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Singapore’s bike-sharing race heats up once again: What will it take to pedal to the top?

The Land Transport Authority of Singapore (LTA) has opened its bike-sharing license application cycle again, from July 22 to August 26.

The Land Transport Authority of Singapore (LTA) has opened its bike-sharing license application cycle yet again.

License applications are open every January and July, and this time around it is open from July 22 to August 26.

This means that companies that want to start offering bike-sharing services, and/or existing operators which want to expand their fleets may now submit their applications to LTA.

New firms can apply for a sandbox license to start bike-sharing operations on a small scale of up to 1,000 bicycles in Singapore. LTA needs to assess their operations first before they can further apply to increase their fleet size.

Following this latest cycle of application, will it possibly spark another wave of bike-sharing players in Singapore?

Regardless, it’s time to take stock of the current bike-sharing landscape in Singapore and explore if this model will ever truly take off or if we will see more exits in the future.

Singapore is down to two bike-sharing players

In 2017, Singapore started seeing a bike-sharing boom. Many Chinese firms emerged into the scene, before local players started joining the race.

At its peak, nine bike-sharing companies were operational in Singapore—oBike, ofo, Mobike, SG Bike, GBikes, ShareBikeSG, Baicycle, Anywheel, and Moov Technology—offering a total of more than 200,000 shared bicycles.

However, the bike-sharing landscape quickly got ugly. Since these dockless bike-sharing services exploded onto the streets, indiscriminate parking and vandalism became rampant.

People frequently reported finding pedestrian pathways and HDB void decks obstructed, bike-sharing bicycles badly damaged, and even bicycles being dumped into canals.

It was equally as messy on the operators’ end. Here’s a quick recap on their entry and current status:

  • oBike – Local bike-sharing firm oBike is the pioneering player. It first launched in 2017, and later ceased operations in 2018 due to foreseen “difficulties” in fulfilling the new requirements and guidelines set by LTA. Prior to its closure, it was entangled in a controversy, whereby users’ SGD 49 deposits was “secretly converted” into a SVIP subscription.
  • ofo – Chinese firm ofo joined the race in February 2017, just after a month after local firm oBike. In 2018, users started complaining of unauthorised transactions and it was reportedly facing cashflow issues. In end-2018, ofo mysteriously vacates its Singapore office and allegedly owes vendors over SGD 700,000. LTA finally cancelled ofo’s license in April 2019 after failing to comply orders to remove its bikes despite multiple extensions.
  • Mobike – Beijing-based Mobike launched in Singapore in March 2017, marking the firm’s first overseas expansion. Local firm SG Bike acquired Mobike last year in a SGD 2.54 million takeover deal.
  • SG Bike – Local firm SG Bike launched in August 2017. It initially had a small fleet size of 3,000 bikes, but the Mobike acquisition allowed it to absorb their fleet, capped at 25,000. The increased fleet size made SG Bike the largest bike-sharing operator in Singapore.
  • GBikes – Financial technologies solution firm FinTechSG quietly rolled out GBikes in September 2017. It ceased operations in July 2018 with a hazy financial outlook. It did not receive its SGD 20 million funding, it failed to sell to Grab, and its license was rejected by LTA.
  • ShareBikeSG – ShareBikeSG launched in January 2018. It’s different from the rest of the players because it uses mountain bikes, which is suitable for off-road riding. However, ShareBikeSG was short-lived — it shut down operations in just six months.
  • Baicycle – Backed by Chinese electronics firm Xiaomi, Baicycle launched in October 2017, offering conventional bicycles, e-bikes, and e-scooters. There has been no updates about Baicycle since, but their signature white bicycles can no longer be spotted in Singapore.
  • Anywheel – Local startup Anywheel launched in early 2018. It has recently received approval from LTA to expand its fleet from 10,000 to 15,000 with effect from July.
  • Moov Technology – Moov Technology obtained a sandbox license from LTA in April 2019. It bought over 1,000 bicycles from an ofo warehouse and refurbished them with new branding. In October last year, it attained a license to operate 10,000 bikes. Moov quietly exited the market during the circuit breaker in April and May.
Image Credit: Anywheel via Vulcan Post

In all, Singapore is currently down to only 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.

Singapore’s biggest bike-sharing player remains optimistic

Although 2018 saw the exit of many bike-sharing players, Benjamin Oh, marketing director at SG Bike said in an interview with Vulcan Post that he remains optimistic about the industry.

“Our goal remains the same to work towards (being) the fourth mode of transport in Singapore. We are also looking forward to further expanding our fleet size of bicycles to even better serve our users in the future.”

To attain this goal of becoming a “fourth mode of transport”, Benjamin stresses that operators need to have more bicycles readily available islandwide alongside careful planning and bicycle deployments.

He added that SG Bike often receive requests from users to increase deployment at areas around Singapore, so he feels that there are currently not enough bicycles to go around.

However, the fact that LTA is opening its biannual applications to allow existing operators to increase their fleet size shows that the authorities are spurring healthy competition and allowing the overall bike-sharing market to grow, noted Benjamin.

When asked about SG Bike’s traction thus far, he revealed that COVID-19 has “changed and impacted” their business in many different aspects, ranging from increased costs, operations, consumer riding behaviours, as well as events/partnerships, such as OCBC Cycle 2020 which has been converted into a virtual event.

“Since the start of COVID-19, SG Bike has been constantly increasing manpower and resources to ensure safety for our riders,” said Benjamin.

This would include actively cleaning their bicycles before deployment and while patrolling, and offering hand sanitizers to users as part of their daily hygiene and safety protocols.

Riders are also advised via SG Bike’s app to perform a wipe-down on the high-contact points such as handlebars, bell, basket, seat, and smart lock before their ride.

However, the circuit breaker period was particularly challenging because their operation team could not perform the scheduled maintenance and disinfection processes.

Image Credit: SG Bike via Vulcan Post

This resulted in increased backlogs, as well as affected the serviceability of their bicycles.

Despite the challenges that the pandemic has brought about, Benjamin observed that SG Bike has seen more trips as well as longer usage duration per trip.

There are increasing users using our bicycles as a means of exercise, cycling around their neighbourhoods and parks such as along East Coast Park, Gardens by the Bay, and the Marina Bay area. There (also) exists another group of users that utilise our bicycles as part of their jobs, such as food delivery riders for foodpanda and GrabFood.

– Benjamin Oh, marketing director at SG Bike

Following the PMD ban last year, the firm has been working together with foodpanda to provide their riders with SG Bike bicycles.

As a whole, their bike-sharing services have proven to be useful in transporting people for essential services. This is why SG Bike provided free usage of its bicycles for residents and healthcare workers during the circuit breaker.

Overall, Benjamin has confidence that bicycles will remain a viable commute and transport option during this period.

He describes bicycles as “individual ‘solo’ transport vehicles” which gives riders flexible control over the destination, while “avoiding the crowd” due to its natural social distancing trait.

“We (will) continue to invest and spend our resources to improve our services and bicycles to overall provide our users with the best experience.”

Will there be another bike-sharing boom?

To be honest, it’s quite unlikely. Singapore was once saturated with bike-sharing players, and now we’re down to two—that in itself says quite a lot about the current landscape.

When it comes to the viability of the bike-sharing model, it has never been profitable globally. This is not surprising, considering that their profit margin is thin.

Moreover, the fact that Singapore’s largest bike-sharing player feels that there is a lack of bicycles here is worrying. When users want to rent a bike and can’t find one, they will stop turning to bike-sharing.

On the other side of the spectrum however, if operators own a large fleet of bicycles, it will drive up their costs which will inadvertently increase rental fees. If the consumer isn’t willing to pay, then the model just won’t work out.

At the end of the day, it’s imperative to strike a balance when it comes to rightsizing the fleet.

While the first wave of bike-sharing companies have made some dramatic exits—from bankruptcies to abandoned operations—this may have caused users to lose confidence in bike-sharing.

However, the second wave of bike-sharing companies seem to be coping well and have found a strategy to remain sustainable. They don’t overspend or deploy more bikes than necessary.

Another consideration for operators to stay in the game is that they must ensure their bikes are well-maintained and have enough manpower on hand to relocate improperly parked bicycles.

Thankfully, the regulatory landscape is also favourable with encouraging conditions that enable long-term growth.

As the market for bike-sharing matures, bike-sharing companies could evolve to embrace a business-to-business model, creating partnership and acquisition opportunities.

This is already in the case for more mature markets. Ride-sharing company Lyft in the US, and Didi in China, have acquired bike-sharing companies to broaden their transportation offerings.

China’s bike-sharing market is relatively mature, with Didi acquiring companies. Image credit to 123rf.com.cn.

In China, bike-sharing has been linked to e-payments, food delivery, and location-based advertising.

With these factors in place, the new wave of bike-sharing companies would have a higher chance of success.

There are still challenges that need to be addressed

However, challenges remain to build a successful bike-sharing business model.

Shared bikes still have to be parked at designated areas meaning the offered mobility is not door-to-door. Consumers’ usage rates would depend on the location of these designated areas.

To improve accessibility, a limited number of unused motorcycle parking lots in industrial, commercial and residential areas could be opened up to bicycles.

Bike-sharing companies will also have to operate in denser areas to strike a better balance between supply and demand, to reduce the cost of repositioning bicycles.

Another challenge lies in scaling up. Bike-sharing involves ownership of the asset by the operator, and leasing it out in short pockets of time.

This is no different from the rental of office space or other properties, where increasing asset utilization is key to profitability. Each cluster of operations is also fairly independent.

The cost of damage to bikes is difficult to recoup, given that few charge deposits, probably as a way to build up market acceptance and adoption first, and given consumer aversion after oBike exited the market with these deposits.

While it remains to be seen whether bike-sharing can succeed this time round, the signs that this second wave of companies are aware of the potential challenges and working to address them are promising.

As with personal mobility devices, bicycles in developed cities have become part of urban transportation options, helping to integrate public transportation with the first and last mile commute, and complementing other forms of first- and last-mile travel.