Chinese dock-less bike-sharing model: The market situation and underlying implications

Abstract

The sharing economy is a recent phenomenon which profoundly transformed the way of doing business nowadays. Its development has been possible due to the technological innovation and the broad use of the Internet, which has become an integral part of people's daily life. Bicycles have been every days' mean of transportation since a long time ago. In 1965, for the first time, the combination of the concept of sharing and the bicycles had created the "bike-sharing": bikes which can be borrowed by everyone who can leave them for the next users. Europe has been the founder of the bike-sharing, but this research focuses on the Chinese dock-less bike-sharing start-ups, which originated within China and started to take a growing position in the sharing economy market since late 2015. In particular, it will explain these start-ups business models, who are the leading players in the new bike-sharing market and how is the situation in China and worldwide. Further considerations are about the positive and negative consequences and implications for the cities, the economy and the society. The research is based on the analysis of the development of bike-sharing start-ups, mainly relying on Chinese and international news available on the Internet since the object of the investigation is a very recent phenomenon which is still evolving. The findings suggest that dock-less bike-sharing business has been overgrowing both in China and abroad, but due to the fierce competition, it has still not reached a sustainable model. Notwithstanding, the bike-sharing start-ups are still growing in number, with many new establishing, and in size, with the growth of the major ones, such as ofo and Mobike. The reason for going further in investing in a non-profitable business seems to be related to some Chinese specific characteristics, such as the centralized decision-making power of the central government, the current boom in sharing economy's industries and the advocacy for the development of the social credit system, smart-cities and smart-transportation through the use of big data.