Why Can't Chinese Online Bike-Renting Platforms Repeat Uber And Didi's Success?

(Chinese Version)

After ride-sharing platforms became so successful in China, bike-renting becomes the hottest area for innovation and entrepreneurship in 2016 (Click here to read a previous article on TMTpost about the basic situation of the Chinese bike-renting platforms). Many pundits even predict that through disruptive innovation, Chinese bike-renting platforms can repeat the success of Uber and Didi and bring about another evolution in short-distance commuting area.

Chinese online bike-renting platforms did bring about some innovation, especially compared to previous public bike renting system in most first and second-tier cities in China. For example, they give up parking piles and no longer require users to park and lock bikes in designated areas. Instead, they allow users to rent bikes whenever they like and lock them whenever they ve reached their destination. As a result, bikes are scattered around cities in a dynamic instead of static manner, so that users can find the closest bike via GPS. On the surface, online bike-renting platforms do make it easier to rent bikes (since users no longer need to rent and return bikes in designated areas) and improve the efficiency.

However, it turns out that such business model relies too much on users manners, which makes it even harder to monitor the entire system. When many “shared” bikes have become “private”, these platforms can do nothing, because their can only monitor bikes through users own report.

A typical “Tragedy of the Commons”

However, it doesn t necessarily mean, I m afraid, that users who turn “shared” bikes into private must have low moral consciousness. Instead, online bike-renting platforms should have realized that users who turn to shared bikes often need them both on their way to the destination and on their way back. While they make it easier to park and lock share bikes, they fail to make it easier to find available bikes. After all, people do have a strong need to rent bikes on their way to the destination and on their way back, and turn “shared” bikes into private because it would be quite convenient.

Currently, however, online bike-renting platforms can do nothing but put more bikes across cities to make it easier for users to find available cars. In addition, although shared bikes on these platforms seem to be scattered more dynamically, they will still gradually be scattered in a more static manner, since most users need shared bikes on fixed routes.

While online bike-renting platforms make it easier to rent bikes, especially compared to previous public bike renting system, they fail to regulate the entire system and users behavior properly. As a result, in areas where shared bikes are highly needed, it will be really hard to find available bikes, because most users would turn “shared” bikes private. But how can these users to be blame for? Bad money drives out good, users who come first and turn “shared” bikes private will drive out users who don t, yet these online bike-renting platforms did nothing to prevent this.

Still, how can they mend to fold?

While Mobike lowers the risk of theft by increasing the weight of its bikes and forbidding users to ride bikes into residential communities, office buildings and large-scale office parks, which undermines user experience and makes its goal, that is, to solve people s short-distance commuting problem, sound ridiculous, ofo controls the monitoring cost by limiting users to use its bike only in college campuses.

However, Mobike s measures only increase the cost of improper usage, but can t solve the problem fundamentally, while ofo still can t monitor each bike within college campuses.

Of course, they can use dynamic password locking, real-time GPS position monitoring and even in-bike cameras to improve the cost of improper usage. However, if they do so, these measures will not only increase cost, but also lead to more inconvenience, which will make them look more similar to public bike-renting systems.

Fundamentally, online bike-renting should be about an effective mechanism to distribute resources among users. Currently, Chinese online bike-renting platforms attach too much importance to convenience and fail to establish order within its system. As a result, a typical “Tragedy of the Commons” occurs and public interests are undermined by the few ill-mannered users.

To solve this problem, however, they can do nothing but follow the traditional public bike-renting system and require users to park bikes in designated parking areas. Mobike has already been testing “Recommended Parking Areas”, but I don't think that would work at all. As long as users are not required to return and park shared bikes in designated areas, they will have the incentive to turn them private. Still, online bike-renting platforms can become smarter and decide designated parking areas through user behavior analysis based on adequate data collected every day.

After all, there s nothing new under the sun. Chinese online bike-renting platforms can t be referred to as part of the sharing economy. Although ofo has been encouraging users to share their own bikes with others, few people participate. After all, not everybody is as selfless as Lei Feng, the well-known Chinese soldier known for his selflessness, modesty and dedication. Compared to risk of theft and damage, the little benefit they gain through sharing bikes means nothing. That s why ride-sharing platforms don t require car-owners to share their cars with strangers. Maybe, ofo still needs to buy enough bikes by itself to provide adequate number of bikes for users to rent.

To be frank, car-owners are not actually sharing their cars. Instead, they just share their empty seats with others and get paid in return. Following this logic, if online bike-renting platforms really want to become sharing platforms, they will have to roll out bike-pickup service and give huge subsidy to bike-owners. Only then will bike-owners be willing to join this “game”.

It s not just about GPS

Online bike-sharing becomes so popular because it looks like online ride-sharing on the surface. However, why can t online bike-renting platforms match users need with bikes location as did online ride-sharing platforms?

Well, every car has its own “guardian”, that is, the driver. Thus, online ride-sharing platforms match users needs with the location of drivers smartphones, not simply cars location.

While drivers can pick up passengers after picking up an order through online ride-sharing platforms, users of online bike-sharing platforms have to find the bike themselves. While online ride-sharing platforms can real-time monitor cars and users location, online bike-sharing platforms can t do so due to high cost. While online ride-sharing platforms don t need to worry about theft, online bike-sharing platforms have to worry about bike-theft or improper usage and maintain convenience at the same time.

The struggles Chinese online bike-renting platforms are going through should tell us: sharing economy is not without threshold, bike-sharing can t be achieved simply by installing GPS on bikes, and success is not gained without difficulty. Instead, lots of obstacles, caused by human nature, limited resources, etc., have to be overcome in order to really revolutionize traditional way of life.

At present, there are few cities in China (besides Hangzhou) where public bike-renting system function well. The inconvenient truth is that to improve efficiency of the public bike-renting system, the current online bike-renting system might not be a good example, since it relies too much on human nature.

In conclusion, the only thing we know for sure is that to help people solve the short-distance commuting problem fundamentally, a diverse range of solutions should be adopted, from upgraded public transportation, shared tricycles and bikes to shared skateboards and even balance bikes.

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[The article is published and edited with authorization from the author @Zhang Yuan please note source and hyperlink when reproduce.]

Translated by Levin Feng (Senior Translator at PAGE TO PAGE), working for TMTpost.