Bike Sharing in China: Huge Numbers Abandoned

Chinese streets clogged with bicycles

​There are estimated to be at least a billion bicycles in the world.

Every year manufacturers add another 100 million to the total.

China ​makes more than ​50% of those new bikes - but right now it is finding that a ​​huge bike sector can be something of a mixed blessing.

​The problem is ​the country's bike-sharing boom, which  is providing a chilling demonstration of what happens when you have a toxic mix of hyper corporate greed and ​competition, rampant speculation and a creaking city infrastructure that is not ready for the ​large numbers of new bikes on the streets.

Bike docking station

Image: China Uncensored

Bike docking station

​While bike-sharing is not new, in the United States and most other countries shared bikes need docking stations - fixed points ​at which you pick up or leave your bike.

And if those docking stations are not at convenient points, the bikes are simply not used - which is not good news for the companies providing those shared bikes.

The Chinese bike-sharing boom started when a gentleman named Dai Wei realized he could ​put  a digital lock and a mobile phone app on a bike and do away with the need for a docking station.

​Pick Up - And Dump!

​​Users could simply pick up the nearest bike, unlock it via the phone, and then dump it wherever they liked once they finished their journey.

​Mr. Dai found a company called Ofo, launched his product - and the race was on.

​Ofo and another large player, Mobike, dominate the market, with some 120 milion registered users and 13 million bikes on the streets.

​​And that is the problem - the bikes are on the streets.

And on the pavements, the parking lots and any available ​empty fields (which are empty no longer).

The authorities initially failed completely to regulate the industry.   There was no restriction on the number of competitors in any one area, or the number of bikes they could put on the streets.

For example, Shanghai ​found it had 1.3 million shared bikes - one for every 16 people.

It has now banned the operators from putting any more machines on the streets.

​Impounded Bicycles

Impounded bikes

Image: China Uncensored

Cities are impounding machines by the tens of thousands, resulting in huge heaps of abandoned bicycles, many of them broken.

Many are ending up as scrap metal - sometimes legally, sometimes not, as the criminal element goes after the income from recycled aluminium.

The problem of recycling is likely to get worse.   Ofo and Mobike estimate that next year about 10 million bikes will need to be recycled to make way for newer models hitting the market.

​China Bike Shared Graveyard

Ofo, which had a market capitalization of $2 billion, is itself in deep financial trouble.

Mr. Dai is now on a blacklist of credit defaulters; according to the Government, the parent company owes nearly $8m. on various contract disputes.

Users, worried about the company's ability to survive, ​began demanding their deposits back - the queue for refunds reportedly exceeded 12 million people.

At one time there were some 500 bike-sharing companies in operation - and a huge over-supply of product.   At least 60 of those operators have gone out of business.

One of them, named ​Xiaoming, left more than 400 000 bikes on the streets, and also failed to return some $115m. in user deposits.

​Bike sharing in China is still very popular, and will probably continue to grow - just not at the same breakneck pace, and almost certainly subject to many more controls and regulations.

Abandoned bicycles

Image: China Uncensored