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Dockless bike-sharing business model "a joke" says urban transport expert

Suggests schemes can only survive long-term with government subsidies

“The good times are over,” for dockless bike-sharing, according to Singapore-based urban transport expert Professor Park Byung Joon. "If you look at bicycle-sharing, no one is making any money anywhere in the world. From a business point of view, this is a joke."

Late last year, hordes of angry customers gathered outside the Beijing headquarters of dockless bike-share firm Ofo to demand their deposits back.

The firm was put on a government black list for failing to pay its debts. Founder Dai Wei said Ofo had “borne immense cashflow pressure” over the previous 12 months and that he had considered filing for bankruptcy.

Rival Mobike meanwhile has closed down its largest UK operation in Manchester and The Newspaper reports that its goal is now to be operational only in its native China.

This week it became the third major operator to withdraw from Singapore and Professor Park Byung Joon from the Singapore University of Social Sciences (SUSS) is not surprised.

“They really don't have any viable business plan,” he said of dockless bike-share firms. “The good times are over. Now we have to pay."

Operators have attracted millions from investors in large part thanks to the valuable data that users share by using the schemes. In China in particular, this investment has led to rival firms flooding the streets with bikes in the hope of cornering the market in each city.

"It is a business model that defied gravity because there was a lot of cheap money pumped into it,” said Byung Joon’s colleague, transport economist Walter Theseira. "Gone will be the days of just putting bikes everywhere.”

Both experts said current fares were never likely to have covered rising operational costs. “Commuters using public transport already receive a heavy subsidy,” observed Byung Joon. “If that is the case, then why shouldn't they do it for bicycles?"

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7 comments

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velochris | 5 years ago
1 like

A genuine shame on society.

I used the Mobikes in Manchester. They were reasonably priced and convenient.

The shame is twofold.

1. Such schemes should be government subsidise to promote health and reduce congestion.

2. You cannot blame any company or government for not doing the above when there are enough idiots in the world who feel it is acceptable to steal and wreck the bikes.

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Dnnnnnn replied to velochris | 5 years ago
0 likes

velochris wrote:

A genuine shame on society. I used the Mobikes in Manchester. They were reasonably priced and convenient. The shame is twofold. 1. Such schemes should be government subsidise to promote health and reduce congestion. 2. You cannot blame any company or government for not doing the above when there are enough idiots in the world who feel it is acceptable to steal and wreck the bikes.

Agreed. Given how much public transport is subsidised there is a good case for supporting a bike scheme in such a major city. Maybe a docked system would prevent some of the problems Mobike had? It's too easy for untethered bikes to be discarded thoughtlessly - or just chucked in the canal...

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Samtheeagle | 5 years ago
4 likes

General rule of thumb. If the product is free chances are you are the product.

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Dnnnnnn replied to Samtheeagle | 5 years ago
1 like

Samtheeagle wrote:

General rule of thumb. If the product is free chances are you are the product.

I do understand this but also wonder just how much the data a dockless bike firm would get from me would be worth... (maybe I'm not very data-dateable?).

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Butty | 5 years ago
2 likes

Operators have attracted millions from investors in large part thanks to the valuable data that users share by using the schemes.

And there you have the very reason for these bike schemes.

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Hirsute replied to Butty | 5 years ago
0 likes
Butty wrote:

Operators have attracted millions from investors in large part thanks to the valuable data that users share by using the schemes.

Let's say I cycle from Liverpool St to Trafalgar Square M to F so I'm a commuter and above average pay.
Not seeing how that is particularly valuable.

Avatar
Stratman replied to Butty | 5 years ago
2 likes

Butty wrote:

Operators have attracted millions from investors in large part thanks to the valuable data that users share by using the schemes.

And there you have the very reason for these bike schemes.

 

A certain type of investor sees the word ‘data’ and suddenly total nonsense is worth millions 

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