How bike-sharing conquered China
The People's Republic was a nation of cyclists. Now start-ups want to revive that tradition with app-based hire bikes rolling out across the country.
The People’s Republic was a nation of cyclists. Now start-ups want to revive that tradition. Hire bikes that can be booked by app are appearing everywhere across the country. Handelsblatt correspondent Stephan Scheuer tried it out for himself.
Background
In 2016 and 2017 a wave of colourful hire bikes rolled across China’s cities: Ofo (yellow), Mobike (orange) and dozens of smaller providers competed for market share. Backed by billions in venture capital, millions of bikes were rolled out. Ofo and Mobike together raised more than two billion dollars in investor funding.
The sector emerged from virtually nothing. Unlike classical bike-sharing systems with fixed docking stations, Chinese bikes could be parked anywhere and unlocked by app – a design that dramatically accelerated deployment. At the same time it gave rise to a phenomenon that attracted global attention: vast mountains of bikes on public squares, confiscated bikes on transport authority premises, bicycle graveyards visible in satellite images.
The bubble burst quickly. Ofo ran into severe liquidity problems in late 2018 – millions of customers waited months in vain for the return of their deposit of 99 to 199 yuan. The company shrank to a fraction of its former size within months. Mobike was acquired by platform company Meituan in 2018, which later integrated the brand into its own ecosystem and renamed it Meituan Bike.
What remained is a consolidated market with three large providers: Meituan, Hellobike (part of the Alibaba family) and Didi. Prices are now more realistic, profitability better and bike numbers limited. In Chinese metropolises, bike-sharing has become a routine mobility option – the model fundamentally transformed the market, just not in the way early investors had imagined.
Internationally the Chinese model has been widely copied. Dockless bike-sharing spread globally in 2017 and 2018; Mobike was at one point active in 200 cities worldwide. Later the US and European e-scooter providers (Bird, Lime, Tier, Voi) followed a similar principle. Many of these companies have merged or withdrawn from markets in recent years – the underlying problem of the Chinese predecessors, an unclear business model combined with high operating costs, returned to haunt them too.