The bike-sharing industry has gone from a start-up pitch to mainstream take-up to its first failure in little under a year, led by Chinese companies that have sought to quickly dominate the market with a deluge of cheap bicycles.
In 2017, Chinese companies such as ofo and Mobike have expanded rapidly in Europe and the US, backed, respectively, by the deep pockets of tech giants Alibaba and Tencent. But questions exist about whether this is a long-term shift in ownership model or a fad that is only sustainable in the busiest of city centres.
“It is difficult to see how the companies will become very profitable,” says Mark Tluszcz, chief executive of Mangrove Capital Partners, the venture capital group. “The idea that bike ownership models will change is a very long-term hypothesis.”