In Focus
TRANSPORT & LOGISTICS | Staff Reporter, Singapore

Bike-sharing firms gear up as operations are hounded by parking problems

Amidst complaints, ofo and Mobike will add a geotagging feature this year.

It was in 2014 when Land Transport Authority (LTA) first saw the opportunity to set up a public bicycle-sharing in Singapore, taking inspiration from cities like Paris, London, New York, and Taipei. Last year, the transport authority finally announced a tender for a 1,000 bike-system to be launched in Jurong Lake District.

Whilst the tender received 13 bids from both local and foreign players proposing both docked and dockless systems, other privately-funded startups have already started rolling out the same service to Singaporeans.

Left with no choice, the LTA decided to scrap their plans and to support the startups.

Whilst the trend has already been booming in other markets such as in China, it was only this year when three major bike-sharing platforms decided to commence their operations in Singapore, in support of the government's push for a car-lite society.

Beijing-based ofo and Mobike, as well as the homegrown oBike, are the biggest firms to offer stationless bike-sharing models in Singapore.

Combining the tech seen in many sharing economy models such as Grab and Uber, these firms have launched their own mobile apps that can locate available bikes within a distance.

Funding the bikes

Looking at the funding these startups have amassed over the past periods, the bike-sharing trend seems to be of interest to investors.

For one, ofo managed to raise the largest investment in an app-based bike-sharing firm, recording more than US$700m in its latest Series E funding round led by Alibaba, Hony Capital, and CITIC Private Equity in July. Prior to this, ofo amassed at least US$650m in funding and has already obtained an estimated valuation of about US$2b.

"We are very fortunate to be part of the global sharing economy and investors have exhibited a lot of confidence in our business model," ofo said.

This funding feat trumped Mobike's US$600m Series E funding which closed a month prior. Mobike's investors include Singapore-owned Temasek, Warburg Pincus, Tencent, and Sequoia.

"We have a sustainable business model, and strong support from investors who believe in the positive change our smart bike-share platform can bring to the cities we operate in," Mobike said.

ofo and Mobike have over 100 million users each globally, with the latter recording 25 million rides daily in 160 cities.

On oBike's end, it has attracted Grishin Robotics and has secured US$45m Series B round of funding in August. Since March, it achieved 500,000 signups.

Operations hounded by problems

Since these firms utilise dockless systems, their business models requires less investments as they do not have to build several stations. Ofo said bulk of the costs they incur fall on manpower, as with businesses that are operations and logistics heavy.

In order to augment and efficiently manage manpower costs, ofo said it has segmented their operations into districts based on population density and it has deployed on-the- ground operations crew in each district to locate indiscriminately-parked bikes and to deploy at their popular zones.

"This has found to be very effective in training a crew that is familiar with their assigned district in terms of the distinctive layout and overall user behaviour," ofo said.

For oBike, the use the latest Bluetooth technology which helps track the location of their bikes accurately, reducing the time the maintenance team spend in finding and redeploying bikes

These efforts were also part of their wider solution for one recurring problem they face: errant riders.

In the month of July, LTA's Active Mobility Enforcement Officers impounded 70 dockless bicycles that were parked indiscriminately.

Year-to-date, the total number of dockless bicycles impounded this year have already reached 278. LTA said 212 two-wheelers were from obike, 65 were from Mobike, and one from ofo.

"LTA will continue to work with dockless bicycle sharing operators, Town Councils and other stakeholders to encourage a responsible bicycle-sharing culture in Singapore," the transport authority said in a Facebook post.

To counter and discipline errant drivers, the three firms introduced their own credit systems. Mobike was the first to launch such system in which users start with 100 credit points.

Depending on behaviours, users will gain and lose points. Once the credit score falls below 80, the user will be charged $100 per 30 mins. Ofo and obike have the same mechanism. Behaviours such as violations of traffic rules, adding a private lock, and losing a bike bring the credit score to zero and therefore suspending the user permanently from availing the service.

However, this has not stopped the problem as complaints continued to flood in. Complaints included bike abuse as the shared vehicles were thrown off from upper floors of HDB blocks.

The LTA welcomed the use of geotagging which will enable the firms to know if their bikes were left in designated zones.

New entrants SGBikes and GBikes have already implemented geotagging, and the three other firms must follow by the end of the year as stated by a signed agreement with the LTA. Mobike said the feature should be in place next month, whilst ofo is looking to add it by the end of the year.

Bike-sharing’s future

Whilst a 2012 survey by the LTA revealed that only 1.5% of people in Singapore use bikes as part of their daily commute, these bike firms believe that this could triple over the next decade.

"Thus, in line with the government’s vision to build a “car-lite” nation with reduced traffic congestion, we aim to make cycling a real alternative for first and last mile transport option, and to create a more active and greener Singapore," ofo said.

Ofo added that they are working closely to set-up more designated parking areas, which users can now locate with the app. This includes establishing over 100 preferred parking zones within public housing estates and releasing more than 10,000 bicycles across 28 different HDB estates by end of 2017.

"In Singapore, we are partnering with JTC Corporation to bring in a new fleet to One-North and Tuas by the end of the year to cater to the working crowd, in addition to our deployment in various HDB estates," ofo said.

For Mobike, it stated that it is actively developing its artificial intelligence platform.

"This platform can integrate and analyze hundreds of variables including weather, time of day, location, crowd patterns, and supply and demand trends, to provide highly accurate predictive models that can be used to enhance operating efficiency," Mobike said.

On that end, the firm wants to tap and work closely with local communities and city planners to contribute in the smart nation efforts.

These bike sharing firms are a part of the bigger sharing economy model that is taking off globally. PwC said this model has all it takes to grow from US$15 billion to US$335 billion by 2025. It is up to these firms how they can pedal their way to be as popular as their cousins in the model, Uber and Grab.

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