Bicycle sharing is a service providing bicycles for shared (rental) use around subway stations, bus stations, residential areas, commercial districts, campus and other public places. Individuals do not have to park the bikes at designated locations. Bicycle sharing first appeared in 2014 in China, became popular in 2015 and boomed in 2016.
It provides a solution to the “last mile” short-distance transfer between bus stops or subway stations and home, work or shopping venues.
The service is charged on a time basis. It usually charges on a half-hour basis and any time less than half an hour is considered as half an hour. For example, Mobike and ofo both charge CNY 1 for half an hour. Alternative charges can be as low as CNY 0.5 for half an hour. In addition, users need to pay deposits to service providers. In China, some bicycle sharing companies target at cities across the country, but some also focus on a particular region. With a increasing number of bicycle sharing companies, market competition has become more intense.
According to CRI, the production volume of bicycles in China was 60 million in 2016 and has been declining in recent years. However, the fast development of bicycle sharing since the second half of 2016 brought new opportunities to the bicycle industry by creating demands for 1 million bikes per month. CRI estimates that by the end of 2016, the supply of sharing bicycle had exceeded 3 million and is increasing by 1 million per month. There had been 18 million bicycle sharing users by the end of 2016 and will increase by 200,000 per month in 2017.
While bringing convenience for residents, the industry is faced with a number of problems. Due to the non-docking nature of bicycle sharing, many users park bike wherever they want — even on motor lanes or pedestrian lanes. In many places, traffic police have detained sharing bicycles because of illegal parking. In addition, these bikes are also being vandalized and stolen.
According to CRI, the nature of bicycle sharing is nothing different from other rental services. Companies rent vehicles that they own. What attracts investors is the integration of rental services with the Internet or mobile Internet, such as GPS and mobile payment. Despite various difficulties, bicycle sharing will continue to grow and attract a lot of investors in the next few years.