Bike-sharing services

Theft, vandalism force Hong Kong bike sharing start-up Gobee to retreat from Europe

Asian bike sharing operators have embarked on overseas expansion over the past year as they burned through cash at home amid fierce competition

PUBLISHED : Monday, 26 February, 2018, 6:30pm
UPDATED : Monday, 26 February, 2018, 11:47pm

Hong Kong start-up has become the first Asian bike sharing operator to retreat from Europe after incurring mass thefts and vandalism.

The company reported that over 1,000 bikes had been stolen and nearly 3,400 damaged during its four months of operation in France, prompting it to pull out of the European country, according to The Guardian. A separate report from news wire Agence France-Presse said irresponsible acts by minors were to blame for the mass destruction of its fleet.

“It was sad and disappointing to realise that a few individuals could ruin such a beautiful and promising project,” Agence France-Presse reported the company saying. “We had to come to the conclusion that it could not be viable and there was no other choice for us than shutting down, nationwide.”

China’s major bike sharing operators have embarked on overseas expansion as they burned through cash at home amid fierce competition, resulting in the closure of a dozen bike sharing firms over the past year. The business model, where users unlock a bike with an app and pay for their ride by scanning a QR code, has so far been exported to Singapore, Europe and the US.

Gobee didn’t immediately respond to emailed inquiries while calls to its office in Hong Kong went unanswered.

Vandalism and theft together with irresponsible parking have become headaches for bike sharing operators operating in mainland China and in overseas locations. Last year, five Gobee bikes were found dumped in a river near Sha Tin in Hong Kong, triggering police investigations into criminal damage.

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The company had rolled out over 2,000 bikes in Paris alone and boasted having more than 150,000 users across the European continent, before pulling out from Brussels for the same reasons and closing its operation in Italy, according to a media report by Techcrunch.

The second last post on Gobee’s official Twitter account was dated October 13 last year, when the company said the “uptake” for its bikes in both Paris and Lille in northern France was “overwhelmingly positive”. It hasn’t posted any new updates since October 20.

With Gobee’s exit, there are only three remaining Asian bike sharing operaters in France: Singapore’s oBike and Chinese duopoly Ofo and Mobike, which together hold a combined 95 per cent share of the mainland market.

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Mobike reported overseas bike sharing by Chinese users surged 3.5 times during the Lunar New Year break earlier this month, with Singapore, Sydney and Milan among the cities with the highest number of rentals.

However, analysts have been sceptical over the long term viability of overseas operations given the hefty costs involved in buying and maintaining bikes and the unclear path to profitability.

Still, the industry can’t be ignored given that it is expected to be worth 23.68 billion yuan (US$3.7 billion) by 2019, according to consultancy iResearch. Besides rental income and prospects for third party advertising revenue, bike sharing companies have proven effective at promoting mobile payments and could find ways to monetise the massive amounts of user data they collect. Such data could be analysed for consumer patterns, providing valuable insight to marketers and businesses.