The bike startup race is on and China is just the starting line
Update: Backlash to this bike-sharing craze could be on its way. Read about it here.
“China used to be the Kingdom of Bicycles,” Says Huang Xue, head of communications for bike-sharing app Mobike, referencing China’s long fondness for bicycles in the midst of a discussion on the ambitious company’s plans for expansion. Launching early 2017 in Singapore, the company has also been adding new cities in China to its roster on a near-weekly basis in recent months. With the addition of Fuzhou in February, they reached 15 cities on the mainland; by the time you read this, there are probably more. Cities with the biggest Mobike presence, such as Beijing and Shanghai, already have over 100,000 bikes each.
The premise for the company’s success rests on a number of factors, but it basically boils down to being able to rent bikes with your smartphone without needing to spend a long time seeking out a bike station. One of the founders of Mobike, Hu Weiwei, came up with the idea in 2014 after working at a media startup focused on automobiles. Her work schedule involved traveling to and from work in a car, even as smog swept both the streets and the news headlines. During a trip to France she utilized a bike rental service, but found that the need to locate one of a limited number of stations for retrieving and depositing bikes was a big problem, particularly for travelers in a new city.
Mobike’s bikes don’t require a station, but can simply be parked and locked by the road. Huang emphasizes the “smart technology” which she says is crucial to the company’s success, and is one of the key things distinguishing them from newer competitors that have popped up since the company’s inception.
“If you don’t have the smart technology, you can’t even find the bikes,” she points out, adding that without this technology, the bikes may be left neglected outside for too long and could thus become more of a liability for local governments than a benefit.
The bikes come in two different forms—first, they were a heavier model, identified by the five metal bars (in lieu of spokes) on the wheels, and later, a lighter model that has a basket made out of solar panels. The bikes were primarily designed for sturdiness, so as to deter vandalism and give them a long shelf life. This is part of the reason why the older model has no spokes or chain, which would increase the bikes’ maintenance requirements. The bikes also generate power, which is then used to power the smart technology and GPS.
So with all these high-tech components and quality designs, why aren’t the bikes a popular target for thieves?
“They all use non-standard parts. If thieves want to sell those, the bikes are useless to them,” Huang says. Admittedly, this doesn’t solve all the problems; sometimes, instead of leaving them in approved areas by the road, people bring the bikes into their buildings or homes so they can use that bike exclusively. Huang says that local police across China have been very helpful in these cases, and that between the GPS tracking and the use of video cameras, they have been able to recover the bikes when thefts occur.
The company is having myriad effects on transport networks. Aside from their explicitly stated goal of getting people on bikes to ease traffic congestion, Huang points to some interesting figures regarding usage periods. “We found people using them at 2 a.m. and 3 a.m. in certain cities in South China. This is a period when there’s basically no public transport, and there are people working late shifts who need to get to and from work. There are illegal pedi-cabs at this hour, but we think our bikes are providing a safer alternative.”
Part of Mobike’s advantage comes from being the first on the ground—their subsequent rapid expansion helps ensure they have more bikes on the ground than competitors, making them more convenient to find and use.
In order to fuel this expansion, they need to be able to create a great many bikes. This is where their partners have come in.
They need the capacity to manufacture, at high speed, both the technology required for their smart bike GPS systems as well as the bikes themselves. A recent partnership with Foxconn, the manufacturing company perhaps best well-known for manufacturing iPhones, has doubled their ability to produce bikes, and potentially reduced costs.
This is a significant development, as one of the key challenges the company has faced related to the expense of the bikes. The first, heavier model of bikes was expensive to produce as was reflected in the cost to rent the bike, especially when compared with those produced by rivals bike-sharing services such as ofo. The new, lighter models are cheaper, but price is certainly still an issue. The partnership with Foxconn will not only provide new funding for the company, but also mean they can produce them more quickly and cheaply, thus fuelling their expansion.
Bike Curious is a story from our issue, “Wildest Fantasy.” To read the entire issue, become a subscriber and receive the full magazine. Alternatively, you can purchase the digital version from the App Store.