Opinion: Why bike-sharing in China is not sustainable

Photo credit: Silent Hill / Imagine China.

The bike-sharing industry is centered around sustainability, with bikes being one of the most recognized eco-friendly means of transportation. It has seen immense amounts of funding just this year:

• Tencent led a US$215 million series D funding round for Mobike
• Bluegogo raised US$58 million in a funding round led by Black Hole Capital
• Didi Chuxing and DST Global led US$450 million series D funding for Beijing-based Ofo
• Ofo raised US$700 million from series E funding round led by Alibaba

But is the Chinese bike-sharing business model truly sustainable?

The short-term answer to this question is currently a resounding no. It is simply because the majority of companies within this ecosystem are still in their infancy, with scalability occurring fast, leaving immense rooms for organizations to play catch-up.

But companies and Chinese policymakers can shape the future of the growing bike-sharing industry. They should address at least three of the most important issues: bike storage, maintenance, and criminal activity or misuse.

Bike storage

Bike storage and parking have become an intense issue. Many companies in the bike-sharing ecosystem use consumer-friendly, dockless bike storage system, which allows users to leave their bikes at designated parking spots after use. While sound in theory, this has resulted in an overcrowding of public spaces, specifically in areas centered around public transportation such as sidewalks, metro stations, and bus stops.

This is a primary reason why bike-sharing in China is currently not sustainable. Local municipalities have addressed this situation by dumping the bikes in landfills. Photos of fields filled with colored bikes depict a questionable picture of the industry and went viral earlier this year.

To change this, local policymakers must work with bike-sharing companies in designating specific areas to dock bikes and organizing these areas to prevent overcrowding. They can cooperate with the national legislation so they can have the necessary jurisdiction and funding.

Another action that can address the issue is reducing the number of bikes being manufactured specifically for bike-sharing. Local municipalities can analyze and mandate an appropriate number of bikes needed to ensure market sustainability.

Bike maintenance

Bike maintenance is a large point of contention in terms of sustainability. Because of China’s background as a manufacturing powerhouse, bikes that can sustain a heavy amount of users are relatively inexpensive to manufacture. This can result in companies simply producing more bikes to address simple maintenance issues. Apparently, it would cost companies more to fix a bike than to simply throw it away and replace it with a new product. This goes against bike-sharing’s sustainability and immensely contributes to human capital waste.

Chinese policymakers must work together with the members of the bike-sharing industry to tackle the manufacture of new bikes as a solution to address bike maintenance issues. While the Chinese government has enacted national legislation, which addresses some points of bike maintenance, local municipalities are not necessarily enforcing those standards.

One reason is due to an overwhelmed police ticketing section, which could be subject to confusing and often-changing guidance. One proposed solution would be streamlining requirements for bike maintenance in cities, backed by some sort of national funding. There can also be tax incentives for the amount of bikes retained over a certain period. A government program may also allow for low-cost or free repairs of bikes.

Countering criminal activity

Bike vandalism and theft have also become a recurrent issue. Vandals have often targeted the bikes, placing them on trees or even destroying them by setting them on fire. The issue of bike theft is self-explanatory, and it poses huge issues to the bike-sharing community in terms of safety, liability, insurance premiums, lawsuits determining fault, and court proceedings.

Conclusion