Bike sharing with Chinese characteristics

Image source Bady Qb/Splash

Mobike 摩拜单车 Bike sharing with Chinese characteristics

Overview

The challenge: China now has over 300 million vehicles and data shows that almost half of the world's most congested cities are in China. Such issues are very costly, both for the economy and public health.

The solution: shared smart and dockless bikes, located, unlocked and paid for using smartphones

What makes it circular? Multiple users can share and access seamlessly a form of urban transportation that reduces congestion and air pollution.

The benefits: increase the ‘10-minute radius’ of metro stations from 800 m (by foot) to 2-3 km (by bike). More convenient and affordable mobility system for urban dwellers. Lowers carbon emissions and air pollution.

The bike sharing phenomenon and impact

Mobike and other bike sharing companies have spread rapidly through Chinese cities and are transforming urban mobility by offering a solution to the first and last mile challenge.

Mobike officially launched in April 2016 in Shanghai and, within the first year’s operation, ‘Mobikers’ have collectively cycled over 5.6 billion kilometres. The resulting carbon emission reduction is estimated at more than 1.2 million tonnes, the same as taking 350,000 cars off the road for a year.

Mobikes are equipped with GPS and proprietary smart-lock technology which enables users to locate, reserve and unlock bikes with a smartphone. After reaching their destination, users can lock the bike and leave it on the roadside, making it available to the next rider.

Image source Alvan Nee/Splash
Image source Alvan Nee/Splash

The factors driving success

The rise in the sharing economy in China can be attributed to technology, social trends and a supportive policy framework.

Mobile payments in China have reached a record of CNY 81 trillion (USD 12 trillion) from January to October 2017, which was 50 times more than in the US. The bike sharing phenomenon has been driven by such digital enablement. If one has a smartphone, as over 700 million citizens do, you can find the nearest bikes via GPS, scan the QR code to unlock and pay a small fee through a mobile payment app. A social credit scheme, currently being tested, gives added benefits to high-rated customers, for example offering an exemption from paying a joining deposit.

Modern Chinese consumers are conditioned to be very adaptive to new business and service models. For young urban residents in particular, who face immense financial pressure as a result of the high housing prices, convenient and cheap access to services could be preferable over ownership of more costly assets.

Sharing economy businesses have also benefited from the Chinese government’s explicit backing, as this area is considered an important engine for future economic growth. In fact, bike sharing has been named as one of the four great innovations of modern China, along with high-speed rail, e-commerce and mobile payment. Multiple national ministries have issued “Guiding Opinions on Promoting the Development of the Sharing Economy”, which highlighted an open and supportive attitude, as well as the recognition that regulations would need to adapt to such new business models.

What makes it really innovative

Mobike owns 28 patents on its technology, such as the solar battery and smart lock system. It has also partnered with Qualcomm and China Mobile to further improve IoT technology on Mobike’s smart locks. The connectivity allows for real-time continuous monitoring of the bike’s status and enables staff to get bikes to the locations where they are needed the most. In periods of high demand, Mobike offers users incentives to find bikes in remote locations and ride them to popular areas of the city.

This was further enhanced by Mobike’s big data platform which collects mobility data from eight million bikes across 200 cities globally. The data are used to predict demand, help integrate with public transport systems, and better distribute bikes within the city.

Mobike has recently partnered with the World Resources Institute to use data to generate insights into different cities’ mobility characteristics. These data have already revealed that Beijing has the earliest rush hour, starting from 6 am. Shenzhen has the most midnight bike traffic, and residents of Sydney cycle most during the weekend. The overall aim is to implement ‘Transit Oriented Development’, according to passengers’ habits and demand, thus improving urban living.

Materials for Mobikes

In terms of material usage, Mobike has been seeking to adopt a full life cycle perspective. This means sourcing from companies that have recycling capabilities, designing bikes to be modular, durable and repair-friendly, and maximising the lifetime of each bike component. For example, Mobikes have plastic non-inflatable tyres, which are said to be more durable than standard air inflated rubber; partnerships with municipalities to micro-manage bike parking; collection of broken bikes for repair, remanufacture or recycling; and GPS tracking on the bikes, making them easy to locate and collect, once damage has been reported.

So far, Mobike has collected and reutilised more than 100,000 damaged bikes and continues to explore more ways to reuse bike components.

However, there are also many challenges ahead. Piles of abandoned or damaged bikes have appeared in many cities, due to vandalism, ineffective management, lack of parking space in urban planning, and for other reasons. Such issues have inspired discussions among urban planners, municipal officials, bike-sharing service providers, and the general public, to come up with better regulations to manage shared bikes in the cities.

Future prospects

Mobike is attempting to steer urban mobility towards a greener path, by establishing a ‘no friction’ business model aimed at creating a triple win situation.

A win for consumers who can access affordable last mile transport using a frictionless payment system. A win for city authorities who can reduce traffic congestion, and ultimately a win for all citizens with improved air quality through greatly reduced vehicle numbers.

In global environmental terms - it has been estimated that if 500 cities were to have Mobike-like services, 30 to 60 million tonnes of carbon emissions could be avoided, saving USD 1.3 - 2.6 billion investment in carbon reduction measures.

Company info

  • HQ in Shanghai
  • Established April, 2016
  • Size:Manages more than seven millions bikes in 160 cities globally
  • April 2018 acquired by Chinese web company Meituan-Dianping for US$2.7 billion