The Land Transport Authority of Singapore (LTA) has reopened its cycle of applications for bicycle sharing.
License applications are open every January and July, this time from July 22nd to August 26th.
This means that companies wishing to offer bike sharing services and / or existing operators wishing to expand their fleets can now submit their applications to LTA.
New companies can apply for a sandbox license to share up to 1,000 bikes on a small scale in Singapore. LTA must first evaluate their operations before making any further requests to increase their fleet size.
After this final cycle of use, is it likely to spark another wave of bike sharing gamblers in Singapore?
Regardless, it is time to take stock of the current bike-sharing landscape in Singapore and investigate whether this model will ever really take off or whether we will see more exits in the future.
S’pore can be traced back to two bike sharing players
In 2017, Singapore saw a boom in bike sharing. Many Chinese companies came onto the scene before local players joined the race.
At peak times, there were nine bike sharing companies in Singapore – oBike, ofo, Mobike, SG Bike, GBikes, ShareBikeSG, Baicycle, Anywheel and Moov Technology – offering a total of more than 200,000 shared bikes.
The bike-sharing landscape quickly got ugly, however. Since those dockless bike sharing services exploded on the streets, there has been indiscriminate parking and vandalism.
Photo credit: Joel Fu via the Love Cycling SG Facebook page
People frequently reported clogging pedestrian walkways and HDB cavity decks, badly damaging bicycles for sharing, and even throwing bicycles into canals.
It was just as chaotic for the operators. Here is a brief summary of their entry and current status:
- oBike – The local bike sharing company oBike is the pioneer. It was first launched in 2017 and later discontinued in 2018 due to "difficulties" in meeting LTA's new requirements and guidelines. Prior to its closure, it was embroiled in a controversy where users' $ 49 deposits were "secretly" converted to an SVIP subscription.
- ofo – The Chinese company ofo took part in the race in February 2017, shortly after a month after the local company oBike. In 2018, users started complaining about unauthorized transactions and there were reports of cash flow issues. Ofo mysteriously vacated its Singapore office at the end of 2018 and allegedly owed providers over S $ 700,000. LTA finally revoked the ofo license in April 2019 after failing to follow the instructions on how to remove their bikes despite multiple renewals.
- Mobike – Mobike, based in Beijing, started in Singapore in March 2017, making it the company's first overseas expansion. The local company SG Bike took over Mobike last year under a takeover agreement for S $ 2.54 million.
- SG bike – The local company SG Bike started in August 2017. It originally had a small fleet size of 3,000 motorcycles but the Mobike acquisition allowed it to absorb its fleet with a cap of 25,000. The enlarged fleet size made SG Bike the largest bike sharing operator in Singapore.
- GBikes – Financial technology solutions company FinTechSG tacitly launched GBikes in September 2017. In July 2018, operations were discontinued with gloomy financial prospects. It failed to receive S $ 20 million in funding, failed to sell to Grab, and its license was denied by the LTA.
- ShareBikeSG – ShareBikeSG was launched in January 2018. It differs from the other players in the use of mountain bikes that are suitable for off-road riding. ShareBikeSG was short-lived, however – it ceased operations in just six months.
- bicycle – With the support of the Chinese electronics company Xiaomi, Baicycle was launched in October 2017 and offers conventional bicycles, e-bikes and e-scooters. No updates on Baicycle have been released since then, but the signature white bikes are no longer seen in Singapore.
- Whatever – The local startup Anywheel was launched in early 2018. It recently received approval from LTA to expand its fleet from 10,000 to 15,000 effective July.
- Moov technology – Moov Technology received a sandbox license from LTA in April 2019. The company bought over 1,000 bikes from an ofo warehouse and renovated them with a new branding. In October last year it received a license to operate 10,000 bicycles. Moov quietly left the market during the breaker in April and May.
Photo credit: Anywheel
In total, Singapore currently only has two players: SG Bike and Anywheel.
SG Bike remains the largest bike sharing player in Singapore with a fleet size of 25,000, while Anywheel has a fleet size of 15,000.
S’pore’s biggest bike sharing player remains optimistic
Although many bike-sharing players left the company in 2018, Benjamin Oh, director of marketing at SG Bike, said in an interview with Vulcan Post that he was still optimistic about the industry.
“Our goal remains to work towards the fourth mode of transport in Singapore. We also look forward to further expanding our bike fleet size to better serve our users in the future. "
In order to achieve this goal of becoming a “fourth mode of transport”, Benjamin emphasizes that, in addition to careful planning and provision of bicycles, the operators must have more bicycles available across the island.
During this period (also when the LTA licensing system was introduced alongside the QR code parking system), the number of bicycles available in Singapore dropped quite a bit – there were only around 54,000 approved bicycle contingents among all remaining operators.
To date (after the withdrawal of other operators) the total fleet size approved by LTA is 40,000 bicycles.
– Benjamin Oh, Marketing Director at SG Bike
He added that SG Bike often receives requests from users to increase stakes in areas around Singapore, which is why he believes there are currently not enough bikes to ride around.
However, the fact that LTA is opening its biannual filings to give existing operators the opportunity to increase their fleet size shows that the authorities are promoting healthy competition and growing the entire bicycle sharing market, Benjamin noted.
Photo credit: SG Bike
When asked about SG Bike's traction, he found that COVID-19 has "changed and impacted" his business in many ways, from increased costs, operations, consumer driving behavior to events / partnerships like OCBC Cycle 2020 which has been converted into a virtual event.
"Since the start of COVID-19, SG Bike has steadily increased its manpower and resources to keep our riders safe," said Benjamin.
This would include actively cleaning the bikes before use and while on patrol, as well as offering hand sanitizer to users as part of their daily hygiene and safety protocols.
The SG Bike app also recommends that riders wipe off the points of high contact such as the handlebar, bell, basket, seat and Smart Lock before riding.
However, the breaker period was particularly challenging as the operations team was unable to carry out the planned maintenance and disinfection processes.
This led to increased residue and made their bikes less serviceable.
Despite the challenges posed by the pandemic, Benjamin noted that SG Bike has seen more trips as well as longer usage time per trip.
More and more users are using our bikes as a training tool, cycling through their neighborhoods and parks such as East Coast Park, Gardens by the Bay and Marina Bay.
There is (also) another group of users who use our bikes as part of their work, such as B. Food delivery driver for Foodpanda and GrabFood.
– Benjamin Oh, Marketing Director at SG Bike
After the PMD ban last year, the company worked with foodpanda to provide SG Bike bikes to their riders.
Overall, their bike sharing services have proven useful in transporting people for essential services. For this reason, SG Bike has given residents and health care workers free use of its bikes during the breaker.
Overall, Benjamin is confident that bicycles will remain a viable means of commuting and transportation during this time.
He describes bicycles as "single" solo "transport vehicles" that allow riders flexible control over the destination and "avoid the crowd". due to its natural social distancing.
"We will (will) continue to invest and use our resources to improve our services and bikes, and to give our users the best overall experience."
Will there be another boom in bike sharing?
To be honest, that's pretty unlikely. Singapore was once full of bike-sharing players, and now there are only two – that says a lot about the current landscape.
When it comes to the feasibility of the bike sharing model, it has never been profitable anywhere in the world. This isn't surprising considering their profit margin is low.
Also of concern is the fact that Singapore's biggest bike sharing player believes there is a shortage of bikes here. When users want to rent a bike and can't find a bike, they stop turning to bike sharing.
On the other side of the spectrum, however, the cost increases when operators own a large fleet of bikes, which inadvertently increases rental fees. If the consumer is unwilling to pay, the model just doesn't work.
Ultimately, it is imperative to find a balance when it comes to the rights of the fleet.
While the first wave of bike sharing companies made some dramatic exits – from bankruptcies to discontinued operations – it may have resulted in users losing confidence in bike sharing.
However, the second wave of bike sharing companies seem to be doing fine and have found a strategy to stay sustainable. They don't hand out more bikes or use them more than necessary.
Another consideration for riders, in order to stay in the game, is to ensure that their bikes are well maintained and have enough manpower to move improperly parked bikes.
Fortunately, the regulatory landscape is also favorable, with encouraging conditions that enable long-term growth.
As the bike sharing market matures, bike sharing companies could develop into a business-to-business model and create partnership and acquisition opportunities.
Photo credit: Didi Chuxing
This already applies to more mature markets. The ride-sharing company Lyft in the USA and Didi in China have acquired bike-sharing companies to expand their transport offerings.
In China, bike sharing has been linked to electronic payments, grocery delivery, and location-based advertising.
With these factors, the new wave of bike-sharing companies would have a higher chance of success.
There are still challenges that need to be addressed
However, building a successful bicycle sharing business model remains a challenge.
Shared bicycles still have to be parked in designated places so that the mobility offered does not take place from door to door. Consumer usage rates depend on the location of these designated areas.
To improve accessibility, a limited number of unused motorcycle parking spaces in industrial, commercial and residential areas could be opened up for bicycles.
Bike sharing companies also need to operate in denser areas to achieve a better balance between supply and demand and to reduce the cost of repositioning bikes.
Another challenge is scaling. With bike sharing, the operator owns the asset and rents it out in a short time.
This is no different from renting office space or any other property where increasing asset utilization is key to profitability. Each operation cluster is also pretty much independent.
The cost of damage to bicycles is difficult to recover as there are few fees on deposit, likely to increase market uptake and acceptance first, and consumer reluctance after oBike left the market with these deposits.
It remains to be seen whether bike sharing can be successful this time around, but the signs that this second wave of companies are aware of the potential challenges and are working to address them are encouraging.
As with personal mobility devices, bicycles have become part of urban transportation in developed cities. They help integrate public transport with commuting on the first and last mile and complement other forms of travel on the first and last mile.
Selected image source: LTA