In China, bike shares are all the frenzy. They're convenient since in the internet-connected nation, all you need is a phone to access them. Renting out a bike only costs cents and is as easy as entering a code on your phone.
However the country has a bike problem. In Shanghai alone, a city with a population of 24 million people, there's 1.5 million bikes on the streets, hung up in trees, or thrown into rivers. These bikes are all "dockless," so you can grab one from wherever and drop it off right outside of your destination.
Number of Public Bikes in 000's
The city is not realizing that there are far too many bikes available and not enough people to use them, leading to them being tossed into piles on sidewalks or lined up for miles. In some areas, it's so bad that you can't even walk down the sidewalk because of all the bikes. There's a black market opening up for bikes as well, fuelled by thieves stealing the bikes and selling them for parts. Renting a bike generally costs only a few cents overseas and around $1 per hour in the United States, which essentially means there's no economic limit to using the services.
Since these dockless companies don't require some sort of physical infrastructure, they could technically start up in any city they want to without asking for approval. But that could also mean some city officials who are less-than-happy to see this sort of scheme in the city could simply round up and dispose of the bikes, too. These companies need to be strategic about where they launch, often times opting for cities where they would be the only competitor to conquer all of the market share.
Earlier this year, the Shanghai municipal transportation bureau sent notices to bike sharing services in the city, demanding they stop adding new bikes to the streets and that they relocate all current bikes to bike racks.
So far, 150,000 of the bikes have been confiscated by the city and the largest operators in the city, Mobike and Ofo have agreed to help curb the issue. It's been recommended that the city implement some sort of licensing scheme to limit the amount of bikes available, but nothing like this has been worked on as of yet.
This isn't the first time a city has had to step in to stop bike overcrowding. In both Nanjing and Guangzhou, authorities have demanded that no new bikes be added to the systems.
News organizations throughout the country have had no issue with finding so-called bike "graveyards," where thousands of bikes are tossed and abandoned because of the surplus. The expansion of all these bike share networks is increasing rapidly because of huge funding rounds from the likes of Tencent and Alibaba, both internet conglomerates and competitors.
To make matters worse, Bluegogo, China's third-largest bike share company went bankrupt in November. Shortly after it had announced that, Green Bike-Transit had announced its intention to purchase the failing company, but not before it had already sent tens of thousands of bikes to dumps.
Bluegogo was founded in 2016 and in its brief stint, managed to raise more than ¥600,000,000 ($110 million CAD). The company still owes almost $40 million CAD to suppliers and had not been able to pay wages to all employees
The Ministry of Transportation has stepped in and released an official framework in an attempt to regulate the industry by trying to add new riders to the systems. Included in the framework is the requirement for riders to use their real names when registering, that nobody under age 12 can use the services and encouraged the companies to offer rides without first requiring some sort of deposit. The framework aims at promoting these bike sharing services, but leaves most of the regulation and policing up to the individual cities where they operate.
Mobike has previously expanded to England and Japan and is eyeing the US, but will face some stiff competition from Motivate, which runs the bike share programs in Boston, Chicago, New York City and Washington, to name a few. The US-based company is already profitable, but being able to leave a bike anywhere could appeal to a wide range of users. Ofo launched in Seattle just a few months ago with 1,000 bikes to start, but since the city has a rugged landscape, it might not find too much success there.
Toronto is seeing the beginning of the bike share revolution as well. There's already the city-owned Bike Share Toronto, but Dropbike recently launched here and has been testing dockless bikes around the University of Toronto and Humber College.