The battle isn’t over car sharing. It’s not over bus sharing, either, though that, too, is a growing focus for investors and automotive companies that are..
While Uber’s woes take center stage in the U. S., a different on-demand battle that’s been playing out in China is coming to the states.
The battle isn’t over car sharing. It’s not over bus sharing, either, though that, too, is a growing focus for investors and automotive companies that are desperate to understand how cities and transportation are changing. This clash is over the latest wrinkle in urban bike-sharing – dockless bike sharing. And it has founders and VCs around the globe seeing dollar signs, while regulators are wrestling – again — with how to ensure they’re not victims of a trend that seemed to emerge nearly overnight.
“Dockless bike sharing is something that people worry about until they realize it’s a benefit” to society, says Atomico cofounder Mattias Ljungman, who calls the ability to leave one’s bicycle where a trip ends “the real revolution here.” Docking stations are “very complicated,” he says. “Not only do riders need to know where to park their bikes, but sometimes the stations are full. It’s a pain.”
Atomico has already placed a big bet on Ofo , a Beijing-based dockless bike-share company that has so far raised roughly $580 million from VCs at a post-money valuation of north of $1 billion. China-based investors are looking to pour even more into the three-year-old company given its current momentum, suggests Ljungman, citing the more than one million connected bikes it has already placed on city streets in China, and customers who are taking an astonishing 10 million rides per day, compared with the roughly 10 million rides per year that London’s public bike-sharing service powers.
The story is much the same for 16-month-old, Shanghai-based Mobike , which also claims to have more than a million bikes in its fleet and has raised $410 million from investors at a valuation that the WSJ reports is north of $1 billion.
Another Beijing-based bike-share company, Bluegogo , is drafting behind both. Founded a mere six months ago, it has already raised at least $65 million from investors.
Still, China is not the U. S; it remains to be seen if a variation of the model will work here. “Just as China will tell you that things that work in the rest of the world won’t work in China because of its 5,000-year-long cultural history, things in China don’t necessarily work [in the U. S.] either,” says Sean O’Sullivan, the founder and managing director of the venture firm SOSV .
Friend or foe
O’Sullivan has been watching dockless bike sharing as closely as anyone. Like a growing number of VCs, he has a horse in this race: New York-based Social Bicycles , or SoBi, which says it was first in producing a dockless bike that features a trackable GPS system and an integrated lock that allows it to be parked at any bike rack in a city.
SoBi founder Ryan Rzepecki launched company in 2011 after serving two years as a project manager at the New York Department of Transportation. There, he says, he was witness to the city’s negotiations with Motivate , parent company of Citi Bike, which has become the largest bike-share program in the U. S. It was a years-long planning process that Rzepecki says gave him “great appreciation for how cities work and the things that concern them.”
Among them were “ensuring the bikes would be inspected and maintained, that their docking stations would be kept clean, that bikes would be evenly distributed throughout the city, and that there was data sharing,” says Rzepecki’s then-boss, former New York DOT Commissioner Janette Sadik-Khan, who now advises mayors on urban planning.
