Mobike to go deposit free amid slowing market and growing competition
Competition in China’s bike-sharing scene has intensified along with pressure to turn a profit
Mobike, the China bike sharing firm owned by Meituan-Dianping, said on Thursday that users no longer need to pay deposits to rent bikes and it will refund those who have already paid them, amid growing competition and moves towards deposit-free services by rivals.
Previously Mobike customers were required to pay a 299 yuan (US$45) initial deposit to start using the company’s dockless bicycles. Mobike’s announcement comes four months after its rival, Ant Financial-backed HelloBike, said users with a score of more than 650 on Sesame credit, a social credit system developed by Alibaba affiliate Ant Financial, no longer need to pay deposits.
Competition in China’s bike sharing scene has intensified with dozens of participants now effectively whittled down to a game of three main players. Beijing-based Ofo and HelloBike are backed by Alibaba Group and Ant Financial respectively while Mobike was initially funded by Tencent before being fully acquired by Meituan for US$2.7 billion in April. At stake is an industry that is potentially worth about 24 billion yuan (US$3.8 billion) by 2019, according to market research firm iResearch.
A Mobike spokeswoman could not be reached for comment immediately.
HelloBike mainly operates bike sharing services in China’s second and third-tier cities, processing about 20 million orders per day, it says. The company received a fresh cash injection of 2 billion yuan (US$301 million) from Ant Financial last month. Meanwhile Ofo cancelled deposit-free tests two months ago based on Sesame Credit in China’s 20 cities, saying it would begin to “develop a credit system of its own.”