Discuss: What does Bluegogo’s crisis say about the future of bike-sharing?

Photo credit: Bluegogo.

Discuss features short but strong and insightful opinions on interesting startup, entrepreneurship, and tech topics. Got a topic or question to suggest? Drop us an email.

Chinese bike-sharing company Bluegogo was founded in 2016 and expanded fast, acquiring 15 million users and a US$140 million valuation in less than a year. But it made headlines last week due to reports of its missing-in-action CEO, delayed salaries, and angry customers.

In his apologetic open letter, Bluegogo CEO Li Gang said, “From the very start of Bluegogo, we have always been on thin ice in the face of two well-funded players. Without support from a wide range of investors and good financial planning capabilities, even the best bike product is powerless.”

What does this incident say about the future of bike-sharing? To start off the conversation, we asked three people from the Tech in Asia community for their thoughts.

Editor’s note: Answers were edited for clarity.

Thomas Luk, management consultant

Bluegogo’s situation is a systemic problem that will lead to many startups collapsing in the near future. Most startups today fail to find their innovative, unique value. The bike-sharing model is based on simple math, rather unattractive on its own, and does not justify the valuations of any of the current contestants.

Market leaders need to raise enough funds and be disciplined in finding their unique value proposition. But failure to move beyond the simple bike-sharing business model will be fatal—even to some well-funded startups that lack management capabilities.

I don’t expect many mergers in the bike-sharing industry, but rather the collapse of many upstarts.

Let’s discuss: