Expert on Mobike exit: Business model of bike-sharing 'a joke'
Analysts weigh in on state of industry as Mobike calls it quits in Singapore
Reality has caught up with the bicycle-sharing industry, experts told The New Paper yesterday, after Mobike became the third major operator here to call it quits.
The Chinese company, acquired last year by Meituan Dianpingfor US$2.7 billion (S$3.7 billion), applied to the Land Transport Authority (LTA) on Monday to surrender the operating licence it was granted in September last year.
With just two viable operators, SG Bike and Anywheel, and a combined fleet size of just 4,000 bicycles left, the industry could be back to square one.
Singapore University of Social Sciences (SUSS) transport economist Walter Theseira told TNP that economic fundamentals have caught up with the industry.
The Nominated MP said: "It is a business model that defied gravity because there was a lot of cheap money pumped into it.
"Gone will be the days of just putting bikes everywhere.
"We could very well go back to the original model that LTA wanted to pilot, which was essentially a government-subsidised trial service at the Jurong Lake District."
In March 2017, LTA pulled the plug on plans for a government-run national bicycle-sharing scheme as private operators like Mobike, oBike and ofo flooded the streets with their brightly coloured two-wheelers.
SUSS Associate Professor Park Byung Joon, an urban transport expert, agreed that government subsidies, similar to those for bus and rail services here, are one way to keep bicycle-sharing a part of Singapore's public transport system.
He said: "Commuters using public transport already receive a heavy subsidy. If that is the case, then why shouldn't they do it for bicycles?"
Both agreed the current fares were never likely to have covered rising operational costs.
Prof Park added: "If you look at bicycle-sharing, no one is making any money anywhere in the world. From a business point of view, this is a joke. They really don't have any viable business plan. The good times are over. Now we have to pay."
Mobike's parent company Meituan Dianping told TNP its withdrawal is part of its plan to rationalise its South-east Asian operations.
Its spokesman said it is working with LTA to explore all its options, including potentially transferring Mobike's operations or licence to existing licensees, minimising the impact to consumers.
He said: "We have also committed that should there be any withdrawal, it will be managed in a highly organised and responsible manner."
TechCrunch reported last Friday that more than 15 full-timers, as well as contractors and third-party agency staff in Mobike's Asia-Pacific operations teams, spanning Singapore, Malaysia, Thailand, India and Australia, were being let go.
The eventual goal is for Mobike to be operational only in its native China.
A local Mobike worker was shocked to learn about the company's exit plans.
Speaking to TNP on the condition of anonymity, the employee described finding out about the layoffs last Friday via a call from the company's human resources department in China.
The employee said: "There were no prior signs that the business was going downhill.
"I was given compensation but it did not feel like one. It was sudden, insufficient, and also it was made known during the supposed annual performance bonus period."
Mobike's withdrawal follows the disastrous exit and liquidation of oBike last year, and Alibaba-backed ofo's ongoing financial struggles.
The latter's licence to operate here was suspended last month for failing to meet regulations, and could be cancelled if ofo's bikes are not cleared from public spaces by today.