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Bike-sharing Business – Is it an Uphill or a Downhill Ride?

 

 

 

The sharing economy has transformed the way we live, work, play and travel. These include sharing homes with tourists, private cars with strangers and, the latest, bicycles. Within a short span of six months – starting from January to June 2017 – three bike-sharing operators have exploded into the scene. Today, sightings of yellow and orange bikes have become common on the streets of Singapore. One wonders how the local pioneer in bike-sharing business, oBike, is enjoying the ride thus far and keeping its lead on the competition. 

 

Prior to the inception of bikesharing operators, cycling is often perceived as a form of sports or leisure activity in Singapore. Who would have pictured that smart bicycles parked all around Singapore was all it took for people to start seeing cycling as an inexpensive mode of transportation and, more fundamentally, inspire widespread interest in cycling. Indeed, to say that oBike has built an innovative business is an understatement. It has paved the way for a new means of getting around in Singapore.

 

BIKE-OWNERSHIP VERSUS BIKE-SHARING Let’s face it. 

Singaporeans, unlike people in many other countries, are not huge cycling fans. While the sweltering weather is definitely a contributing factor, scarce bicycle parking racks, insufficient designated cycling paths and busy roads also made bike ownership less essential and attractive compared to car ownership, despite the high cost of the latter. 

 

However, thanks to oBike, cycling has become an activity that is no longer tied to bike ownership. As long as one has a smartphone (which is almost everyone today) and the user-friendly mobile app installed, they can scan, hop on and hop off, anytime – be it in the wee hours of the morning or the middle of the night; and get to anywhere, regardless of the destination, whether it is to the nearest train station or the neighbouring supper place. 

 

And these are not the only conveniences bike-sharing services like oBike offer. Other than having to exercise care when riding, users are not expected to carry out any bike maintenance duties such as cleaning the bike or oiling the gears. In addition, stress arising from potential theft is also non-existent. All in all, the key driving force behind the growing bike-sharing craze in Singapore has to be the freedom to drop off bikes at any designated public bike-parking zone. This provides optimum flexibility for users – they can choose to change their transport modes or routes as they wish without being limited to fixed starting and ending points. 

 

CYCLING AS A BETTER WAY TO COMMUTE

And truly, cycling has proven to be more than just an environmentally friendly option for first- and last-mile commuting. For an urban city like Singapore where traffic congestion is an everyday reality, bike-sharing services also help to ease traffic congestion by connecting the mile from home or office to bus stop or MRT station and vice versa; making the travelling experience on public transport more seamless. 

 

Although some may argue that existing feeder bus services have already taken care of this need, there is no denial that bike-sharing services triumph in giving users flexibility and control. Users have absolute control in the time they start and end the journey and the preferred route to take.

 

In addition, the Singapore government’s continued push in creating a carlite society and the promise of the completion of a 360-kilometre cycling path network by 2020 has also fuelled the appeal of cycling. 

 

SUSTAINABILITY OF BIKESHARING AS A BUSINESS

At a glance, everything looks rosy for the bike-sharing business – favourable opportunities and strong market demand. But surely, three operators to serve a population of about 5.6 million, is one too many. Fortunately, oBike not only enjoys the first mover advantage, but also home ground familiarity.

 

As a first mover, oBike has established strong relationships with the local authorities and town councils. This facilitates discussions on arising issues as well as cements opportunities for future collaborations. As a homegrown company, oBike also has a better understanding of the population’s lifestyle habits. This proved to be especially critical in the early days of operations which helped determine the optimal spots for deployment of bikes.

 

Since then, oBike has been leveraging on analytics to learn more about usage behaviours, including duration of use, distance travelled, and the popular starting and ending points. In addition, continuous enhancement of mobile application features in response to user feedback, and proactive expansion and upgrading of physical bikes fleet have also kept oBike ahead of its peers.

 

Before 2017, bike-sharing exists merely as a concept. Today, with an estimated combined fleet size of 30,000 bikes among three operators, it is a thriving industry with evidence to suggest that it will continue to grow at an accelerating pace. And in the case of oBike, the sights are already set for the next lap – Southeast Asia.

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