Learnings from the Chinese bike sharing system for the Indian market
By: Onn Bikes
Tags: Mobility, Electric Vehicles, Electric Mobility, Shared Mobility, Transportation

Photo Credit: www.itdp.org

The rising urban sprawl has been unstoppable for a long time and thus the mobility in the cities have been greatly affected. Of many commuting troubles which urbanization has brought along, few of them are poor infrastructure, worsening air pollution, road accidents and the huge number of personal vehicles even for commuting short distances. The mobility giants keep exploring the alternatives to commute to fight these problems. Although the personal vehicle is the most used mode of transport these days, yet there are extremely high hopes from the booming bike sharing option.

Different countries experience varied preferences of the modes of transport owing to a bunch of factors which differ from country to country. The rate of adoption of bicycles is different at distinct locations, but the importance of cycling in the holistic evolution of sustainable transport systems is outstanding. And it has some solid reasons in its support like it leads to an immensely positive impact on the environment, requires less space and its usage will also drive toward improvement in infrastructure. Bike sharing ecosystem is appearing to pave the way for higher adoption of bicycle usage among people. There are enough and more perks getting introduced by government and employers to promote the usage of bicycles. China pioneered the successful adoption of bike sharing system and faced a plethora of failures and successes.

Bike sharing industry in China

In today’s times, if bicycle sharing is talked about at a global scale, there can be no way that China doesn’t get a mention. It goes without saying that China has the most popular bike sharing system in the world. It was validated by the Ministry of transport of the People’s Republic of China when they gave out the numbers in 2017. They stated that there were a total of 77 companies offering a massive number of 23 million bicycles on rent in over 200 cities of China. This industry saw a rampant growth in 2017 when the total of registered users using the bikes reached a whopping number of 400 Million as compared to 28 million in 2016.

China has had a very interesting history of bicycles. It was an extremely important part of the daily lives of locals so much so that owning one was the prerequisite for getting married back in the 1970s. The streets of Beijing used to be flooded with bicycles. The government had to create policies to reduce bicycle usage and increase the use of mass transport system. Then came then SARC epidemic which prevented people from using public transport and then came the influx of personal cars in the cities of China.

In 2007, the government which was struggling with the massive traffic congestion came up with docked bike shares in the main cities but people found it to be inconvenient and bike sharing didn’t take off because of the docked stations.

The bicycle sharing companies Ofo and Mobike were created in 2014 and 2015 respectively. They both had the focus on filling the gap of docked bike sharing by creating a dockless form of bike rental. In their opinion, the stations limited the spontaneity and access to the bikes. The little red Mobike bikes became easily traceable with GPS and were given on rent for a deposit of 299 Yuan through mobile payment. The little yellow Ofo bikes which were conceptualized in Peking University School Project spread outside the campus and were seen on the streets in a huge number.

It’s in late 2016 when bike sharing became the talk of the town in China. The country saw a lot of startups heavily funded by venture capitalists launching millions of bikes. It is heard that during 2016 and 2017, there was hardly any week when there was no announcement of bike share funding. The investors showed a keen interest in bike sharing apps which included GPS as that looked to be the only viable solution. The government saw it as a shining opportunity to become a world leader in promoting a greener mode of transport and appear as huge contributors to climate change. Also, it was a perfect way for them to reinstate the love of cycling among the citizens. A lot of companies like Bluegogo, Xiaoming Bike and many more sprung up in the industry of Bike sharing. The market leaders Mobike and Ofo meanwhile expanded across Southeast Asia, the US, Japan and Europe.

While the bikes were in bounty in the streets of China, they eventually got surplus and unused bikes started piling up in the bicycle graveyards. The sidewalks started getting clogged and people had to manoeuvre around the piles of the bikes which created an obstruction in the traffic as well. The industry players employed many trucks to collect improperly parked bikes and loads of workers to stack the bikes in a proper fashion. It’s just that this trash was good coloured but was enough to irk people. It went beyond imagination when companies recovered more than 3000 bikes dumped in rivers in Guangdong.

Successes and Failures of bike sharing in China

With the stature of being a pioneer in the global bike sharing industry, China also had its share of failures and successes of bike sharing in the country. Chinese bike sharing companies thought that they had a huge advantage over their global competitors by going the dockless way which didn’t really work out well eventually for them.

Successes of Bike sharing in China -

1. Huge fleet — Indeed China bike sharing industry has a lot of successes in its kitty which other countries should definitely take lessons from. Chinese industry, all companies put together had the fleet which was multiple times bigger than the rest of the world combined. The two major players Ofo and Mobike served 95 per cent of the Chinese market. Ofo owned over 10 million bikes to catered to over 9.65 million daily active users in 250 cities in China in March 2018. Mobike was also on the same lines with 8 million bikes running in 200 cities.

2. Capitalization on Technology — The players in China capitalized on the technology of using GPS and apps to book a bike for a number of hours. The Chinese cities saw a huge transformation as the entire concept proved to be extremely comfortable for commuters.

Research Credit: Mobike

3. Environmental impact — Bicycle sharing in China also contributed to an incredibly substantial environmental impact as the number of trips by private cars and taxis reduced by over 50%. Undoubtedly the bikes were generally used for short trips, but the effect on the environment could be clearly seen.

4. Reduction in parking space usage — Another success was observed in the reduced usage of parking space. Believe it or not, car parking occupies 10 times more space than bike parking. The free space can be used for plenty of other purposes, one of which could be planting trees.

5. Better utilization of public transport — The public transport system was getting underutilized because of a lack of connectivity to the stations. The bikes launched alleviated the connectivity to mass transport modes which were a huge success to the Chinese bike industry.

6. Employment opportunities — The operations of bike sharing companies encouraged bicycle production companies and created over 300 thousand jobs. Chinese companies contributed in more ways than one to boost the economy of the country and affect the environment in a positive way.

Failures of bike sharing in China-

Undeniably, there were many failures of the Chinese bicycle sharing companies which led to their downfall.

1.Improper parking of bikes — With a dockless bike, people were not bound to park at a specific spot and they were leaving the bikes anywhere. With the reckless parking of bikes, it created a lot of nuisance on the roads and in private parking spaces of people. The randomly parked bikes got difficult to regulate and created a lot of inconvenience to people.

The same government that was extremely excited about the launch of these bikes which were meant to curb pollution, solve traffic worries and free up parking spaces started taking strict steps to make sure that these companies regulate the parking of the bikes and put a check on the number of bicycles getting deployed on Chinese streets.

2. Dumping of bicycles on streets in a huge number — Another failure was observed when the streets were filled with bikes and got oversaturated. The government had to take many steps to put bike deployment and parking in accordance with the city’s requirements. The bikes were so much in number that officials had to impose a mandate of bike plate registration. A lot of technology was developed to ensure that bikes are parked at designated areas.

3. Troubles of Theft and Vandalism — Theft and Vandalism went out of control when the bikes were started to be seen with personal locks so that only that particular person could use the bike. The seats were getting stolen and theft touched a peak adding to one more failure to Chinese bike sharing industry.

4. Rebalancing of the bicycles — Another huge problem was that the bikes weren’t properly rebalanced based on the requirement of customers. The supply of bikes was overwhelming in the main areas of cities while it got difficult to find a bicycle in the suburbs. So, the rebalancing wasn’t efficient and according to the travel patterns of the users. The bike sharing industry surged up and then fell down too fast like every other technology bubble.

“It is said to be an unprofitable idea sustained by fantasy, false predictions, and the power of bigger firms.”

Learnings from Chinese bike sharing system for Indian Markets

There are many companies worldwide which are trying to set their foot in the industry of bicycle sharing. China has set examples for all of them to learn and they can now tweak their business strategy in order to succeed in the industry. Few of the takeaways from the failures and successes of the Chinese bike sharing system are as follows -

Filling the gaps in Public Transit

It is important to identify the spots which do not have public transport in a distance of 500 meters. These can also be referred to as blind spots and companies should try to fill this gap to reach public transit with a convenient way of bicycle sharing. In 2017, a Chinese internet company called Baidu identified these blind spots in Beijing which affected 50 per cent of its residents. Mobike utilized this opportunity and provided targeted services. It helped in reducing the gap in accessing public transport and immediately resonated with the Beijing residents. The key takeaway here is to strategically place the bikes instead of randomly dumping on the streets of the country.

2. Evidence-based urban planning

Planning a city based on the people density in an area is the ideal way which is bound to work in everybody’s favour. It is wise to use the metrics of movement of people to plan a city further. Mobike in China is providing the government with the ridership data so that efficient land use and infrastructure plans can be made. It makes perfect sense to urbanize the areas where ridership is more as compared to other areas. Also, the study of this data suggests that shared bikes extend each station’s utility radius from a walking distance to an 8–10 min, 3km riding distance.

3. Bring in Regulatory support

India is definitely a lucrative market from the sense of traffic, air pollution and road safety. There are numbers like over a half a million people were injured in road accidents and over 1,50,000 were killed in India in 2016 which are frightening, to say the least. With the right government policies and support, bike industry can bloom in India. The smart cities of India are already working on the lines of launching cycle initiatives like Pune Cycle Plan. This plan by the government focuses on the development of a sustainable urban transportation system. The civic body is also working on building an infrastructure where cycling can be encouraged. Hence, incorporating regulatory support in the industry is the way forward for India.

4. Pedal bicycles are unfit for daily commute in India

The bicycles which run only through pedalling are not fit for the Indian market for the daily commute. The extreme weather conditions, poor infrastructure and Indian mindsets do not encourage pedalling for the everyday commute. None of the Indians would want to sweat it out on their way to work. In fact, the then leading Chinese player Ofo exited the Indian markets due to cash crunch and non-fitment of pedal bicycles for Indian people. Following this, most of the players in the bicycle industry in India are switching to electric to cater to the Indian people.

5. Dockless isn’t the future

While a lot of companies in India are trying to achieve the feat in going dockless way, but the recklessly parked bikes in the middle of the streets, on the highways and on flyovers cause uncalled trouble for the residents of the city. The extra work of rebalancing the bikes involves a lot of manpower and trucks which could be done away if some well-thought strategies could be executed. ALthough dockless has its own advantages, but those definitely get outweighed by the drawbacks and inconvenience it causes. Remember the stack of bikes haphazardly parked on the streets of China. It’s only advisable to use caution before that situation arises in India.

6. Innovative strategies to overcome financial situations

A bunch of innovative strategies were launched by Chinese companies to control the investment on assets and yet able to run a huge fleet on the road. Ofo came up with the idea in which clients can contribute their bicycles in exchange for unlimited usage of other bikes at different locations. This would simply prevent them to invest more in the assets and yet have a sufficient fleet on the streets. The whole intention of sharing economy should be to minimise the material asset investment and utilize the limited assets to ramp up the service with maximum efficiency.

All of the experience of China bike sharing industry has a lot of value to add to the players who are trying to build a sustainable mode of transport in India. Bike sharing is certainly the way forward to overcome the woes of micro-mobility but a lot of factors play a massive role in building the right strategy for our country. It’s about time that we as a community work together to build a model that is favourable to everyone in the community and solves everyone’s commuting troubles.