As Gobee.bike packs up, is it the end of the road for bike-sharing services in Hong Kong?
Can licensing and regulation save an industry beleaguered by theft, vandalism and complaints over indiscriminate parking?
It’s been a rocky road for the bike-sharing industry in Hong Kong and on Tuesday, the first operator to launch in the city announced it would close because of losses and high maintenance costs.
Gobee.bike had successfully raised US$9 million last August to fund its technology, research and development, as well as its global expansion. But the company ceased operations in France and Italy earlier this year, citing the same reasons.
The Hong Kong start-up, along with its six rivals, also faced theft, vandalism and complaints over indiscriminate parking.
Existing Gobee.bike users can continue to use the service until July 17 and receive a refund of HK$399 in deposit, but not the remaining credit in their accounts.
The demise was a setback to an industry that had barely taken its training wheels off.
1. What’s the market situation of bike-sharing in Hong Kong?
Hong Kong start-up Gobee.bike pioneered the launch of bike-sharing services in the city in April 2017 in districts such as Sha Tin, Tai Po, Ma On Shan, Tuen Mun, Fanling, Tseung Kwan O and Tung Chung. Users could rent bikes by scanning a QR code with their mobile phones. They did not have to pick up and drop the bicycles at designated locations like traditional bike rental services.
In little more than a year, the industry evolved quickly. A total of seven bike-sharing firms competed for business in the city with 25,000 bikes, according to the Transport Department. Among them, 17,000 were Gobee.bikes, the company claimed.
2. What is the competition like in Hong Kong and other cities in Asia?
The bike-sharing market in Hong Kong is small compared with other places as there are not enough consumers in the city, according to economist Andy Kwan Cheuk-chiu, director of ACE Centre for Business and Economic Research. Kwan said the fallout of Gobee.bike was to be expected as Hongkongers mostly ride as a weekend activity or for leisure, rather than a daily commute.
“The companies have overestimated the demand and underestimated the cost,” Kwan said.
There was also intense competition in mainland China. At its peak, there were about 100 bike-sharing companies in the country, but the number dwindled to a handful after many start-ups failed to find a sustainable profit model.
In Singapore, seven companies had applied for a licence by July 7 as the government rolled out a regulatory scheme for the industry to cut down indiscriminate parking. But a few companies earlier announced they would pull out of the island nation.
3. What is the controversy of bike-sharing industry?
It has been a bumpy ride for bike-sharing companies in Hong Kong as the current operational model, which relies on dockless parking, has triggered public hostility.
Rick Hui Yui-yu, Sha Tin district councillor, said at its peak, 20 bikes were found parked on a road that was just 100 metres long, causing inconvenience to pedestrians. He criticised the companies for using public spaces to generate profits.
“It’s difficult to work it out,” Hui said, “Hong Kong people want everything in order.”
Edward Lau Kwok-fan, lawmaker of the Democratic Alliance for Betterment and Progress of Hong Kong, said he used to receive a few complaints a week after the launch of bike-sharing services. The North District councillor said the government should explore a licensing scheme and monitor the development of bike-sharing industry.
4. How do other countries address the issues?
Earlier this month, the Singaporean government introduced a licensing scheme and set out strict conditions on fleet size to ensure the market was not flooded with bikes. Regulations were also rolled out to cut down on indiscriminate parking. Operators are now required to remove illegally parked bikes and install geofencing technology on the bikes, which will charge users who fail to park in designated areas.
Various Chinese cities also have brought in their own regulations. For example, Beijing, Shenzhen, Hangzhou and Tianjin have issued guidelines encouraging operators to use electronic fences or cooperate with third parties to manage bike parking.