The scheme is here to stay and is demonstrably popular. Cities like London have limited pickup and drop-off sites and the scheme here has overcome this, seemingly with spectacular success. One thing I don't understand is why a state owned operator needs to get in on the act.

GREED.

The Mobikes look more modern but are heavy and horrible to ride.

@gokunming - how about links to the apps? That would be really useful.

What a catastrophe! Recently visited Nanning, Guangxi which also has a bike program. All the bikes are uniform in color (Orange) and there is 1 type of payment method. They are neatly placed in bike racks all over the city. They come in clusters of 20 and they are found at every subway station in groups of 20, 40, and 60 depending on location. There are cameras mounted on either side of the bike racks for safety and supervision. People can easily find the bike racks and use the bikes and return them to conveniently located bike racks in other parts of the city.

Kunming has 3 types of bikes and 3 types of payment. There are very few bike racks so there are no central locations to get a bike if you need them. I live at the edge of the city in a village and there are bikes scattered everywhere. The people here use them, drive them home and park the bike it in front of their door where no one else can use them. They now have their own private bikes that they can use and abuse and when it gets destroyed they just go get another one. The bike sits idle all day until that person (Temporary owner) is ready to use it again. Kunming should learn from the many other cities that use bikes and create a system that serves all. I am sure the companies who operate these bikes will lose a lot of money from this program.

@debaser links were added to the article, you can download the apps from their respective website or by scanning the QR codes on the bikes themselves.

Correction: the Kunming government owned bike system already launched in Chenggong on March 1st. It's a different system with stations owned by this company: www.dingdatech.com

All the smaller companies will get pushed out by greed.. it's the chinese way..

No, but perhaps the smaller. companies will get pushed out by competition..it's the way capitalism works. How is it that only the state is accused of greed?

I've read about a few cities now where the authorities are using local law enforcement to round up bikes that are parked all over pavements or where they're left blocking access or parking spaces etc. As the government scheme was to use parking stations these private companies are being forced out of some places just by laws being applied and enforced.

Parking stations may be the solution to a problem, though it's not a problem that has bothered me so far. Would it be better not to have such laws about where to leave bikes?

news.163.com/17/0215/11/CDAJ3QTJ000187VG.html

You can see the police in this picture - always ready to serve and protect the interests of the big money.

Sunday 12th. March mainland edition of China Daily has an editorial about bike sharing and comments pointedly on the abuse and misuse of the 'cycles, particularly the random depositing of the bikes randomly in public space. I get around a lot on foot and only once have I been irked by having to shift a bike from a pavement. I've spotted a couple damaged and one underwater in the northern stretches of the Panlong. This contrasts with the abuses of car drivers who block footpaths, park on basketball playing areas, gardens, in front of entrances, across zebra crossings and on the corner of road junctions and an individual can't shift an SUV as easily as push bike. And yet despite the much greater inconvenience to everyone involved, including other motor vehicle drivers, I've never read a word of condemnation in the national press, nor seen the government at any level paying much attention to this greater intrusion on public space.

Personally, I like seeing the kids training or just having fun riding one. Always brings a smile to my face. It's sad to see any bike defaced, but I'm sure these multihundredsofmillion and multibillion companies will be alright.

Totally agree with nnoble

@lemon lover: ditto to you and to nnoble.

Yes @nnoble! Think of the social costs that are externalized by cars. The rental bikes annoy me because they do tend to get strewn about and they are too small for me to ride comfortably...But nothing compared to the annoyance, danger and health impacts of cars.

I seem to see quite few people, including kids, using the various systems, so in that regard, assuming it's economically sustainable, I personally think it's a great idea, with tremendous social value.

As for the very valid issues raised above, the system will have some growing pains as the operators and the cities learn to coexist with this new emerging social and business model.

I wonder how many people who have commented here have actually used this program here in Kunming.

Bikes used in other provinces or in other countries is NOT the same as here in Kunming.

Since the bikes are scattered everywhere and people are hiding the bikes so they can have sole use of it - how can any person find a bike to use. Unless one is willing to walk long distances and has already paid to be able to use all 3 types of bikes - this program is absolutely useless.

I caught a slumdog hiding a bike in my garden 2 days ago. I see plenty of bikes all over the city so there are plenty to choose from but hundreds of the bikes are intentioanlly hidden after use so they can be used at the doorstep the following day.

In my Resd Qtr I saw 3 bikes totally destroyed - 1 had a flat, other had rear wheel missing and other had handle bars bent. How does anyone bend handle bars unless it is done intentionally. This is just 2 months after the program has begun.

The bikes need to be put in a bike rack where they are easily accessible to all as is in many other civilized cities here in China like Gansu and Guangxi. I am sure there are others.

I agree. I do like seeing children using them so they can or enjoy themselves but there should be put on a rack after use to allow ohters to use. I have seen many people in my complex take the bike to their apartments WTF!

Seems this business model needs some rethinking: "Shanghai Puts Brakes on Shared Bikes"

www.caixinglobal.com/2017-03-16/101066418.html

No doubt this can become a problem, but it's not too hard to see a solution, part of which should be a set of regulations to stop more private cars, which take up a lot more room and cause a lot more environmental and other damage, being put on the road. However, such a move would likely reduce the rate at which wealth is concentrated nearer the top of society, so it would be quite a political battle to carry it out, and political battles tend to be restricted to certain...(you fill in the rest).

I think the bikesharing idea is brilliant. And it works with the to expected hiccups rather well.

Sure there are some idiots using the bikes for spare parts and vandalize 'em but for a country and its people who are used to not care for the environment or about thy neighbor, it works really well.

I am often in the North of town and there are always mobikes available, plus you can spot them through their GPS system.

I also saw how they have been sunk in the river and mistreated or misplaced, but I see an increase of care about the bikes.

I see people intentionally putting them in places, easy to spot for others.

I think they are brilliant options for short distance transportation.

The size and physical features of the bikes should be adjustable, seats and handlebars for example.

On the other hand, if I plan a trip over 3 kilometers,

I wouldn't chose bikesharing,anyways.

I usually take them to my Walmart trips or to downtown and they are great for that.

The car thing, as a veteran car mechanic I think people complaining about cars are silly.
The car is a fantastic transportation method and much cleaner than people care to admit.

When I was in school we learned that cars have an efficiency quotient of 60% by 1989.
By today's standards I would assume it is in the 80% or even more.

Most air pollution didn't come from cars, but from production of electricity.
Water pollution from heavy industry, for example making batteries.

And we all know what the Fukushima power plant was for.

It's our customer demands, deciding if we buy a Smart 4/4 or a hybrid micro mobile, or the new flashy cheaper by a few hundred bucks heavy FORD F150 truck.

Some people jump on electric cars like they are Jesus reborn.

These cars are not clean at all, and never will be.
Unless you use your treadmill to recharge batteries out of cow dung.

I have a car, because I live in Dali and we need one, for short hauls we use the scooter, or the bicycle. Our monthly carbo-emissions are lower than our fellow city people.
So, I don't feel bad nor do I have to.

There is Uber, carsharing and many other options to use a car more ecologically.

Or use bike sharing, it isn't perfect but it gets you from A to B cheap with little to no effort and without investing in transportation or fear the theft of you bike.And it's fun.

I give it thumbs up and I also like to see tourists have a great time with these bikes.

Maybe these companies could add different options, like touring bikes for higher deposits or fees, and other upscale options such as frequent flyer miles.

@Alien
The problem is not just social but also transportation itself.

It would be hard to imagine to see an important surgeon getting ready for brain surgery hauled in by bicycle.

The cars need to be smaller and hybrids, or hydrogen run.

Carsharing apps and carbo footprint rewards could be an incentive. Also accident free riding, traffic assistance points for good drivers. There are plenty of ways to get cars to more use, but it's not the transportation but the people, riding 'em.

No difference if it's a bike, car, plane or boat.

What did I see today?

Saw 2 OFO workers wearing yellow vests with letters OFO on the back repairing over a dozen bikes in a street corner near my house.

Saw 2 OFO bikes chained near the rear entrance of Wicker basket. Apparantly they are now OWNED by 2 workers there.

I predict that OFO will be out of business in 3 months. Once a person gets the combination to a bike, it becomes private property and the company can no longer get any revenue from that bike.

Kids are smart and have time and they knnow that people seldom turn the dial of the combination or they just turn the 2 center dials. Within a few minutes of fiddling with a lock anyone can usually get the combination at which time the bike becomes private property. This is why most of the bikes I see kids riding are the yellow OFO bikes.

With no GPS there is no way to track these bikes - Hehe!

Can someone please tell me the meaning of OFO?

ofo hasn't any meaning, they use it as the company's name because the three letters combination looks like a bicycle, the two oes stand for wheels, the f stands for the middle part of a bicycle.

Online Fuse Offline - news.duote.com/51/151519.html

people predicting the fast bankrupt of these companies are probably underestimating the power of advertising..plenty of phone numbers and weixin account collected,ready to forward to the best buyer, isn't that similar to how Facebook makes money finally?

Ofo isn't going out of biz in 3 months. It's backed by didi, which at last check was worth over 30 billion USD.

these schemes all seemed like a good idea butthe combination of having the bike lanes full of school kids swerving about carelessly, ebikes going waaaay too fast and the slow moving shoppers makes it much harder and slower to get anywhere by bicycle these days. They clearly need to limit the amounts of new bikes being added and maybe some training or guidelines for the children and idiots who should never be on a bike or ebike in the first place. The situation was bad enough when I only needed to avoid the crazy ebike riders - at least they're more predictable and slower to manoeuvre! As someone above implied, many of these 'issues' should be solved with time... let's hope so.

oh.. I've also noticed recently that locking bike racks are being installed on the streets. I'd guess that they hold 10 to 15 bikes each. The initial article mentioned 45,000 bikes so they'll be needing a lot more of them.

debaser, how are you traveling when you find the ebike and bicycle riders are causing you so much trouble?

Didi are unlikely to go broke anytime soon, but even if OFO is owned by Didi, if it is running at a loss, Didi will offload it very quickly. Once the business case is established, or not, people will either re-invest or divest.

The OFO bikes are cheap, have a manual lock, no GPS, I assume no app except for payment. These are the bikes mostly seen ridden by kids, who often are riding a misappropriated machine. It looks like the OFO business model is lowest cost, and accept the losses of assets.
The MOBIKEs have remote locking, and GPS tracking. The bikes were custom built and were expensive to have made, but the app helps to find the nearest bike, and you can reserve them, to save you walking to a bike which in the meantime is hired by someone else. The MOBIKE business model seems to be larger upfront costs, but better service, and traceability of the assets.

I am not sure if the OFO business case is sustainable, only time will tell.

Cities are developing strategies to manage this new industry. politicsfromtheprovinces.blogspot.hk/[...] And this morning I heard the business relies, not on the small fee payments, but on the deposits. Cycle use is now even free at certain times of the day thereby encouraging more deposits. The guarantee of a perpetual flow of hundreds of thousands of deposits in cities all over China means money can be invested. Up here in the north things are, if anything, becoming even more orderly. In the article linked above, abuse and misuse could be recorded in the new 'social credit system'. Demand appears to be high and users from across the social spectrum.

ofo clearly don't care that much about the bikes being stolen or destroyed. They probably get the bikes for cheap, perhaps 150-200 per bike, perhaps less. As nnoble says, the deposits of many thousand people add up to huge sums of money, which if correctly invested, can more than make up for most of the bikes being stolen and destroyed, which they will be eventually. It's not exactly a business model I agree with, but it is economically feasible.

The deposits should be invested but that much cash is tempting. Chinese companies tend to grow debt so holding cash deposits is mot in the plan. Deposits are a liability, if refundable, in this case aka debt.

Cash will be gone when the bikes are gone.

I would guess that a proportion of the money is being invested. Invested in setting up (dumping lots of bikes on the streets) in new cities to attract more deposits. If that is the case, there are parallels with Ponzi schemes.

deposit of 99 yuan.. deposit is automatically returned upon each completed payment.

All the 99 yuan deposits can NOT make up for what I saw today during my 40 minute bus ride.

3 bikes which had the seat completely removed and 1 bike that had the from wheel removed.

Cost of repairs and cost of sending workers to do the repairs - Haha!

Yesterday there were 4 bikes (the yellow ones) parked and a kid was trying to unlock the combination lock. I guess some have been successful at it. Anything to not have to pay. The concept of it it is really a good idea but too bad too many abuse it. There's always people trying to abuse the system.

The only bikes I see being abused are the yellow ofo bikes because of the present system in place. It will not last much longer.

I saw one of those yellow OFO bikes sprayed red on my way home. It was a really messy paint job too. 2 students riding on it.

society.yunnan.cn/html/2017-04/05/content_4780009.htm

You will not see a graveyard of the other bikes - only the yellow ofo bikes.

Could be worse. Check out photos of "10,000" damaged ofo bikes stretching for 3 kilometers in Beijing:
china.huanqiu.com/photo/2017-04/2866723.html?from=bdtp#p=1

Typical that they came across a bike graveyard on tomb sweeping duty themselves.

Indeed it looks at first glance that the OFO bikes are suffering more than the others. The build quality is surely less than MoBike. I regularly come across a MoBike team collecting bikes and depositing them at metro exits. Never so an OFO team. Broken bikes will stand for days along the road sides.
Often I am amazed about the amount of damage done to these OFO bikes. Not only the locks are removed but there are quite some bikes with the tires removed and the tubes cut. Some bikes have their pedals removed. For both acts you will need tools. Common as well is the scratching away of the QR codes. Maybe they are sabotaged by the other companies ???

Seem to be bugs in this bike process, as well as a certain lack of social conscience, which doesn't entirely surprise me.

Thas some fairly easy Chinese there (in Campos link and photo) that explains why the bikes are piled there.

这到底是怎么一回事？对此,记者联系了OFO共享单车的相关负责人王先生。"这个是我们的维修点,共享单车受损严重,我们把归拢回来的受损车辆集中起来给运维人员维修,修好了我们再投入使用.

With a mere two amount of effort that should be possible to uncode. Whether its true, is of course another story.

two year amount

@Peter: hope it's true, as if that's the problem it shouldn't be too hard to deal with. The public bike-rental process is a good idea and I'm sure it can be made to work better.
Would like to see some statistics as to the number of private cars on the road now, in comparison to the number before the bike scheme, although my guess is that this statistic is simply not available.

Well A, the fact that the scrap metal collectors havent swarmed there yet, inicates something. Unless the scrap metal is waiting for highest bid, which could be a possibility as well. Or maybe they just dont know what to do with the broken bikes, and management has run away, the repairing money is waiting for someones approval, theres a bill nobody pays, the secretary is pregnant and that stuff. Usually in China you dont throw away metal like that, all has some value. Even paper.

Doesn't look to me that the bikes have been scrapped.

@ Peter, people have been jailed for handling stolen rental bikes, there was a news story on local TV a couple of weeks back, and I think people were jailed in 3 separate cases. I think in two cases it was 15 days, I think the cops are targeting this, as the whole bike thing is a government initiative.

There are also grass roots volunteer groups liberating stolen bikes, and reporting stolen bikes. I think people trying would get reported, unusual for china as that is.
These bikes are probably too highly visible and recognizable to just chuck on the back of a sanlun che, and ride them through a scrap metal dealer's gates.

If ofo can throw away thousands of bikes and leave them destroyed on many city streets across China, then it must be getting (Stealing) money from somewhere.

It is impossible to run an UNsustainable business model such as this across so many cities.

Even the manufacturer of the ofo bikes should be happy to get those bikes back and repair them and then sell them back to ofo.

These bikes are littering the city streets and the city should FINE ofo for littering.

@Tiger

Banks, police, ferraris, eggs, rice and whatnot can and are faked, meanwhile people smuggling truckloads of drugs over a Yunnan border, and here we have Tiger saying the bikes would be too highly visible to bring through a scrap metal dealers gates.

Tiger must be boiling and slurping that city water also.

hey pertertroll, so whats your reasononing why scrap metal men are not at it then... maybe you been at the tap water

Daz, just saying it sure must be easier to get those bikes at backyard of mr. scrapguy house, compared to smuggling drugs or faking, say, an orchid flower, even a mushroom. And both of those take place plenty. Mr. scrapman probably has a special carpet for his sanlunche, or a larger aluminium plate for a special use. Maybe a bucket of paint and a metal saw hanging on the front handle. Anyway, me got no clue if Scrapman is out to collect them bikes, just said if he wants to get them through his gate it sure must be as easy as making duck slices look like mutton. Point was anyway scrapman had not picked up those bikes on Campos link, the chinese text says they are broken and are waiting to be fixed.

Anyway, question is reasonable. Maybe theres some guard in some corner of that area, the photo only shows a small angle of the area. Most likely there is, since a good deal of those bikes look fairly okay, and furthermore, the text says that they are there waiting to be brought for repair. Whether scrapman has any interest in the bikes, overall, is another question. Like Tiger said, law might be preventing him, he's probably been warned to keep his fingers in control. Maybe Tiger had some point afterall. But for scrapman with all his wits and knowledge, to get a bike on his backyard cant be much of a task. Would be a routine round. Who knows, maybe he got some bikes too, under the plastic collection. Sorry Tiger, maybe its coca cola afterall.

A pretty good Caixin article on bike share business:

www.caixinglobal.com/2017-04-11/101077060.html

www.theguardian.com/[...]

Bluegogo has gonegone.. It looks like ofo are flooding the streets with the cheapest of bikes, and Mobike looks like it has been forced to invest in cheaper machines. Now the questions are, can Mobike survive the swamping of the market by ofo? And can ofo's disposable bike policy be sustained?

disposable bikes ... really? yikes!

Now that Bluegogo has gone Byebye, we can get an idea of who made money, and how, providing shared bikes. The unknown is the actual cost of the bikes, A Bloomberg article puts the Bluegogo cost at $400 USD (¥2640) each which I doubt. Mobike says their cost per bike is ¥1000 and other companies say between ¥300 to ¥600 per bike.

Using an exchange rate of 6.6 yuan/1 USD, here is Blugogo's take:

Investors poured in $58.1 Million USD.

20 Million riders forked up deposits, at an estimated ¥99 Yuan each, totaling a cool $300 Million USD.

Cost of 600,000 bikes varies:
Each ¥400 is $36.6 Million USD
Each ¥600 is $54.6 Million USD
Each ¥1000 is $91.2 Million USD
Each ¥2640 is $240.0 Million USD

Net cash flow to the PROMOTERS before salaries, rents and operating expenses
(Investors + Deposit less cost of bikes):

Bike cost each ¥400 is $321.5 Million USD
Bike cost each ¥600 is $303.5 Million USD
Bike cost each ¥1000 is $266.9 Million USD
Bike cost each ¥2640 is $118.1 Million USD

My guess is a bike cost of about ¥600 before kickbacks and over invoicing which leaves more than $200 Million USD for the PROMOTORS. Along the way a bank or two might have made working capital loans and a few nice cars were bought. To lower exposure some stock buybacks from selected investors might have been made. The secrets are all in the books of Bluegogo if they can be found or reconstructed. If I was still teaching Accounting I would use Bluegogo as a teaching tool.

Moral: In China forget profits, look at cash flows, big front money and promotor benefits for quick bankruptcy. Slam Bam, thank you mam, badabing, badabam and Adios!

In University Town, there are share bike systems operated by Kunming City & also by Chenggong District.

@GoKunming

300 meters, not 3km of damaged bikes:

china.huanqiu.com/photo/2017-04/2866723.html?from=bdtp#p=1

Btw, two of the wealthiest CEOs in China have already invested in these companies. Alibaba is one of the lead investors in Ofo, while Tencent in Mobike. They are here to stay.

Years before these startups began, UBikes were proven to be a success in Taipei. These Chinese counterparts reversed engineered them into dockless shared bikes, which IMO are much more convenient for riders, albeit "tragedy of the commons" in the mainland ensued as expected.

The figures quoted from Bloomberg above are incorrect. Whichever source Bloomberg used, did obviously not sanity check. I watched an interview with the CEO of Mobike a while back, and I am pretty sure he said the cost of the bikes was CNY 1000, not USD 1000.
If you apply the same correction to the other figures, then Bluegogo would be CNY400 CNY, which seems about right; as three years ago I bought my daughter a cheap bike for CNY400 retail. Consider direct from manufacturer prices. As Ofo seem to be even lower quality, then CNY 300 would not surprise me.

Factor in these adjusted prices to business case calculations, and it all makes more sense.

@GoKunming

Kunming's very own infamous bike graveyard of yellow, orange, and blue is piling up conspicuously above the walls of the vast empty lot just North of 空间俊园 building on Wuyi Road... just a short 300 meters walk North of Shuncheng Plaza 顺城购物中心.

It's a sad sight to see worthy of further investigating/reporting if one fancy.

GPS location: map.baidu.com/[...]

The map location is for the 空间俊园 building, not the bike graveyard just north of it.

I see a new player on the block. Hellobike, these are blue and white.

Amazing to see how from the beginning of 2018, Yonganxing basically disappeared and Alipay took over the lead with its blue and white bicycles...
I'd like to see some battery assisted ones, as I found once in Chengdu. Still no sign of them here.

I don't understand the economics of just junking so many bikes.

Alipay's blue & white Hellobikes are free for an entire month for Alipay users with goodstanding credits, hence their meteoric popularity. They too are being dumped on the aforementioned mountain of bikes. Chengguan is punishing the shared bike companies for the collective negligence of the masses.

The economics of junking bikes is a short to medium term gamble..If you are early to the market and can kill competition (like Bluegogo died), you can dominate a market. If you can create a near monopoly and increase the total revenue to more than make up for the initial loss of assets.

The gamble works best when only one player adopts this strategy. Flies in the ointment include:

1. Regulations and fines for dumping.
2. Late entrants taking advantage of your attempts to clear the field, at no cost to themselves. This also negates the advantage you gained at a cost.
3. Late entrants in a strong financial position, when your cash has been depleted.
4. You run out of cash yourself (as happened to Bluegogo).
5. Public perceptions. If your bikes are seen a a pile of junk, they will get treated as such. Personally, I would be much more likely to carelessly discard an Ofo than I would a Mobike. For some users the perception of how cool a bike is, many lead some people away from services that are seen as less cool.

The Alipay strategy is very clever. Free bike for a month gets people used to using your service and are more likely to stay with you. It also gets around the problem of people's resistance to downloading another APP offering the same service as one you already have. It also attracts new users who may not have bothered with public hire bikes before.

taxi drivers (ebike/motorbike/licensed/Didi) seem to hate the competition from these bikes and have been known to 'move' them or otherwise make them unusable. I've witnessed some shop owners moving the bikes from near their store front. I've also seen several local xiaoqu guards and city management officers piling them up recently. There were always quite a few within eyesight of my apartment but not any more... I now need to walk around to find one which negates the whole idea in my opinion. At least one of these companies have to fold soon.

@tigertiger

In addition, Alipay Hellobikes do not require a deposit, unlike the 199rmb deposit for Ofo and 299 for Mobike, Hellobike riders have an option of paying 5 rmb for unlimited rides for a month.

That explains the sudden uptake.of the service.. I have seen a lot of Hellobike riders already.

You may have noticed another turquoise colored bikes that entered the bike-sharing market. These deposit-free bikes are called "Qingju," and is launched by Didi Chuxing car hailing app (450 million registered users with 20 million car hailing orders a day).

Didi, who was also Ofo's largest 25% stakeholder, will integrate with money-stricken Bluegogo, among others smaller bike-sharing service platforms. Their spinoff turquoise Qingju bikes (one month free) are here to compete with Tencent backed Mobike, which just announced the refund all deposits back to riders. That's 1 billion rmb (US$150 million worth of deposits. Fyi, Meituan's (food delivery app) acquired Mobike not long ago for US$2.7 billion.

Btw, the aforementioned bike graveyard has been cleared.

The deposit-free standard of this industry will thwart market entries by new players w/ smaller balance sheets.

graveyard cleared - where are the bikes? Melted down in an unnecessary, polluting industrial operation?

Most likely in the same unnecessary, polluting industrial operation that old smartphones, laptops, and pads go. So for the sake of the planet, I hope you are still using your first smart phone and laptop otherwise you've doomed us all.

The concept 'repairing' is a good one.

Is it possible to hire shoes? I prefer walking..

you can recycle old car tyres for sandals, then retread you way home