Bike sharing is going global but regulations could tie it down

Stricter regulations on bike-sharing are threatening the survival of operators in China, but experts don’t think they will keep the trend from snowballing.

Zoey Chong Reporter
Zoey is CNET's Asia News Reporter based in Singapore. She prefers variety to monotony and owns an Android mobile device, a Windows PC and Apple's MacBook Pro all at the same time. Outside of the office, she can be found binging on Korean variety shows, if not chilling out with a book at a café recommended by a friend.
Zoey Chong
5 min read
Numerous Shared Bikes Piled Up In Xiamen

Bikes are piling up in China, and authorities have decided they've had enough.

Greg Baker/AFP/Getty Images

Bike-sharing is gaining traction globally, but trouble is brewing in China.

Authorities in China's Guangzhou and Shenzhen last week told local ride-sharing operator Didi Chuxing that it can't bring its newly launched bike-sharing services -- announced in January -- into the cities.

Ride sharing has taken off in recent years, particularly in China. Didi famously acquired Uber's business in the country in 2016. The market in China crossed $1 billion in value last year, with Mobike and Ofo operating as the biggest bike-sharing providers locally. As of this February, there are 77 bike-sharing providers in China (of which 20 or so have shuttered their businesses), with 23 million shared bikes on the streets.

Despite Shenzhen's rejection, Didi went on to put about 20,000 of its bikes at various locations in the city. This prompted local authorities to issue a statement demanding the company remove the bikes immediately or face penalties.

If granted permission, Didi's new app would have given its registered users -- over 450 million of them -- the convenience of access to bikes from itself and other partners, which include Ofo and Bluegogo. But Shenzhen's authorities have good reason to reject Didi's request.

Mountains of bikes are dumped carelessly along the streets in China. The built-up mess eventually proved too much for cities to handle, with municipal governments ordering companies to take responsibility in removing improperly parked bikes and to stop adding new ones. In some cities, such as Guangzhou and Shenzhen, authorities require companies to file a request before they can put new bikes on the streets.

Big business

Bike-sharing refers to schemes that let users hire a bike for brief periods at budget-friendly costs. There are two types of bike-sharing types: docked and dockless. The dock-based system has riders return bikes to designated stations, while the more popular dockless system allows bikes to be left anywhere along the pavement at the end of a trip. 

China, where bike-sharing providers typically adopt a dockless system, is a huge fan of bike sharing. Three out of every four shared bikes globally are found in the country, which also embraced the scheme in an attempt to reduce pollution in its cities. 

Cyclists also enjoy the convenience that bike-sharing brings. 

"It's great to be able to grab a bike whenever you need one," Clara Tai, a 37-year-old Singaporean homemaker living in Beijing told me. "Bike-sharing fills the gap when I need to travel that short distance where hopping onto a car or walking to catch a bus doesn't make sense."

As a result of the bike-sharing boom, the market is becoming overcrowded though. This can be especially frustrating, Tai notes, as each company requires users to pay a deposit of around $15 before their first ride.

Way before China made bike-sharing cool, a similar scheme first appeared in 1965 in Amsterdam. It was shut down within days because people either stole the shared bikes or vandalised them. Three decades later, bike-sharing is back but the problems associated with it never went away. Riders are still subjecting shared bikes to misuse, including theft and vandalism. Indiscriminate parking is also a huge problem.

Tai observed the same problem in Beijing, adding that issues include a disregard for traffic rules and bike-hogging. "Riders [need to practice] civic-mindedness," she said.


Tighter control

The government's insistence on controlling local business in China means bike-sharing issues are exacerbated in the country. In a bid to strengthen surveillance efforts, the Chinese Communist Party has demanded Mobike and Ofo hand over data collected from the microchips that track their bikes' movements. Mobike is resisting the CCP's request over user privacy concerns, according to the Japan Times. The Party in November sent members to work at Mobike's Beijing headquarters to ensure the operator is entirely controlled by its leadership.

Similar road bumps have surfaced in other countries. This week Singapore passed new rules to fight abuse in bike sharing.

The rules include new licensing fees and a three-strike policy that will temporarily bar repeat offenders from using shared bikes if they're found to have left their bikes improperly parked three times in a calendar year. Authorities will also limit the fleet size of every operator, which is reviewed every six months.

Young people ride the Ofo bikes on city street.  In the
Zhang Peng/LightRocket via Getty Images

"Regulators throughout the world are converging on entry control and licensing as a solution because there is simply no self-restraint in the market," said Dr. Walter Theseira, a transport economist at the Singapore University of Social Sciences.

"Bicycles [and market entry] are cheap, and investors don't appear particularly concerned with profitability at present. This means there is little incentive for curbing bicycle growth, and every incentive to keep adding more bicycles to the market," he added.

Problems are less serious in Europe and the US, where preemptive measures such as a restriction on bike numbers already exist. The biggest Mobike fleet in Europe, for instance, comprises only "a couple of thousand" bikes, according to Niccolo Panozzo, a development officer at the European Cyclists' Federation.

Panozzo added that cities are embracing a "multi-operator environment" which has resulted in a hybrid service that sees dock-based and dockless systems co-existing in cities: in San Francisco, which had previously barred dockless bike-sharing programmes, for instance, Uber is working with local company Jump to pilot-testing such a scheme called Uber Bike. People can locate Jump's bikes using the main Uber app, which indicates them with little bikes instead of cars. Riders, however, will still have to ensure the bikes are locked to any public rack after use.

"The bike-sharing culture needs to be responsible," urged Theseira.

As interest continues to rise, authorities everywhere will have to deal with mountains of rusting bikes hogging their streets too. But experts believe cities and operators will find a way to make bike-sharing work, even in China. "One [possibility] is that government regulation restricts entry, allowing the market to rationalise prices and capacity," Theseira suggested.

Does that mean that bike-sharing is here to stay, messy mountains of metal and all? It sure sounds so. Didi told CNET that it's in "constructive communication" with authorities on maintaining the sustainable development of bike-sharing. But before you ride off on one of those brightly coloured two-wheelers, remember to cycle safely, and think twice about where you leave the bike. 

Watch this: Smacircle's folding e-bike has crazy transformative design

The Smartest Stuff: Innovators are thinking up new ways to make you, and the things around you, smarter.

Blockchain Decoded:  CNET looks at the tech powering bitcoin -- and soon, too, a myriad of services that will change your life.