It all started, well, out of the blue.
Several days ago, one of Beijing’s remaining shared-bike champions Bluegogo, now partially owned by Didi Chuxing, announced that the days of embarrassingly cheap 1 kuai per hour rides were over.
The company introduced a new pricing strategy meant to keep business afloat in a more mature and oversaturated industry. A ride on a slick blue bicycle through the hutongs of old Peking (or any other city where you can find one) will now cost you 1 kuai for the first 15 minutes followed by 0.5 kuai for every additional 15 minutes.
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Mobike followed suit, announcing identical changes, however, only to Beijing, sparing for now the rest of the country. In good news though, the pricing for monthly passes seems to have remained unaltered even in the capital.
The youngest but no less potent Alibaba-backed Hello Bike didn’t shilly-shally for long making their new pricing strategy public this week. And it’s just a copy-paste of what the other industry heavyweights did earlier (also only relevant for Beijing).
Mobike is notifying users of the rate changes with pop-ups and notifications. As you can read in point 3, for monthly passes the first two hours of use remain free, with 0.50 kuai charged for any additional 15 minutes. [Images via Mobike]
The change in prices is not particularly dire, since the bikes are mainly used just to solve the “last-mile” problem for commuters whose home or office is too far from the subway, but not far enough to commit to an airless bus ride. And let’s be realistic, how much time does an average person need to cross a mile on a bike? Around six lazy minutes according to our calculations.
Yet the introduced measures may be indicative of the state of the industry as a whole. Bike sharing, which has been booming and accumulating capital like a huge money sweeper just two years ago has now reached a point of stalemate. The market is oversaturated, investors are withdrawing funds as in the case of Hello Bike that reportedly lost 15 of its early patrons last week, and some companies, like Ofo, that started the bike-sharing craze back in 2015 with their iconic yellow two-wheelers, are now rumored to be on the verge of bankruptcy.
According to a piece published by the Wharton School of Finance back in 2017, the average bike on the streets of Beijing was making roughly seven rides a day and thus earning RMB7, which covered its manufacturing costs in just 30 days.
But that was way before Chinese streets were flooded by infinite numbers of unused bicycles of numerous brands (at one point even the Bianlifeng convenience stores had their own bikes), before bike dumps the size of several football fields and before people started losing enthusiasm towards the whole bike-sharing idyll. Not to mention that merely paying off manufacturing costs is not enough to keep a company profitable. Let’s just hope that companies will be able to get by on the extra cash that comes with increased ride tariffs.
True, too many bikes might not be a blessing, but no bikes at all is just an unacceptable step backwards at this point. How else are we supposed to get to 798 from Wangjing South after all? Walk there?
[Cover image via Pixabay]