Bikes Are Coming Back to Our Life
ecades ago bicycles lost their place as a primary mode of urban transport in many cities from Los Angeles to Beijing, with a few exceptions such as Copenhagen and Amsterdam. Now, with the boom in bike-sharing, the bicycle is coming back to take its well-deserved role in cities. Unless we screw it up.
Since the early 2000s, bike-share systems started to pop up around Europe. China is now host to most shared bikes thanks to public incentives in last 5 years. Recently, 3 bike-share companies in China, Mobike, Ofo and Bluegogo, have raised collectively $1 billion, igniting a bike-share boom around the country. In most metropolises of China there are now several networks of bike rental providers one can choose from, with tens of thousands of bikes belonging to each.
Until only two years ago, bike-sharing was not considered profitable without public subsidies due to expensive technology. However startups like Donkey Republic have managed to change that perception. It is likely we will see new bike-share systems spread in European cities in no time. So what’s to worry?
The Bicycle’s Uber Moment?
Digitalising the taxi industry with mobile technology and algorithmic optimisation seems like a good idea. But the path Uber took with its aggressive style has created backlash against sharing economy platforms. Uber simply ignored, or did not offer convincing solutions for, how the existing taxi companies were supposed to cope with the Uber cars in the market.
In the meanwhile, Uber poured money into their model to show traction with its drivers, and made huge losses in China, Europe and still in many of the states in the USA. While riders and Uber drivers benefited from the money invested to make the system look like a success, some knew that this was just predatory pricing to curb competition. Once Uber established dominance in a city, the rider prices went up, while drivers took less – the company started to show the world how it would look if they took it all.
So, it should be no surprise to Uber that regulators in European cities stepped in. Regulators want to provide market conditions for healthy competition, and achieve a long-term sustainable market.
Now 3 bike-share companies in China, Mobike, Ofo and Bluegogo look to be following the same path. They are engaged in a race to build the largest fleet and assert market dominance by pushing tens of thousands of bikes onto the streets of cities in Asia, Europe and the U.S.. Mobike is headed by an ex-UberChina executive, while Ofo is funded by Didi Chuxing which bought the UberChina operation in 2016. Like Donkey Republic, they have established a genuinely disruptive model that greatly reduces the costs of deploying share bikes. However, unlike us, they are driven by the ambition of big capital to crush any other system by sheer force, price dumping and filling up the cities with bicycles. This approach, unregulated, compromises efforts for optimal use of city space as well as efficacy of transport solutions.
The race in which these capital-rich companies are now engaged in will create a new backlash in European cities. Such backlash could easily end up with a ban on the privately-run bike-share systems. This would be a second death for the bicycle at the hands of capital markets. The bike-share industry needs the proper regulatory framework to allow innovation and value to arise.
At Donkey Republic, we take pride in our service thinking and collaboration with various stakeholders to create a bike-share model that benefits the city most. We believe that to create a great mobility solution, one doesn’t need to be aggressive, but cooperative. Cities will soon need to regulate the bike-share markets, just like they did with taxis in the old days, and car-ride services more recently. We believe we can be part of the solution rather than creating a new problem.
Since the early 2000s, bike-share systems started to pop up around Europe. China is now host to most shared bikes thanks to public incentives in last 5 years. Recently, 3 bike-share companies in China, Mobike, Ofo and Bluegogo, have raised collectively $1 billion, igniting a bike-share boom around the country. In most metropolises of China there are now several networks of bike rental providers one can choose from, with tens of thousands of bikes belonging to each.
Until only two years ago, bike-sharing was not considered profitable without public subsidies due to expensive technology. However startups like Donkey Republic have managed to change that perception. It is likely we will see new bike-share systems spread in European cities in no time. So what’s to worry?
The Bicycle’s Uber Moment?
Digitalising the taxi industry with mobile technology and algorithmic optimisation seems like a good idea. But the path Uber took with its aggressive style has created backlash against sharing economy platforms. Uber simply ignored, or did not offer convincing solutions for, how the existing taxi companies were supposed to cope with the Uber cars in the market.
In the meanwhile, Uber poured money into their model to show traction with its drivers, and made huge losses in China, Europe and still in many of the states in the USA. While riders and Uber drivers benefited from the money invested to make the system look like a success, some knew that this was just predatory pricing to curb competition. Once Uber established dominance in a city, the rider prices went up, while drivers took less – the company started to show the world how it would look if they took it all.
So, it should be no surprise to Uber that regulators in European cities stepped in. Regulators want to provide market conditions for healthy competition, and achieve a long-term sustainable market.
Now 3 bike-share companies in China, Mobike, Ofo and Bluegogo look to be following the same path. They are engaged in a race to build the largest fleet and assert market dominance by pushing tens of thousands of bikes onto the streets of cities in Asia, Europe and the U.S.. Mobike is headed by an ex-UberChina executive, while Ofo is funded by Didi Chuxing which bought the UberChina operation in 2016. Like Donkey Republic, they have established a genuinely disruptive model that greatly reduces the costs of deploying share bikes. However, unlike us, they are driven by the ambition of big capital to crush any other system by sheer force, price dumping and filling up the cities with bicycles. This approach, unregulated, compromises efforts for optimal use of city space as well as efficacy of transport solutions.
The race in which these capital-rich companies are now engaged in will create a new backlash in European cities. Such backlash could easily end up with a ban on the privately-run bike-share systems. This would be a second death for the bicycle at the hands of capital markets. The bike-share industry needs the proper regulatory framework to allow innovation and value to arise.
At Donkey Republic, we take pride in our service thinking and collaboration with various stakeholders to create a bike-share model that benefits the city most. We believe that to create a great mobility solution, one doesn’t need to be aggressive, but cooperative. Cities will soon need to regulate the bike-share markets, just like they did with taxis in the old days, and car-ride services more recently. We believe we can be part of the solution rather than creating a new problem.
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