Time to regulate China’s booming bike share sector 

As China’s sharing economy took off in 2016, shared bicycle schemes powered by internet connectivity and smartphone apps spread from university campuses to cover entire cities.

Almost overnight, millions of company bikes in red, yellow and blue spread across China’s city streets and into their back alleys. These bikes rapidly overtook other forms of transport for people making short journeys.

The traditional model of bike sharing requires bikes to be returned to fixed docking stations. But the new market entrants wanted to do away with docking and service points in favour of GPS positioning and mobile payments.

Using your phone, you can see the nearest bike on a map and once you’ve located it, you scan a barcode on the frame to unlock it and pay. When you’re done, you leave it where you want. This approach is much more flexible and convenient, allowing you to get closer to your location. An ITDP survey of 10,000 people in Tianjin found that 93% of users said shared bikes would become an essential part of public transport.

Statistics from Cheetah Global Lab, an internet research company, show that as of April 2017 there were 45 firms running bike-share schemes in China, with 7.2 million bikes on the streets. Data from China’s two largest bike-share companies shows that Mobike has over three million bikes in 50 cities, which are used up to 20 million times a day, with a total of 600 million journeys made so far. Competitor Ofo also has over three million bikes in use, but across 70 cities.

This explosive growth has been fuelled by a previously unmet demand for cheap and convenient transportation over short distances, as well as a need to improve the structure of urban transport and reduce air pollution.

A report by online mapping provider Gaode into urban transport in China during the first quarter of 2017 indicated that the arrival of bike-share schemes in Beijing and Shanghai was associated with a clear drop in the number of car journeys of less than five kilometres. This would also suggest a reduction in pollution and energy consumption.

But the rocketing number of bikes has presented cities with a new set of challenges. There’s a lack of infrastructure to accommodate the increasing number of bike journeys, and rules for managing bike-share schemes are inadequate or absent.

Governments across China are starting to guide development of the sector, with nine cities having issued policies on shared bikes so far. However, local governments are just starting to explore the issues involved, rather than actually solve them.

Self-regulation by the market alone will not fix the problems faced by this new sector. There’s an urgent need for a systematic framework of management policies and service norms.

The bike-share schemes popular in China today are operated by the market but rely on public infrastructure. The services provided are of public benefit, and the market does have inherent quality and efficiency advantages when it comes to providing public services. But there are undeniable problems with a purely market-based approach.

Companies provide services for the sake of profit and are rarely motivated to spend money to provide public services. The most obvious problem with the schemes is the inconsiderate parking of thousands of bikes. There should be policies or rules in place that define the responsibilities of companies, the government and users; whereby companies supply and rent bikes, the government provides standards and guidance, complementary infrastructure and policy safeguards, while people make use of the service.

With this in mind, here are four areas where action is needed now:

1. Providing bike infrastructure

The rise of bike-share schemes has highlighted the failure of Chinese cities to give bicycles their rightful place in urban transportation and exposed a lack of cycling infrastructure. Such infrastructure is essential if cycling is to become a safe, convenient and a practical mode of transport.

Cycling infrastructure needs to meet demand. It should include the provision of bike racks near public transport stops and commercial, business and residential centres. This will make life easier for cyclists and reduce the number of bikes parked without consideration for others. Bike lanes are also essential to allow for safe, pleasant and convenient travel.

2. Setting product standards

Shared bikes are used far more intensively than privately owned ones but current product standards are nowhere near adequate. Specific standards are needed to ensure rider safety.

3. More accessible payment methods

It is easy to overlook the “social justice” dimension to shared bikes. Most users of bikes from companies such as Mobike and Ofo are young. In part, this is because the ability to make use of a smartphone and app to find, rent and pay for a bike is essential. But this is a barrier to use for older customers. Conventional bike rental schemes offer a range of payment methods and so are used by a wider range of age groups. To ensure fair access to public transportation, other payment options should be offered so more urban residents can make use of shared bikes.

4. Data-led management

Bike-share schemes have succeeded thanks to modern information technology. But such technology can also be used to reduce the problem of badly parked bikes. For example, shared bikes should have GPS trackers that allow for geo-fencing to determine whether the bike has been left in a permitted location.

If bike-share companies shared data across a single platform for analysis, city managers could also determine the optimum number of bikes needed, and use this data to work out where to place bike racks, and so on.

The development of shared bike schemes has met a public need for short-distance transportation. In the short term though the exponential growth, lack of relevant policy and infrastructure failings have inevitably created several problems. It’s now time for considered guidance to help this emerging industry contribute to the greening of China’s urban transport.