Bike Share in China

As a competitive cyclist myself, I am always interested in bicycle news from at home or abroad, so this piece on bike share in China caught my eye. When I was in Shanghai last November, I saw a great number of these bikes around the city and marveled at their novel design as well as their overwhelming popularity. So popular in fact that they’ve become somewhat of a nuisance around town.

Nonetheless, I think it is a strong effort to change the way people get around town. Cycling is good for your health, the environment, and your wallet, but it doesn’t come without it’s share of challenges, a lesson which I am sure is not unfamiliar to residents of San Francisco. City bike share has been in San Francisco for several years, but has yet to change the way that people move about this city. Our challenges are much different, but I thought this story would be of interest to my fellow cyclists and San Francisco city-dwellers.

The following article was originally published on 27 February 2017 in the Chinese language newspaper,  The Paper by Yang Tao, Yang Ming, Wei Dongyang, Nanjing Institute of City and Transportation Planning Co. Ltd.

Will the reflection of the moral fiber of the nation’s people in the magic mirror of bike share be the key promoter of the bicycle revival?

The Driving Force Behind Bike Share Development

With the help of the internet and the sharing economy, the appearance and revival of bike share is slowly becoming the key promoter of the resugence of bicycling.

There are presently several tens of cities which have begun developing “Walking and Bicycling Transportation Systems” pilot projects, among which Hangzhou is one of the earliest trial locations to begin development of their bike share program. In march of 2008, Hangzhou proposed to study Paris, France under the direction of the government using an enterprise business model to take the lead in establishing a public bicycle trasportation system and to include that system into the municipal transportation system.

But real operations for public bikes are still experiencing many problems, such as a high cost of infrastructure and questionable system reliability; a complicated process for borrowing and returning bikes; difficulty of connecting the bike to the bike dock, docks are either completely full or completely empty at rush hour, making it difficult to borrow or return bikes and requiring human management; irrational planning of bike stations where it is difficult to open one inside housing developments, a prohibitive factor to realizing door to door tranportation. Investments are large, operations costs are high, and there it is difficult to break through the closed loop to push development forward. This has caused traditional public bike service stations to be unable to reach broader applications in the daily lives of city residents, leaving htem behind in the wake of mobile web development.

But in 2016, bike shares have begun developing rapidly, attracting the attention of investors. Cases of financing on the market began in early 2015 and haven’t stopped since. From September of 2016, capital moving into bike shares is increasing rapid and there are currently over 20 different bike share investment markets currently operating in China.

On January 5th 2017, Hangzhou Qibei Technology Co. Ltd. announced that they completed a billion yuan series A financing deal, which mean that in the short span of two days time, the bike share industry received investmests totaling over 15.8 billion yuan, carrying over the competition for financing from 2016. At the same time, all bike share enterprises just happened to be rushing to stake their claim on the majority of the market share. Iterations of bike share products continue. The rapid expantion of the industry, combined with fast product upgrades along with these moves which are full of internet style, have become the unofficial operation strategy of bike share enterprises.

It is not hard to imagine the reason that bike share has been a hot puirsuit for investors. Speaking from a government perspective, congested city transportation and environmental polution have brought major headaches to city management. Following the increase of private vehicles, congested city transportation and environmental polution have become the normal state of affairs and the mandated road space rationing measures are no longer able to solve the roots of the traffic congestions and environmental polution problems. Government is even more will to see that Mobike, Ofo, and other interet enterprises present a significant ability to make improvements. For this reason, similare internet technology companies necessarily obtained the support and assistance from the government.

From an economics standpoint, bike share bikes without a parking spot could potentially realize “door-to-door transportation,” with the ability to park temporarily, borrow a bike at your immediate location, quickly borrow and return bikes, all without the need to sign up for a card, making this much more attractive than traditional dock-based public bike share programs.

If the cost of infrastructure losses, the cost of capital loses, the cost of time, the social cost, and the mental and physcal cost were all calculated into the cost of city traffic, then the choice by working class to use bike share would save them at least 75% of the cost of traffice when compared to a private car.

Bicycles are not only a necessity for transportation, it is also a way to exercise. Gyms and other facilities for physical exercise in major cities often have a high cost caused by a shortage of availability. Riding bike share bikes as a form of exercise is a really great leisure activity to enjoy during free time.

Smartphone technologies are flourishing, bringing the online to offline, changing peoples’ lives for the better and improving the user experience. For this reason, we know that the appearance of bike share will reconfigure city transportation.

Unavoidable Problems

Bike share programs have been pursued by investors but have also run into all kinds of problems. Currently, the industry is burning cash and hasn’t realized a clear business model. After a huge influx of cash, the industry is bound to be eager for returns, creating huge pressure for platform operators. The positioning of each bicycle is converging and there are a million differences between each experience, so you can imagine the intensity of market competition. Additionally, even though bicycling is healthful and a low-carbon emissions activity, but after all, the users of municipal transportation as it is today will be tested by the huge number of bike share bikes flooding city streets, presenting challenges to the flow and order of traffic.

In regards to capital, many companies have already received funds from investors. Each company charged by the hour, with each hour costing in the range of 0.5元 to 2元 RMB. But as for the cost of depreciation and settling capital, this revenue seems clearly insufficient. Increase in earnings from a single ride is limited and the market is still unstandardized, so after a short time, platform operators will be unable to circumvent the problems of bike depreciation and bottlenecking profits.

Operation requires that userse are able to find a bike at any time, which means that bikes must be equiped with a positioning system in the backend, facilitating data mining. But a complicated transportation environment, as well as road and weather conditions are all major reasons for a poor user experience. The tidal phenomenon is obvious in relatively cut-off areas and before bikes become the main stream, users may experience a shortage of bikes.

Additionally, there is also the question of the standardization of parking. As bike-share bikes from multiple companies are in use at the same time, it makes the roadway a competitive place and when bikes park in the roadways, violate regulations, or are disorderly, this will certainly create a difficult problem of management for the city.

With regards to the product, bike-share bike are first and foremost a test of the moral fiber of the ridership. As soon as people leave the the fixed-location bike station, unified parking and management relies on the awareness of individuals, which sharply increases the risks to ethics. The cost of supervision is actually higher when broken down one-by-one. The cost of bicycles is increased by bad behavior, such as bike theft, purposeful damage to bikes, peeling off the QR codes, hacking of passwords, stickering with advertisements, and illegally parking bikes. The use of public bikes as private bikes, such as locking a public bike with a personal lock, taking bikes into gated neighborhoods, or taking a bike inside a private home, can only be combated by relying on reporting by users.

Strategy for Future Development

The bike share transportation model has developed rapidly in the context of the internet, its rapidly evolving nature causes existing laws to be unable to keep up and the problems experienced by bike share are also present in other transportation-share models. The appearance of bike share is more than just the product of transportation culture and the sharing economy, it is a consideration of the human nature of the nation’s citizens. During this critical time, when every bike-share enterprise is fighting for market share and working towards gaining a foothold in big cities, government, businesses, and passengers should all depart from their own perspective to guarantee a space for survival and sustainable development for this bicycle revival to take shape.

One: Top level design, perfect related laws and legal protections

Establish an access mechanism for the bike-share market and define basic standards and safety requirements for bicycle production to prevent potential transportation hazards. This includes regular bike maintenance, stipulated scrapping of bikes after a certain number of years, and especially the provision of technical solutions for constraining the borrow, return, and parking of bicycles.

The government should draft a plan for public bicycle parking locations, define implementation standards and regulations for public bike parking locations, establish public bike parking management provisions, and standardize codes for bike parking.

Bike parking violations should be entered into the personal credit system, as should random parking, traffic misconduct, or wantonly acting out of personal convenience, or at least should influence credit parameters on the bike share platform. Increase fines and enforcement against bike theft or bike-theft supply chains.

Two: Integrate a multi-level web and encourage and promote a mode of transportation which combines bikes with public transportation

Aim towards establishing an integrated network of green transportation, optimize the overall transportation network, which includes public transportation, bicycling, and walking, strengthen the transportation system infrastructure for walking and bicycling, and guarantee the safety consistency, and comfortability of walking and bicycling.

Take into account bicycle transportation in the design of public transportation hubs (underground trains, lightrail stations, or public transportation stations) to accommodate transferring to a bicycle from different transportation methods. Within 3 kilometers of transit stations, improve bike lanes and reasonably configure parking lots non-motor vehicles.

Focus on the convergence of public transportation, provide public transport service coverage, present measures for the planning, management, and review of the public bike system, and build thorough and fully equipped public bike scheduling system and a fully-functional integrated public bike service center.

Three: Optimize the quality of the environment, establish and perfect the bike lane system

Promote bike share’s’ participation in the infrastructure of optimized bike lanes and bike-only roads with help from the strong funding going into bike share

Increase law enforcement against illegal parking on the sidewalk or in the bike lane, focus on strengthening cleaning and correcting vehicles parked on the sidewalk or in the roadway, ensure that the sidewalk and bike lane are sufficiently wide and safe for use. Optimize infrastructure for “wind and rain corridors,” green landscaping, and recreational facilities and make walking and bicycling in cities more comfortable.

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