Wuhan Huantou and Bluegogo have exited the bike-sharing scene. Many did not expect the rapid withdrawal of these bike-sharing giants.
Hubei province government announced plans to shut down Wuhan Huantou. Wuhan Huantou is Wuhan’s bike rental company. The firm, one of many bike rental firms, was backed by the local government. Wuhan Huantou will remove the 40,000 bikes they own from the streets of Wuhan.
Picture: Wuhan Huantou bikes
Back in 2014, Huantou shared its aspirations to transform Wuhan into a smart city. Wuhan was on the lips of everyone in China, being touted as the example of a global intelligent city. Huantou acquired other bike operators over the years. It installed more than 2,000 parking racks and 40,000 bikes.
Picture: Wuhan Huantou shut-down announcement
Enter the private dockless bike-sharing firms
However, private bike sharing firms like Ofo, Mobike, Bluegogo infiltrated top Chinese cities. These private bike-sharing firms have superior user designs. Users only need to unlock bikes with their mobile phones. Users can also park these bikes outside of designated racks and zones. These private bike-sharing solutions are both convenient and a pain to city management. More than half a million bikes now spread across Wuhan. Some prefer government run bike sharing services, which require bikers to park bikes at designated areas.
Today, China leads the bike-sharing sector globally with the most bicycles available for sharing.
Table 1: Fees of sharing bikes
Source: Financial Times
Within China, competition is stiff among both public and private bike-sharing firms. Each firm produces more bicycles to gain the upper hand. Funding for top private bike-sharing firms is ample. Ofo became the world’s first bike-rental unicorn after reaching a US$2 billion valuation in April 2017.
Source: Financial Times
Top private bike-sharing firm Bluegogo is the first giant to fall
Caixin reported that Bluegogo had failed to pay salaries since July 2017. It signals the fall of a bike-sharing giant. The CEO Li Gang also became uncontactable. At the same time, Bluegogo’s application has also been taken off iTunes. The public now expects the bike-sharing sector to consolidate. More firms are expected to foreclose. Wuhan Huantou is but one of the many sharing economy firms to meet its fate.