Does the Cost of Bike Sharing System Match Its Benefit?

Xiaoyu Lu

6077009450

Nov. 4th

Essay#3

A crucial question: Does the cost of bike sharing system match its benefit?

When the group Provo painted fifty bicycles white and placed them on the streets unlocked in Amsterdam, 1965 (DeMaio 42), Provo introduced a new market which would flourish in major cities all over the world in the next 15 years was opened. Nowadays, the public bicycles, named as Bicycle Sharing System (BSS) afterwards, are found everywhere on the roads, especially in China. BSS has become the fashion trend in China in the past five years. Orange and red, as the representative color of Ofo and Mobike, two dominant BSS companies in China, are now one of the critical elements in Chinese' daily life. However, BSS has brought more harm to the city than we thought it would. In the past five years, different consequences of the excessive number of shared bikes in large cities gradually emerged. The waste brought by mass production and the traffic congestion questions about the result of promoting BSS. Does BSS alleviate environmental pollution and traffic just as what those companies claimed? Does sharing economy, such as BSS, really plays a vital role in improving the society? Both the answers are uncertain. In fact, evidences showed that the benefit brought by BSS might not equal to what was paid for the popularization of BSS.

Dockless BSS, just as its name, is a bicycle sharing system that requires no locking racks but only electronic locks. The pile-free design enables customers to find a shared-bicycle anywhere, also, to park it anywhere. One concept of dockless BSS is "Solving the problem of the last mile," that is, providing a cheap and convenient vehicle on the way to/from public transportation stations or transferring to a different public transportation. The other concept of dockless BSS is “reducing congestion and our city's carbon footprint.” by advocating biking (MoBike). Through advertising, it is now commonly believed that using dockless BSS would help improve environment and traffic conditions. People now believe that, by promoting biking, less carbon dioxide would be emitted and traffic condition in large cities would be improved after the widespread of BSS. This is a conventional wisdom, led by the advertisement of BSS companies. In fact, BSS have also brought many unexpected harms.

After the first dockless BSS system was introduced in Peking University, the storm of dockless BSS swept all over China. Up to now, over 30 million dockless shared-bikes were placed in China (China Commercial Industry Research Institute). As Ofo released its data, over 6.6 million Ofo “Little Yellow Bicycle” were placed at the end of June 2017, making Ofo the largest BSS company in China. China’s BSS market is now owning over 250 million registered users and a market size of 17.8 billion CNY. The promising market attracted countless investments and companies. The extremely competitive market situation and huge profit inside the market led to the number of bikes placed far exceeding the demand in many large cities.

As a senior engineer in Beijing Urban Planning Institute said on China News, the total demand of shared bikes of Beijing citizens was among 1.7 million, calculating with the turnover rate of 4 times per day per bike. However, the total amount of shared bikes in Beijing was 2.35 million in 2017, reaching over-saturation (Wu). The redundant bicycles resulted in the disordered bicycle parking along the pedestrian road and in core traffic areas. Especially in the transportation junction areas at rush hours, hundreds and thousands of people ride shared bikes to the area——just as what advertisements said, "solved the problem of the last mile;" and people left all the bikes at transportation stations. The case not only took place in China but also happened in most large cities which encourage BSS. Not long after oBike began to promote dockless BSS in London, complaints occurred. British complains that "Sharing Bikes" used sharing as an excuse to produce more and more sharing bikes (Liu). In fact, this would only occupy the precious public space. The complaint earned British Government's attention: the London City Hall raised a proposal in February this year, providing feasible future regulation aspects for dockless BSS (LDN_gov).

Moreover, according to a survey conducted by Nanfang Zhoubao, most people used shared bikes on their way to the subway station or during transferring to different public transportation----just as the core concept of BSS, solving the problem of "the last mile." BSS hardly reduce the number of cars on the road in the long run. During rush hours, the considerable number of shared bikes on the road increased traffic burden. In other words, the widespread of BSS didn't' alleviate traffic congestion in a significant way; it created a barrier in traffic.

Another drawback of BSS is the high deterioration rate and the unnecessary use of resources and waste brought. Comparing to the carbon dioxide reduced by biking, the pollution brought by wasted bikes is more significant. Three major factors contributed to the extreme high deterioration rate: government regulations, unsecured lock and customer's indifference on protecting public bikes.

Government regulations have accelerated abandoning unused shared bikes. In the past two years, the Chinese government has realized the traffic pressure brought by overwhelming BSS, too. Thus, regulations were put forward in major cities such as Shanghai and Beijing to reduce the number of unused shared bikes in those cities. Bikes were forced to be recycled, however, few solutions were provided by those BSS companies. The precise criteria of the number of shared bikes each company can place and tight deadlines compelled companies to recycle almost one-third of the shared bikes. However, most of them are still usable. The number of shared bikes in Beijing decreased over 150,000 four months after publishing government regulations (Zhou). With a stricter control, according to the data released, Shanghai abandoned over 516,000 shared bikes until late September 2017, only one month after regulations put forward on August (Yang, Chinese government).

Not only the regulations resulted in the growing number of wasted bikes, but also the theft contributed to it. Without fixed parking lot and strict security alarming system, the "freedom" of dockless BSS is its advantage and its disadvantage. Unsecured conditions and the absence of alarming system attributed to the considerable number of theft committed in the past few years. Components of shared bikes, like bike saddle and tires, are now a new target for thieves. According to incomplete survey, more than 10 thousand shared bikes were damaged during the first quarter of 2017. Meanwhile, over 40% percent of shared bikes in Shanghai is more or less damaged (Ren).

Customer's indifference while using shared bikes composes another part of the cause of public bike destruction. Up until now, customers would not be required to submit a fine for destroying public bikes. As customer's careless while using public bikes would not be punished, fewer people treat public bikes as their own bikes.

Both the artificial destruction and government regulation resulted in the occurrence of "Bicycle Graveyard." A video called “No Place to Place” was very popular online a few months ago. Photographer Guoyong Wu took pictures of the “bicycle graveyards” all over the country. In those pictures, thousands and millions of wasted shared bikes were placed in line, creating an incredible spectacle. Surveys show that the cost of recycling and renewing shared bikes for BSS companies is over 1,000 CNY per bike, which far exceeds the cost of a new bike (Wang). Due to the high cost, companies reject to be responsible for those abandoned bikes, leaving them in city corners. This raised the question of whether BSS really solved environmental pollution. During the flourish period of BSS several years ago, hundreds of bike factory were built to meet the demand. However, most of the factories have been shut down in the past a year, leaving tons of waste behind. The waste produced during the mass production of shared bikes and after the deterioration can’t equal the CO2 pollution reduced by BSS. According to statistics, more than 300,000 tons of scrap metal would be produced if simply abandoning all the excessive bikes (Wang).

Different drawbacks are cracking the Chinese bike sharing market down. After 5 years of fermentation, just as Clay Chandler mentioned in Fortune Magazine, China’s bike-sharing bubble goes bust. After Bluegogo, the third largest BSS company in China ceased operation in Nov. 16th, 2017 (Li), news was released two days ago that Ofo defaults in paying back the 200 CNY deposit customers paid at first. Smaller BSS companies shut down the business one by one (Feng).

At the same time, the market of sharing economy grows in worldwide. Different regions might differ in detail, but they share things in common. The market of BSS in Europe and Australia has already shown their drawbacks; the US is experiencing the flourish of shared scooters just as China did in shared bikes two years ago. Other sharing economies like shared umbrella and car sharing (car-pooling) have emerged recently. Although it is commonly believed that sharing economy can save resources, sharing economy could never become the shortcut of reducing environmental pollution.

However, sharing economy can never reach its goal under current situation and running model. It’s easy to draw conclusions from our previous experiences on bike sharing. Two characters in human nature stopped sharing economy from realizing its goal.

First, people’s greed prevents the success, or, the effectiveness of sharing economy. Sharing economy, including bike sharing and car-pooling, along with umbrella sharing which was carried out in China recently, is becoming an essential part in the coming new era. By sharing out unused resources, people try to save the limited resources and decrease environmental pollution. However, the current sharing economy doesn't match the concept of sharing: it should be described as renting. Factories recognized the considerable profit in the popular sharing economy and produced a large number of new products to fit in demand. Due to the extremely competitive and profitable market, supply far exceeds the demand. The greed deep inside human nature drives companies to devote more resources to earn profit disregarding the goal of saving resources. The bicycle graveyard is the best example for the result of companies’ excessive production of shared products driven by profit.