sharing industry would be able to see a spike in overseas users by 5 to 10 times in the next 2 years.
Challenges remain, however, such as loose regulations for bike parking and poor behavior on the part of users. It’s still relatively early days in terms of the dockless shared bike market, which is why the governments have not yet had time to react and draft appropriate legislation and set up regulatory requirements. No doubt this will be addressed in the near-term as the market continues to boom.