The Amazing Bike-Sharing Race
The week is not off to a good start for Chinese bike-sharing giant Mobike. Yesterday morning, it was reported that the company had been flagged by the National Enterprise Credit Information Publicity System as an “abnormal operation” because they could not be found at the address listed. Though company spokespeople quickly responded that Mobike has recently moved into new offices and not yet updated their contact details, the damage was done: Media (including today’s print edition of Global Times) are using the incident as a shady-sounding lead-in to report customer complaints about Mobike ranging from overcharging fees and difficulty getting deposits back.
Mobike’s rival, ofo, had its day in the limelight last week, both due to its special offer of free rides in the Beijing area during the second week of the Two Sessions and reports that its bikes were experiencing a high volume of vandalism and theft (and a few well-publicized arrests, link in Chinese), as their lack of a GPS tracking function makes them especially vulnerable compared to Mobike and other competitors. In all, as the bike-sharing arena grows bigger, so do their challenges, and companies are adding more and more features to stay competitive. TWOC has created the following guide to help you keep them all straight and highlight a few competitive strategies that these companies employ.
Here are your starters:
*Note: due to limits on our resources and patience for hair-splitting, we will only compare bikes that we’ve found in our part of eastern Beijing. We are also not advocating on behalf of any particular bike-sharing service (although our web manager, Ethan, would like it known that he really likes the public bicycles and disdains all these other private-sector upstarts). Sources include previous media reports and calls to company offices were no reports were available.
While ofo got all the headlines by connecting their free-rides offer to the Two Sessions, Bluegogo also offered free rides last week all around the country and announced on Friday (Chinese link) that they will continue the offer this week. Ofo has also tried out other free-ride schemes in the past, such as free rides on Mondays last December, and between 7 a.m. and 10 a.m., Monday to Friday, last week in cities other than Beijing. It was reported today in Kunming, where Mobikes are already free Fridays through Sundays, that Mobikes can be ridden for free Monday to Thursday this week between 10 a.m. and 4 p.m. While this is great for everyone who likes free stuff, one can’t help but think that it’s a race to the bottom.
Ofo has decided to make lemonade out of lemons: Sure, their relatively cheap bikes get vandalized a lot and are accused of breaking frequently due to low quality, so last week, it was reported that they’ve been offering full-time jobs as bike mechanics to those (usually) elderly, roadside bike-repairmen who are finding it harder and harder to make a living. One repairman told media (Chinese link) that ofo offered him six types of social insurance plus a housing fund. He also claimed that other bike companies made him offers, though didn’t specify which. The media report also framed the issue as “restoring the craftsmanship of a previous generation.” Well played, ofo.
Last November, Mobike founder Hu Weiwei said in a lecture, “Even if [the business] fails this time, it’s still an act of public service.” Clearly, ofo isn’t the only one creative (or desperate) enough to see silver lining in this situation.
The marketing of all of these bike companies emphasizes that bike-sharing is a “green” way to travel. ZX Bike trumpets its business model of recycling second-hand or abandoned bikes from the neighborhood to use in bike-sharing. Ofo has also partnered with organizations to host “low-carbon living” awarneness event in Xi’an last month and a bike festival in Chongqing over the weekend—at which 2,000 people rode ofo bikes across several university campuses, all in the name of championing “healthy and environmentally friendly transportation” of course.
Advertising and big data potential
This week, a blog post (in Chinese) by WeChat account CareerIn投行PEVC proposed a few ways that bike-sharing companies could turn a profit and get ahead of the competition in the future. One is by selling advertising space on the bikes, which can also utilize the bikes’ GPS function and data they collect about traffic patterns and routes to direct users to businesses on the way. Additionally, the blog post proposes that bike-sharing companies enter the B2B and C2C bike-lending arena (in which bikes are owned and lent out by the business or customer, instead of rented from the company). Are these hints of what’s to come?