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Sport and Outdoors

This bike sharing company just got bought for $2.7 billion

Meituan-Dianping is China's version of Yelp, and it just dropped big money to own Mobike's orange two-wheelers.

mobikes-new-bikes-in-singapore

These orange two-wheelers have been bought over by Chinese lifestyle company, Meituan Dianping, for $2.7 billion.

Mobike

You may know bike sharing as the scheme that litters city streets with fluro-coloured bikes, but it's big business in China.

Meituan-Dianping is like Yelp in China, and it's dropped $2.7 billion to buy Mobike, South China Morning Post reported Wednesday.

Mobike, which first launched its bikes in China in 2016, is one of the largest bike-sharing providers worldwide with over seven million bikes in more than 180 cities across the globe. In China, the operator accounts for more than 70 percent of market share and remains a multibillion dollar unicorn. The company's orange two-wheelers went international last year, arriving Singapore last March.  Its biggest rival is Ofo, a Beijing-based bicycle sharing company founded in 2014.

The latest move follows Meituan's expansion into ride hailing services in China last month, competing with Uber slayer Didi Chuxing. Meituan isn't the first company to offer ride- and bike-sharing services under one roof. Alongside a platform that hosts services by other bike-sharing providers, Didi launched its own bikes called Qing Ju, although it ran into regulatory problems soon after. 

While the bike-sharing trend is receiving plenty of love from Asia because of the convenience it brings, some governments around the world aren't aren't as keen. Users have subjected shared bikes to abuse and errant parking, leading to unsightly crowds of brightly-coloured bikes all over the streets. To curb these problems, authorities have made it mandatory for bike-sharing companies to ensure their bikes are properly parked at public lots. In some cities, authorities are restricting the number of new bikes that can be added on the streets.

For bike-sharing companies, that means more costs incurred: Not only do damaged bikes have to be fixed (or thrown away), they now have to pay for manpower to move improperly parked bikes to the appropriate parking stations or risk a fine. It is estimated that Mobike owes more than $1 billion in debt, according to Chinese media, citing an internal financial report.

Meituan and Mobike did not immediately respond to CNET's request for comments.

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