How does bike sharing work in China

Rental bikesChina and the bicycle rubbish

China and bicycles, that's a legend. Pop songs have sung about the nine million bicycles that are said to roll around on the streets of Beijing. And there are millions in Shanghai too. In today's China, many bicycles are mostly cheap, colorful, and ready to rent on every corner.

However, the boom in bike sharing is coming to an end and revealing some ugly sides of the sharing economy. Some rental companies do not repay the users their deposit. Mountains of bicycle rubbish are currently emerging. And it was never entirely clear what was happening to the customer data.

"The companies depend on investors who give them credit"

Ye Tan is a management consultant with her own company in Shanghai. She thinks the end of the boom is pretty near:

"The business model of these rental companies was never very clear. Every time the customers rent a bike, they pay one yuan, the equivalent of around 12 euro cents. That never covers costs. The companies therefore depend on investors who give them loans. As soon as If this money is not available, they are threatened with bankruptcy. "

The Mobike company, for example, is present on every corner in Shanghai with its orange and white wheels. The management has just disembarked and the company has been sold. To the IT group Meituan. This also shows that the business model was never actually renting bicycles, but collecting mobile phone user data. They were and are the real value.

For many providers, it was about the mobile phone user data of their customers (dpa)

And of course the deposit that you have to pay once. And that many customers do not get back. The companies apologize that they were bought out. The new owners offer vouchers instead.

Rental bikes as the opposite of the sharing economy

Chen Yanyan is the dean of the College of Transportation at the Beijing Technical University. She finds the boom and now the crash of the rental bike companies exemplary.

"The sharing economy, that is, the sharing and swapping of things and services, should be based on private property. So that things are not just standing around, but being used. But these rental bicycles were bought by companies. And now there are half-broken bicycles and bicycle rubbish everywhere no more efficiency, but the opposite of sharing economy. "

Around two and a half million rental bicycles are standing and driving around in Shanghai - for now. Two years ago, at the beginning of the bicycle rental boom, there were still 40 providers, now there are ten left, and city cleaning often has to clear away what remains of their business model.

Here, for example, there are so many rental bicycles on the sidewalk that children and old people have to take to the streets, says this man. And thinks that's dangerous. And the woman next to him says: Some bikes are rarely used and scrapped again. This is really a waste!

A lot of quick money has flowed into the rental bike companies in China from investors. You have bought the cell phone data that users left behind when booking and paying. But apparently no one thought of who would take over the recycling of the many tons of bicycle rubbish. The companies could pull themselves out of the affair. In the worst case, cities will be left with the costs.