Sharing Bike Oversupply in China

A worker rides a shared bicycle past piled-up shared bikes at a vacant lot in Xiamen, Fujian province, China December 13, 2017. Picture taken December 13, 2017. REUTERS/Stringer ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY. CHINA OUT. TPX IMAGES OF THE DAY - RC16B19B1FA0

2017, bike sharing took off in China, with dozens of bike-share companies quickly flooding city streets with millions of brightly colored rental bicycles.

However, the rapid growth vastly outpaced immediate demand and overwhelmed Chinese cities, where infrastructure and regulations were not prepared to handle a sudden flood of millions of shared bicycles. Riders would park bikes anywhere, or just abandon them, resulting in bicycles piling up and blocking already-crowded streets and pathways.

As cities impounded derelict bikes by the thousands, they moved quickly to cap growth and regulate the industry. Vast piles of impounded, abandoned, and broken bicycles have become a familiar sight in many big cities.

As some of the companies who jumped in too big and too early have begun to fold, their huge surplus of bicycles can be found collecting dust in vast vacant lots. Bike sharing remains very popular in China, and will likely continue to grow, just probably at a more sustainable rate. Meanwhile, we are left with these images of speculation gone wild—the piles of debris left behind after the bubble bursts.

The fields were the remains of a countrywide boom-to-bust bike share scheme. The scheme had captured the world’s imagination for its innovative use of technology involving a smart digital lock and GPS. The digital lock innovation was a game changer for China, which was once known as the “kingdom of bicycles”, before the rapid growth of its automobile industry.

The bike share schemes presented a cost-effective alternative solution to traveling in cars, easing traffic congestion in the process. Ofo, one of the country’s most well-known bike share companies, had wanted to present a technology-driven transport solution that could serve the needs of people who wanted to travel short distances. They had aimed to match up the existing number of bikes in service with the number of people who needed them. The scheme was a hit with investors seeking green transport solutions for China. Ofo was not the only one to gain interest – its competitors such as Mobike and Bluegogo also garnered substantial interest from venture capitalists and investors.

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But while these firms started off with healthy balance sheets, there was no regulatory framework under which these bikes might be gradually introduced and integrated into China’s existing public transport system. A sudden influx of what amounted to millions of bikes inundated China’s urban centres. The lack of regulation also allowed copycat bike share companies to spring up unchecked, so that at one point, there were more than 40 dockless bike share companies operating around the country, leading to an oversupply of shared bicycles.

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