Uber for bikes china

‘Uber for bikes’ set to speed up travel in Chinese cities

An Uber-like service for bicycles is gaining popularity in China as a means to beat the increasingly congested roads in the country’s densely populated cities.

A number of start-ups in the tech sector are equipping bikes with GPS and scannable codes and linking them to smartphone apps in order to sell cheap bike-sharing to city-dwellers as the way to beat jams on China’s most clogged streets.

The rush to invest in car ride-hailing apps in China peaked with Didi Chuxing’s acquisition of Uber’s China arm in August, creating a £29bn giant.

But optimistic investors have now turned their attention to Shanghai’s MoBike and the Beijing-based Ofo, which have both raised significant funds in recent months.

MoBike, backed by Chinese internet giant Tencent Holdings among others, closed a $100m (£81m) funding round this month while Ofo also raised $130m from investors including Didi, smartphone maker Xiaomi and US hedge fund Coatue, which has backed Facebook and Google.

“We did not expect there to be so many investors and we did not expect this field to get so hot,” said Ofo co-founder Zhang Siding. Zhang was one of five Beijing students who launched the firm in 2015, now charging 1 yuan (12p) per hour to rent.

MoBike, also founded in 2015, and Ofo say several hundred thousand residents of Chinese cities use the services every day, though tech-sector watchers estimate neither yet makes a profit. Neither discloses earnings details.

Each claims to be the first of its kind in the world, raising the question for the firms and their investors of whether the model could be replicated in other countries.

In the meantime, the custom-made ‘smart bikes’ stand out in a country estimated to have close to 400 million bicycles: MoBikes have orange-red inner wheels with fewer spokes and airless tyres to reduce maintenance; Ofo’s yellow bikes have a lower-tech, retro look.

Riders use smartphone apps to unlock and pay the cost of hire, and they are free to leave the bikes wherever their journey ends, a feature Ofo and MoBike say is a major plus over traditional rental services, which require bikes to be returned to a parking station. MoBike’s app also allows users to see nearby vacant bikes using a GPS tracking system.

Ofo, which says it has more than 300 employees, claims some 85,000 of its bikes are providing 500,000 rides daily. At MoBike, which declined to disclose how many people it employs, chief executive Wang Xiaofeng said his firm has more than 100,000 daily active users.

“We want to make bicycles sexy again by making a fashionable, high-tech bike,” Wang said. Zhang said if each of his firm’s bikes were used four times a day, the company would recoup the bike’s cost in two to three months.

But it remains to be seen whether the new bike-sharing businesses will follow the path of bruising competition, heavy investment and ultimate consolidation seen in the taxi-hailing sector. In the meantime, the business model faces challenges, both operational and strategic.

Risks of theft, vandalism and irresponsible users who park bikes off-limits are the biggest everyday headaches for both firms. Another issue could be the very design of Chinese cities, adapted to meet booming private car ownership over the last two decades.

“Bike-sharing is a good direction from a planning point of view. But many Chinese cities have been built with scales prioritising vehicles,” said Sylvia He, assistant professor at the Institute of Future Cities at the Chinese University of Hong Kong. “There are just not enough facilities for bikes,” she said.

Austrian company Vello recently demonstrated a foldable bicycle that generates electric power by absorbing energy from braking and by pedalling downhill. 

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