Getting a grip on bike-sharing

In the space of just a few months, bike-sharing has become a feature of the Singapore commuting scene, as a rash of yellow, orange and silver bikes pop up across the island.

To date three firms have entered the market in quick succession: Singapore-founded ObIke, along with Chinese start-ups ofo and Mobike, the latter backed by Chinese tech giants TenCent and Foxconn. With all three promising to boost their fleets into the tens of thousands by the end of the year, we can expect to see a lot more of them in our streets and parks.

Cities such as New York, London and Paris have been operating dock-based bicycle sharing schemes for several years with varying degrees of success. These rely on fixed electronic racks for users to pick up and return bikes – a system favoured by city authorities because it forces users to park their bikes in designated areas without cluttering other public spaces.

Amid growing complaints of indiscriminately parked bikes and careless riders, the Land Transport Authority has said it will create more official bike parking areas, while several town councils have started to enforce rules on where bikes can be used and stored.

The model used by the new operators here in Singapore however is to go dockless. Pioneered in China and dubbed “the Uber for bikes”, this free-floating model uses smartphone apps and GPS tracking to allow users to rent and drop off bikes on demand, wherever they choose.

The dockless model brings its own particular challenges, especially in a compact, high-density city like Singapore that covets order.

This model has seen rapid growth in China over the past year or so, with around a dozen firms despatching millions of bicycles onto the streets of major Chinese cities. This has led to a backlash from city authorities, increasingly frustrated with scores of bikes clogging up pavements, parks and other public spaces.

In Beijing and Shanghai alone, thousands of share bikes have been impounded and regulators have tightened up laws on the usage of the bikes.

Chinese share bike start-up Mobike has backing from tech giants TenCent and Foxconn

 

Here in Singapore, regulators are also starting to step in. Amid growing complaints of indiscriminately parked bikes and careless riders, the Land Transport Authority has said it will create more official bike parking areas, while several town councils have started to enforce rules on where bikes can be used and stored.

All 15 town councils run by the ruling People’s Action Party have said they plan to issue a common set of regulations soon on standards for parking, riding and managing share bike networks. As operators push ahead with expansion plans, we can expect more regulation as the sheer volume of bikes on the streets grows.

Public resource

If bike-sharing is to be successful in Singapore, operators and regulators need to cooperate and coordinate, avoiding the more confrontational situation we’ve seen develop in some parts of China.

Fleets of bikes running into the tens of thousands take up a lot of room in an already crowded urban setting. At the same time, bike-sharing firms are exploiting a public resource – roads and sidewalk space – for private business gain.

As such, pressure will grow for companies and regulators to work out between themselves an appropriate means and level of compensation for this usage.

One approach might be in the form a small fee per bike in each operator’s fleet. For example, car2go in Washington DC, a free-float car sharing operator, pays the city’s transport regulator almost US$3,000 (S$4,150) per year for each of its approximately 450 Smart cars, because they are all parked on public streets when not in use.

In the case of bike-sharing, such a fee-based approach would incentivise operators to develop smart solutions to calibrate the size of their fleet sizes and manage its deployment. Meanwhile regulators could use the fees collected to oversee and support the operations of bike- sharing including, for example by allocating and maintaining designated share-bike parking areas near to MRT stations, HDB blocks and other popular areas such as shopping malls and food courts.

This would help integrate bike-sharing within the existing public transport infrastructure and encourage its use for so-called “last mile connectivity”. At the same time, firms should also look at how incentives and penalties can be better employed to educate users in sharing etiquette.

Ultimately it comes down to a trade-off. Encouraging commuters out of their cars and onto bikes fits with the government’s push for a cleaner city.

Meanwhile, for commuters to make bike-sharing a habit, there must be enough bikes available as and when consumers want them.

Bike-sharing firms and regulators will need to find ways to balance these costs and opportunities if the bike-sharing culture is to take root.

  • Author Profile

    mm

    He Long is an Assistant Professor in the Department of Analytics & Operations at NUS Business School. His research interests include online retailing and shared transport and logistics systems.

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