BEIJING -- Beijing's roads were a riot of colors until recently as consolidation in the bike-sharing industry in China weeded out several players. Now, analysts say companies still need to find a way to monetize this business.
The main colors on the roads - white, yellow and blue - reflect the outcome of the industry realignment. White bikes are owned by Hellobike which is backed by Alibaba Group Holding; yellow by ofo and Mobike after its acquisition by Meituan Dianping meant it had to change the color of its bikes from orange; and blue by Bluegogo, which has been acquired by Didi Chuxing.
The landscape of today's bike sharing market is totally different from three years ago when the industry was flush with newcomers and capital.
But as regulation caught up with the industry, investment slumped and smaller players were swept up by bigger peers. Users are now no longer allowed to drop off bikes anywhere they liked and companies are required to implement better management of the bikes.
In September 2017, Beijing put a restriction on the addition of new bikes in the city, a move that was followed by other cities. Last year, Beijing capped the number of shared bikes at 1.91 million, adding that it may reduce the number. That figure was already over 20% lower than the total number of bikes in service in 2017.
Furthermore, data showed that shared bikes were used 1.42 million times a day in the Beijing area in the first half of 2018, meaning that each bike was only ridden 0.7 times a day on average. For Mobike, that figure was 1.7 times and Hellobike 1.6.
In a bid to improve turnover, Mobike and Hellobike announced in April they would double hire fees in Beijing to 1 yuan (14 cents) per 15 minute. In July, Mobike also lifted its base fee in a number of other municipalities and provinces.
Whether such moves will yield the results the companies hope for will depend on whether they can provide a commensurate improvement in service. Users will accept higher fees if they feel they can gain from using the service.
The battle between bike-sharing companies is only just beginning as companies have to innovate to survive. The change in the color of bikes marks merely the beginning of the fight.
36Kr, a Chinese tech news portal founded in Beijing in 2010, has more than 150 million readers worldwide. Nikkei announced a partnership with 36Kr on May 22, 2019.
For the Japanese version of this story, click here.
For the Chinese version, click here.