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[News] China's Shared Bicycle – Ofo, Mobike
Shared bicycles are a type of new eco-friendly shared economy that uses part-time lease models, and are a service to rent and return bicycles at rental locations located around the city for a fixed fee. Shared bicycle is a new innovation granted by the Internet that provides an experience in everyday life that benefits can be sought through the acquisition of a right of use, not ownership, and gives an easy chance to experience a shared economy. Large-scale investment attraction by shared bicycle operators has been possible as services, which have been mostly conducted within schools since 2016, have been available in cities, and competition within the market has been intensifying.
<The Case of Sharing Bicycles in China>
As of the end of 2017, there were 23 million shared bicycles deployed around the world, with about 400 million users, the report showed. Among them, China has 2.2.1 billion users, with two of China's leading shared bike platform operators, Oo and Mobike, controlling 90 percent of China's shared bike market, and making inroads into more than 20 foreign countries and 300 cities. In August 2017, the Chinese government established mechanisms to meet urban vehicle capacity, parking facilities and demand for public outings, and, second, to enhance the network and accessibility of bicycle roads through reasonable layout of bicycle transport networks and station facilities, and third, to designate areas and sections unfit for use as bicycle parking lots as negative lists, fourth, and to crack down on the online rental of visa-only parking spaces. Seventh, by securing basic data and strengthening the role of the shared bicycle industry, association, and industry federation, the management plan involving all interested parties was proposed.
Let's list the positive effects in detail. As people's income levels have improved in recent years, so have their desire for quality of life. Shared bikes are becoming a part of a shared economy that can not only solve complex urban traffic problems but also reduce carbon emissions, enabling sustainable development. China's shared bicycle range reached 299.4.7 billion kilometers and reduced carbon emissions by about 6.99 million tons, the report showed. The eco-friendly bike-sharing service, which values health and cherishes life, has solved the problem of "the last 1 kilometer," a problem in urban transportation, which also meets the eco-friendly development goal.
<Comparison of Shared Bicycles>
Second, the most important thing for a company's survival is the constant creation of cash flow. For shared bicycles, tens of millions of bicycles need a huge amount of money to cover their input, maintenance and other maintenance costs. However, due to the presence of cheap buses and traditional public bicycles, price increases for shared bikes are practically limited. Therefore, the deposit collected from users in addition to the shared bicycle service charge has become an important source of revenue for the platform operator. According to China's , interest income or other income generated through a shared bicycle user deposit (such as financial products or stocks) is attributed to the shared bicycle platform operator. According to data released by App Annie, there are 5.12 million people on the mobile bike every month. Calculating that each user paid 299 yuan in deposit, the total amount of the deposit that Mobike obtained amounts to about 1.5 billion yuan. If the user continues to use the bicycle, the 299 yuan deposit paid will continue to be stored in the MoVike. In theory, during the period during which the deposit is deposited, Mobike can generate revenue from the fund. However, since the deposit itself does not belong to the shared bicycle platform assets, it is usually operated by banks and trust organizations by purchasing low-risk, short-cycle, and other means. For example, assuming that Mobike buys corporate-financed products with a maturity of three months and an annual interest rate of four percent from the bank, the monthly earnings of the Mobike are about five million yuan. As such, guarantees for the use of shared bicycles are becoming an important source of revenue for the platform.
Unlike positive effects, negative effects also exist. Shared bicycles are a new type of business, and the purpose of sharing is good, but the lack of a sense of community for users to use and maintain has exposed problems in many cities, and the social costs are also known to be considerable. First of all, if a bicycle is parked randomly due to a parking problem, causing a disturbance to passersby and damaging the city's appearance, secondly, when immoral activities such as damage and theft cause waste and negatively affect the surrounding environment. Solving the theft problem, the Oo or Mobike runs a bicycle with GPS.
<Chinese Shered Bicycle Tomb>
The second negative effect is the reduction in service use due to air pollution. Bicycles are eco-friendly transportation that contributes to air purification, but on the contrary, there is a problem that riding a bicycle in a polluted environment can have an adverse effect on users' health. Reducing service utilization due to air pollution is already a problem in China. According to a report by China's market research agency Iris Research, the utilization rate of shared bicycle services decreases 5.7 percent at a time of poor air quality. For this reason, related services are doing better in Guangzhou and Shenzhen, which have relatively good air quality, rather than in Shanghai and Beijing, where air pollution is high. The respiratory problems caused by fine dust are being directly experienced by many people, and fine dust is now even cited as the cause of cancer. The problem of air pollution is expected to be the biggest obstacle for bike-sharing operators.
China's shared bicycle market is led by a startup company called Oo, which was founded in 2014 by graduate students of Beijing University's business administration department, and Mobike, which was established in 2015. As of March 2017, Mobike had made inroads into 33 Chinese cities and Singapore, while Oo has made inroads into 43 Chinese cities and in San Francisco, Singapore and London, the United States. Since November 2016, the number of shared bicycle users in China has exploded, bringing the figure to about 30 million as of March 2017. Oppo is a non-fixed shared bike platform established in 2014, offering more than 10 million bicycles in more than 250 cities in 21 countries around the world, with daily users reaching 32 million, China's first shared bike platform. Oppo, which was established with the ideology of "Shared Economy + Smart Hardware, Solving the Last 1km Transportation Problem," initially operated on school campuses, went to society from 2016, and operated in 21 countries and 250 cities around the world as of the end of 2017.
With the birth of a shared bicycle, the user can download Oppo's APP, sign up for membership, pay a deposit of 99 yuan, and enter the bicycle number if necessary. The service charge is 1 yuan/hour (approximately 168 won/hour), and 0.5 yuan/hour for students (approximately 84 won/hour)99
<Mobike>
Founded in 2015, Mobike is the fourth largest-ever entrepreneur among unicorn companies worldwide (non-listed companies with a business value of $1 billion or more). More than three years after the company's establishment and one year into overseas markets, Mobike already operates in 200 cities in 15 countries, including China. It owns and operates 8.5 million bicycles for 200 million members worldwide. It has 30 million people using bicycles per day and 2.7 billion U.S. dollars worth of business, with investments from Tencent and others amounting to 1 billion dollars. Using advanced technologies such as body, blow-proof tires, and soccer wards made of aluminum overall through professional design, the mobile bike has a low failure rate, which makes maintenance costs cheaper. Mobike is a shared bicycle platform operator with the most technical patents and can track the location of real-time bicycles with APP. If you open a mobile APP, you can find a mobile bike around you, and if you take a QR code, the car will be unlocked. The deposit is 299 yuan (about 50,000 won) and the service charge is 1 yuan/30 minutes.
Shared bicycles are a type of new eco-friendly shared economy that uses part-time lease models, and are a service to rent and return bicycles at rental locations located around the city for a fixed fee. Shared bicycle is a new innovation granted by the Internet that provides an experience in everyday life that benefits can be sought through the acquisition of a right of use, not ownership, and gives an easy chance to experience a shared economy. Large-scale investment attraction by shared bicycle operators has been possible as services, which have been mostly conducted within schools since 2016, have been available in cities, and competition within the market has been intensifying.
<The Case of Sharing Bicycles in China>
As of the end of 2017, there were 23 million shared bicycles deployed around the world, with about 400 million users, the report showed. Among them, China has 2.2.1 billion users, with two of China's leading shared bike platform operators, Oo and Mobike, controlling 90 percent of China's shared bike market, and making inroads into more than 20 foreign countries and 300 cities. In August 2017, the Chinese government established mechanisms to meet urban vehicle capacity, parking facilities and demand for public outings, and, second, to enhance the network and accessibility of bicycle roads through reasonable layout of bicycle transport networks and station facilities, and third, to designate areas and sections unfit for use as bicycle parking lots as negative lists, fourth, and to crack down on the online rental of visa-only parking spaces. Seventh, by securing basic data and strengthening the role of the shared bicycle industry, association, and industry federation, the management plan involving all interested parties was proposed.
Let's list the positive effects in detail. As people's income levels have improved in recent years, so have their desire for quality of life. Shared bikes are becoming a part of a shared economy that can not only solve complex urban traffic problems but also reduce carbon emissions, enabling sustainable development. China's shared bicycle range reached 299.4.7 billion kilometers and reduced carbon emissions by about 6.99 million tons, the report showed. The eco-friendly bike-sharing service, which values health and cherishes life, has solved the problem of "the last 1 kilometer," a problem in urban transportation, which also meets the eco-friendly development goal.
<Comparison of Shared Bicycles>
Second, the most important thing for a company's survival is the constant creation of cash flow. For shared bicycles, tens of millions of bicycles need a huge amount of money to cover their input, maintenance and other maintenance costs. However, due to the presence of cheap buses and traditional public bicycles, price increases for shared bikes are practically limited. Therefore, the deposit collected from users in addition to the shared bicycle service charge has become an important source of revenue for the platform operator. According to China's , interest income or other income generated through a shared bicycle user deposit (such as financial products or stocks) is attributed to the shared bicycle platform operator. According to data released by App Annie, there are 5.12 million people on the mobile bike every month. Calculating that each user paid 299 yuan in deposit, the total amount of the deposit that Mobike obtained amounts to about 1.5 billion yuan. If the user continues to use the bicycle, the 299 yuan deposit paid will continue to be stored in the MoVike. In theory, during the period during which the deposit is deposited, Mobike can generate revenue from the fund. However, since the deposit itself does not belong to the shared bicycle platform assets, it is usually operated by banks and trust organizations by purchasing low-risk, short-cycle, and other means. For example, assuming that Mobike buys corporate-financed products with a maturity of three months and an annual interest rate of four percent from the bank, the monthly earnings of the Mobike are about five million yuan. As such, guarantees for the use of shared bicycles are becoming an important source of revenue for the platform.
Unlike positive effects, negative effects also exist. Shared bicycles are a new type of business, and the purpose of sharing is good, but the lack of a sense of community for users to use and maintain has exposed problems in many cities, and the social costs are also known to be considerable. First of all, if a bicycle is parked randomly due to a parking problem, causing a disturbance to passersby and damaging the city's appearance, secondly, when immoral activities such as damage and theft cause waste and negatively affect the surrounding environment. Solving the theft problem, the Oo or Mobike runs a bicycle with GPS.
<Chinese Shered Bicycle Tomb>
The second negative effect is the reduction in service use due to air pollution. Bicycles are eco-friendly transportation that contributes to air purification, but on the contrary, there is a problem that riding a bicycle in a polluted environment can have an adverse effect on users' health. Reducing service utilization due to air pollution is already a problem in China. According to a report by China's market research agency Iris Research, the utilization rate of shared bicycle services decreases 5.7 percent at a time of poor air quality. For this reason, related services are doing better in Guangzhou and Shenzhen, which have relatively good air quality, rather than in Shanghai and Beijing, where air pollution is high. The respiratory problems caused by fine dust are being directly experienced by many people, and fine dust is now even cited as the cause of cancer. The problem of air pollution is expected to be the biggest obstacle for bike-sharing operators.
China's shared bicycle market is led by a startup company called Oo, which was founded in 2014 by graduate students of Beijing University's business administration department, and Mobike, which was established in 2015. As of March 2017, Mobike had made inroads into 33 Chinese cities and Singapore, while Oo has made inroads into 43 Chinese cities and in San Francisco, Singapore and London, the United States. Since November 2016, the number of shared bicycle users in China has exploded, bringing the figure to about 30 million as of March 2017. Oppo is a non-fixed shared bike platform established in 2014, offering more than 10 million bicycles in more than 250 cities in 21 countries around the world, with daily users reaching 32 million, China's first shared bike platform. Oppo, which was established with the ideology of "Shared Economy + Smart Hardware, Solving the Last 1km Transportation Problem," initially operated on school campuses, went to society from 2016, and operated in 21 countries and 250 cities around the world as of the end of 2017.
With the birth of a shared bicycle, the user can download Oppo's APP, sign up for membership, pay a deposit of 99 yuan, and enter the bicycle number if necessary. The service charge is 1 yuan/hour (approximately 168 won/hour), and 0.5 yuan/hour for students (approximately 84 won/hour)99
<Mobike>
Founded in 2015, Mobike is the fourth largest-ever entrepreneur among unicorn companies worldwide (non-listed companies with a business value of $1 billion or more). More than three years after the company's establishment and one year into overseas markets, Mobike already operates in 200 cities in 15 countries, including China. It owns and operates 8.5 million bicycles for 200 million members worldwide. It has 30 million people using bicycles per day and 2.7 billion U.S. dollars worth of business, with investments from Tencent and others amounting to 1 billion dollars. Using advanced technologies such as body, blow-proof tires, and soccer wards made of aluminum overall through professional design, the mobile bike has a low failure rate, which makes maintenance costs cheaper. Mobike is a shared bicycle platform operator with the most technical patents and can track the location of real-time bicycles with APP. If you open a mobile APP, you can find a mobile bike around you, and if you take a QR code, the car will be unlocked. The deposit is 299 yuan (about 50,000 won) and the service charge is 1 yuan/30 minutes.