/ Investigation Public bicycles in Shenzhen, China. © Chris CC BY-SA 2.0

Bike-sharing (1/3): Is it time to back-pedal?

Published 3 April 2018 by

For more than a decade, city bike-sharing was public policy and an open market for sustainable mobility. The “free-floating” trend of dockless public bikes challenged the model. Part one of our investigation.

Should we throw away the baby (collaborative economy) with the bathwater (collaborative consumption)? In 2010, we discovered the joys of the sharing economy through (among others) the book What’s Mine is Yours, where the sharing economy and the pooling of goods, spaces and knowledge emphasized the value of using rather than owning. The subtitle, however, heralded disillusions to come: we have since seen “The Rise of Collaborative Consumption” pushed to the edge with the powerful rise of Airbnb and other Ubers. We might have thought that bike-sharing, buoyed by public power, would be above reckless “uberization”. But over the past few months, the perverse effects of the collaborative economy have whipped the industry hard.

Makery investigated: before considering community and electric alternatives (stay tuned), part one of our series examines the current state of bike-sharing, for better and for worse—and possibly one of the most unfortunate ecological calamities of this new economy!

Invasion of the butterfly bikes

First in the line of fire: free-floating public bicycles, also called dockless bikes or “butterfly bikes” in France. This system of bike-sharing is the foundation for the business model of Chinese start-ups, including the current global leader and commercial pioneer Ofo, launched in 2014, whose bright yellow emissaries are popping up around the world. The bikes are geolocated, unlocked via QR code and can be left anywhere. As a result, they tend to agglomerate out of control in public spaces, when they don’t end up abandoned in piles of metal. In China, fingers have pointed at the bursting financial bubble and chaos, as witnessed in monstrous bicycle graveyards.

Orange, green, yellow, you can’t miss them. Here, a public Ofo bike on the banks of the Seine river in Paris. © Nicolas Barrial

Docked vs. dockless

The paradox is that Gobee.bike, Ofo, oBike and Mobike, the Chinese start-ups in question, were inspired by the Vélib’ bike-sharing system launched in Paris in 2007 or Boris Bikes, affectionately named after then-mayor of London Boris Johnson, who inaugurated them in 2010. But while the European models were based on docking stations that required heavy public investment and costly logistics to redistribute the fleet, the Chinese companies opted for free-floating bikes and a 100% private business model.

Taking advantage of available surface area and the vast number of potential users in their local market, the Chinese start-ups exported the commercial dockless model to the rest of the world. In Beijing alone, eight companies share the market, some sponsored by giants such as Foxconn and Tencent for Mobike, the newcomer to Paris and main rival of Ofo. Launched in 2016, Mobike and its 10 million bikes claim a presence in 200 cities in 12 countries, including Florence, London, Bangkok, Washington, Cyberjaya (Malaysia), Rotterdam, Sydney, Berlin and Paris since January 2018. Ofo, which claims to have 200 million users in China, is present in 20 countries. The butterfly bike war has begun.

Disposable bikes?

The force of their strike is certainly cause for concern, as free-floating bikes have had their share of bad rap. Hastily discarded, the bikes often clutter public spaces, and even if a user can see the previous user’s identity in the app, the bikes themselves are often vandalized, if not reappropriated (i.e. stolen).

These floating fleets also pose safety problems for users. In Seattle, the city sent out a warning to all bike-share users to be sure to test their brakes, following several reports about brake cables being cut. The North American bike-sharing market is currently dominated by U.S. start-ups Limebike and Spin.

Hammering in the nails are the shocking photos of massive public bicycle graveyards in China. One of the reasons for the junky pile-up is that Chinese companies are more often inclined to replace than repair. In 2017, after the death of a child riding an Ofo bike in Shanghai (when Chinese law prohibits children under age 12 from cycling in the street), Ofo promised to change the poor-quality combination locks… by introducing an all-new fleet within just a few months, leaving it up to the city to round up the suddenly obsolete bikes off the streets.

Is the beloved bicycle, symbol of ecology and well-being, now becoming a disposable consumer item and potential waste material? It may not yet be the case in France, but public bikes are still high-profile victims of local vandalism. Gobee.bike, which counted some 2,000 bikes in service in Paris and nearly 150,000 users in France, announced its retirement from the French market on February 24, 2018, only a few months after it arrived. It wasn’t the first time French society had experienced this type of outrageous vandalism, as one of the reasons each Vélib’ bike cost Parisian taxpayers between €2,000 and €4,000 ($2,400-$4,900) each year. Gobee.bike had even equipped its vehicles with an alarm, but the free-floating model, based on a drastic reduction in costs compared to docked systems, made it particularly sensitive to any distress of its fleet.

Exit Gobee.bike, as some took the idea of free-floating bikes literally:

Vélib’2 off to a wobbly start

Gobee.bike’s retreat is but one episode in the bike-sharing battle. In Paris, the time is ripe to attract more users. The new Vélib’ system inaugurated by mayor Anne Hidalgo, already encountered a few bumps before launch. The ambitious program touts lighter bikes, of which 30% will be pedal-assist electric bikes, so that Vélib’2 can become truly metropolitan (1,400 stations in 32 localities). But the fleet changed hands on May 5, 2017, when historical operator JCDecaux was replaced by Smovengo, a consortium led by Smoove, a Montpellier-based start-up with 38 employees! The tender offer also brought new troubles.

Some Vélib’ stations are closed for a (postponed) renovation. © Nicolas Barrial

Existing stations were removed at JCDecaux’s cost. Smovengo accused the company of dragging its feet, which the former operator contests. According to the agreement signed with Autolib’ Vélib’ Metropole, 600 new stations were to be installed by Smovengo by late February 2018, but only 300 are currently functional. Hidalgo announced that she would take matters into her own hands by having city services manage the installation, at least in Paris.

Where Vélib’ is missing, Chinese bicycles are appearing. © Nicolas Barrial

Keeping the peace through the cost of a ride

Smovengo stations introduce significant innovations: “unbreakable” locks and “overflow”, or the possibility of interlocking the bikes when the stations are full, which should help reduce vandalism and the number of bikes that need to be redistributed by truck. Eventually, a fleet of 20,000 Vélib’2 are scheduled for public service. But innovation has a price. The Vélib’ membership fee has increased from €29 ($35) to €37.20 ($45) for standard bikes (unlimited 30-minute rides).

Dockless bikes, on the other hand, offer an average of 20-minute rides for 50 cents. For anyone who rides less than 70 times a year, it’s a no-brainer. However, riding Vélib’ in Paris means sparing the planet a little less CO2, as the new models are made in the region of Nantes.

An official regulation from the municipality could signal the next rise in dockless bikes. In September 2017, the city of Paris hosted a meeting for local bike-sharing operators. The statement issued after the meeting mentioned a future “fee for commercial occupation of public space”. This fee could be fatal to certain operators of free-floating fleets, who must already face the worst vandals and thieves of shared bikes in the world—otherwise known as the French—according to a 2011 study by the United Nations.

Dizzying investments

Hardly a badge of honor… unless this French “culture” preserves the nation from the global calamity that is bike-obsessed venture capital. Investment in dockless bike-sharing rose from €235 million ($290 million) in 2016 to €2.1 billion ($2.6 billion) in 2017, of which €800 million ($1 billion) for Ofo alone, sponsored by smartphone manufacturer Xiaomi and Didi, the Chinese Uber.

But the Chinese start-ups present in France are likely to take the necessary measures in terms of managing and securing distressed bikes. In fact, they have already expressed their intention to work with public authorities in the best interest of all users. Once the backlash to the free-floating invasion wears off, hopefully people will see the bigger picture of bicycles as a clean and sustainable means of urban transport.

Next, our investigation continues with inclusive and community alternatives to public bike-sharing.

Makery newsletter

Biweekly, all the labs news you need to know.