How did China fall in love with dockless bikeshare?

Commuters in Beijing, 2017. Image: Getty.

Visiting Guangzhou in South East China in the late 1970s, my grandmother was struck by the streets full of cyclists, peddling their aging bicycles down wide boulevards without any other traffic. China’s process of “reform and opening up” changed all that – at least for a time. Cycling was understood as a symbol of Maoist China; owning a car became an achievable symbol of affluence.

Today, though, the bikes are coming back to China’s streets. Chinese bicycle sharing companies Mobike and Ofo rank among the country’s most successful start-ups, and have rolled out millions of bicycles to China’s cities. Mobike claims there are 2m rides per day on its platform in Guangzhou alone. There is, as one Uber executive  described the experience users of the car sharing service should have when they used it for the first time, a “feeling of plenty” whenever you open the apps.

Even in the outer district of Beijing where I live, as far from the centre of town as Bromley is to Trafalgar Square, the bicycles are unavoidable. Taking a five minute walk to the shops today (anything more and I’d cycle) I counted almost 100 dockless bicycles.

They are quite unlike the bicycles my grandmother remembers. These are smart bikes, with about 300 patents involved in their production. They are unlocked and paid for in seconds with a scan of the bicycle’s QR code.

Mobike says it operates one of the largest Internet of Things networks in the world and is integrated into WeChat, China’s equivalent of WhatsApp. Both companies nudge their customers into using bicycles responsibly. Users receive points for parking inside a geo-fenced area, which are agreed with local authorities. and are lose them for parking in inappropriate spaces or damaging a bicycle.

This is changing urban transport in China – not just in Beijing and Guangzhou but also in the “tier two and three” cities that are unknown in the West but which drive much of the country’s growth. By helping people to connect quickly to subway or bus services, bicycle sharing companies are enabling a modal shift towards sustainable transport. The huge amounts of data the companies are collecting also helps city planners to adjust local transport routes to reflect passenger flows.

The growing uptake in cycling also has public health benefits in a country which is experiencing a growing obesity epidemic, but where exercise for exercise’s sake is often perceived as a distraction from professional or academic success. Unlike more expensive and geographically limited cycle schemes such as London’s Santander Cycles, these benefits do not appear to be disproportionately helping affluent young men.

This has all happened incredibly quickly. Ofo started as a project of students in the Peking University cycling club, and two years ago neither company had a bicycle on a public road. Now they are both worth billions of pounds, and are among the most high profile unicorns in China. According to a government think tank, as many one-in-10 Chinese adults have used a dockless bicycle.  

Mobike and ofo have many of the competitive advantages of Chinese technology. First, the companies have access to significant capital from the biggest players in Chinese technology. Alibaba is the biggest investor in Ofo, and on 4 April Tencent-backed Meituan-Dianping (a food delivery giant) purchased Mobike.


The access to cash allows the companies to scale quickly without having to worry about turning an immediate profit. This scale is the key to attracting a large numbers of users in a city – with the ubiquity of the products reducing the need to spend on marketing.

Second, due to Chinese strengths in manufacturing, the bicycles are cheap to produce and require limited upkeep. This means that the companies can charge low fees for the rides after the customer makes an initial deposit. This makes bike sharing cheaper and more convenient than taking a bus.

Third, there is a huge home market. There are many large and densely populated Chinese cities with at least some public transport – fertile ground for dockless bicycle sharing. With the new-found popularity of 4G mobile internet in China (it only overtook 2G in late 2016) and digital payments, there is high demand for data-heavy apps.

The other big factor in bicycle sharing companies’ success is the surprisingly laissez-faire approach of the Chinese government. Until recently, the environment was a low concern for policymakers, and discussion of its cities’ pollution was discouraged. Beijing’s media even used to euphemistically refer to the toxic skies as “mist” or “fog”.

But as the environment became China’s biggest cause of social unrest, the government changed tack and began promoting more sustainable policies, as well as a more high tech economy. In this context, a home-grown technology based approach to greening China’s cities became a no brainer – particularly given dockless bicycle companies did not charge city governments for the service, as there is no infrastructure to install.  

Both companies are now rapidly expanding internationally at an astonishing rate. In June 2017, Manchester became Mobike’s 100th city. Five months later in Berlin, they’d doubled their city count.

In London, Ofo says it aspires to operate 150,000 bikes – more than 10 times as many as Santander Cycles. With pollution and public health rising up the list of mayoral priorities, perhaps these smart bikes will become a permanent feature of European cities.  

Want more of this stuff? Follow CityMetric on Twitter or Facebook

 
 
 
 

As EU funding is lost, “levelling up” needs investment, not just rhetoric

Oh, well. Image: Getty.

Regional inequality was the foundation of Boris Johnson’s election victory and has since become one of the main focuses of his government. However, the enthusiasm of ministers championing the “levelling up” agenda rings hollow when compared with their inertia in preparing a UK replacement for European structural funding. 

Local government, already bearing the brunt of severe funding cuts, relies on European funding to support projects that boost growth in struggling local economies and help people build skills and find secure work. Now that the UK has withdrawn its EU membership, councils’ concerns over how EU funds will be replaced from 2021 are becoming more pronounced.

Johnson’s government has committed to create a domestic structural funding programme, the UK Shared Prosperity Fund (UKSPF), to replace the European Structural and Investment Fund (ESIF). However, other than pledging that UKSPF will “reduce inequalities between communities”, it has offered few details on how funds will be allocated. A public consultation on UKSPF promised by May’s government in 2018 has yet to materialise.

The government’s continued silence on UKSPF is generating a growing sense of unease among councils, especially after the failure of successive governments to prioritise investment in regional development. Indeed, inequalities within the UK have been allowed to grow so much that the UK’s poorest region by EU standards (West Wales & the Valleys) has a GDP of 68 per cent of the average EU GDP, while the UK’s richest region (Inner London) has a GDP of 614 per cent of the EU average – an intra-national disparity that is unique in Europe. If the UK had remained a member of the EU, its number of ‘less developed’ regions in need of most structural funding support would have increased from two to five in 2021-27: South Yorkshire, Tees Valley & Durham and Lincolnshire joining Cornwall & Isles of Scilly and West Wales & the Valley. Ministers have not given guarantees that any region, whether ‘less developed’ or otherwise, will obtain the same amount of funding under UKSPF to which they would have been entitled under ESIF.


The government is reportedly contemplating changing the Treasury’s fiscal rules so public spending favours programmes that reduce regional inequalities as well as provide value for money, but this alone will not rebalance the economy. A shared prosperity fund like UKSPF has the potential to be the master key that unlocks inclusive growth throughout the country, particularly if it involves less bureaucracy than ESIF and aligns funding more effectively with the priorities of local people. 

In NLGN’s Community Commissioning report, we recommended that this funding should be devolved to communities directly to decide local priorities for the investment. By enabling community ownership of design and administration, the UK government would create an innovative domestic structural funding scheme that promotes inclusion in its process as well as its outcomes.

NLGN’s latest report, Cultivating Local Inclusive Growth: In Practice, highlights the range of policy levers and resources that councils can use to promote inclusive growth in their area. It demonstrates that, through collaboration with communities and cross-sector partners, councils are already doing sterling work to enhance economic and social inclusion. Their efforts could be further enhanced with a fund that learns lessons from ESIF’s successes and flaws: a UKSPF that is easier to access, designed and delivered by local communities, properly funded, and specifically targeted at promoting social and economic inclusion in regions that need it most. “Getting Brexit done” was meant to free up the government’s time to focus once more on pressing domestic priorities. “Getting inclusive growth done” should be at the top of any new to-do list.

Charlotte Morgan is senior researcher at the New Local Government Network.