Leading bike sharing companies in China, ofo and Mobike were not facing good situations this year due to their financial situations. They used to be the most popular companies to VCs, and they obtained over 2 billion USD investment within 3 years, which was the fast growing business in the recent years in China. However, the 2 billion USD investment is considered as irrational because the companies didn’t have good business plans to earn profits, and what they wanted was to raise as much funds as possible, which became cut-throat competition in the industry. Most of their money were spent to compensate for the cheap price or bring new bikes to the market, as a result, they didn’t have enough money to operate. They even started to use users’ guarantee deposit to operate the companies, which ended up with being not able to give the deposit back to the users. Meanwhile, the bike supplies outweighed the demand of users, which resulted in a bike graveyard.
I think the problem is because of lack of prior business planning, which also includes lack of market research and communication with the government. The population densities in many cities in China are very high, with a lot of vehicles also. Instead of suddenly bringing millions of bikes into the market, the bike sharing programs could be a great and implementable idea if they followed the regular pace of doing business and took the cities’ current situations into consideration. At present, from the city’s perspective, I think the bike sharing companies wasted a great opportunity that could probably increase efficiency in the city using technology, and even worse, they brought a lot of environmental pollution to the cities. I hope the large corporations that had acquired bike sharing companies could improve the situation.
Chinese source: https://www.ifanr.com/1094767
