In China: The Emerging Internet Bike-Sharing Industry

After leaving Beijing, China I relocated to Boston in August, the absolutely “greener side” of the globe — fresher air, better education and of course, uncensored Internet. My WeChat feed, on the other hand, had been talking about new stuffs on the other side of the globe that I’ve never heard of every single day.

Mobike was founded in December 2015, by former General Manager of Uber China, Davis Wang. Although Mobike was the first Internet startup in the bike-sharing industry, the idea of public bike rental wasn’t unprecedented. The Beijing government launched its own public bike rental program prior to its Olympic Games in 2008, but for many reasons the government-sponsored project failed to thrive. Similar services had also been also available in Shanghai, Hangzhou and many major Chinese cities. My current city in the US, Boston, is a part of the game since you can see Hubway locations everywhere in town.

My first Mobike Lite, a minute’s walk away from my residence

In October, a friend of mine who works at Zhongguancun in Beijing told me that he had started to ride Mobike to work. I spent some time researching, and found it really interesting. But my first actual experience with Mobike was eventually different from what I thought.

There are no “hubs”. You can basically pick up/park bikes wherever you want (as long as it doesn’t barricade the pedestrian walking). One of the primary reasons many public bike rental programs aren’t functioning is, it’s merely so annoying to look for a designated parking spot while you’re taking a shortcut from your apartment to the nearest metro station. Since GPS devices are implanted on bikes, all you have to do is 1) locate the nearest bike on mobile app, then 2) go to the bike and scan the QRCode, 3) bike gets unlocked and you’re good to go. When you return, lock the bike, end the trip on your phone, your fare gets deducted from your balance. The entire process is simple and quick.

The GPS module is powered by an electricity generator, so that locations of all Mobikes accessible on its mobile app. Mobike offers two kinds of bikes: the regular Mobike and Mobike Lite, which is slightly lighter in weight and smaller in size, with a basket installed in the front. The price of a 30-minute ride is affordable, varying from 0.5 RMB (Lite version, $0.7) to 1 RMB (Regular version, $0.14), which isn’t really a big deal for most white-collars in tier-1 Chinese cities.

People riding yellow Ofo bikes in Tianhe District, Guangzhou

Similar to the car-sharing battlefield, Mobike is not the only option of getting a quick, easy and cheap bike ride in China. Ofo, the main competitor of Mobike, recently received “tens of millions of US dollars” from Didi Chuxing, who ended China’s ride-hailing war by acquiring Uber China just a few months ago. Different from Mobike with GPS modules, Ofo maintains a lower cost by simply using passcode locks (passcode is revealed on Ofo app) but this makes it harder for customers to locate their nearest bikes available. From my experience, although Ofo bikes are almost everywhere in Beijing and Guangzhou, locating an Ofo bike still takes some effort.

My Ofo ride in Guangzhou

The price of an Ofo ride isn’t different from regular Mobike, although a Lite version isn’t offered. The only difference is, Mobike requires 299 RMB ($43) of deposit while Ofo only asks for 99 RMB ($14). This is because the cost of an Ofo bike is apparently lower, due to the absence of GPS modules. According to its investor, an Ofo bike needs 2 months to recover its cost, whereas Mobike, which utilizes more advanced technologies and possesses better quality bikes, could take a lot longer.

Nevertheless, new competitors have been joining the industry since new bikes of different colors are emerging on roadsides. While both Mobike and Ofo are at Series C, newcomers including Shanghai-based hellobike and Tianjin-based Bluegogo are under earlier investment stages. My friend says, there isn’t much chance for newcomers, since there are probably not a lot of colors they can pick.

Colorful bikes spotted in Guangzhou (Mobike, Bluegogo, Xiaoming)

This new competition could potentially turn into another Didi-Uber war. The good news on this battlefield is, I can finally hang out around the city with my dad who doesn’t seem to enjoy walking.