Brakes put on three of six bike-sharing companies

Three of the six operators licensed to run dockless bike-sharing operations since last October have failed to take off, as questions swirl over the industry's long-term viability.

Chinese bike-sharing giant ofo's future is now hanging by a thread. It has breached multiple regulatory requirements, and the Land Transport Authority (LTA) has threatened to suspend its licence.

ofo has yet to surrender its licence, but reports have emerged on the closure of its overseas business units. Today Online reported last week that ofo's operations team laid off nine or 10 employees, and owed its creditors at least $700,000.

Meanwhile, GrabCycle has surrendered its sandbox licence to focus on shared electric scooters. Qiqi Zhixiang has yet to deploy any bicycles as of last month, and its app is nowhere to be found online. The remaining three licensed operators in business are Mobike, SG Bike and Anywheel. They operate a combined fleet of 29,000 bicycles - about 70% of the total fleet initially approved by the LTA.

But experts caution that it remains unclear how these remaining companies can find a sustainable business model. They note that the challenges faced by the industry are not just localised, with shared-bike firms worldwide generally operating at massive losses that were previously offset by cash-rich backers.

Singapore University of Social Sciences transport economist Walter Theseira said, "It's the cheap financing drying up. When the tide goes out, you see who's been swimming naked, as they say."

The unwillingness of commuters to pay higher fees for shared bikes is a challenge, said Dr. Elliot Fishman from the Institute For Sensible Transport in Australia. "With all the competition among bike-sharing firms, no commuter wants to pay a lot of money for shared bikes."

Former operators such as oBike and ShareBikeSG have cited regulation as another obstacle here. The LTA has stepped in with its licensing regime to tackle the problem of rampant indiscriminate parking of shared bikes, which were estimated to number more than 100,000 at one point.

LTA requires operators to comply with a set of rules. Those with a full licence have to pay a $30 annual fee and a $30 refundable security deposit per bike.

Smaller players can apply for a sandbox licence, which has a fee of $12 per bike. Mr. R.J. Seet, Strategy Manager of Anywheel, which has a sandbox licence to operate 1,000 bikes, said the new regulations could potentially deter customers, who have to take an additional step to end their ride at a designated parking area.

SG Bike, which has a full licence to operate 3,000 bikes, said it translated into higher operation costs. An LTA spokesman acknowledged operators will incur some costs, but said the new rules are necessary for the 'sustainable and responsible growth' of the industry.

Shared-bike operators are also set to face additional competition, in the form of shared e-scooters. Some companies believe such devices would be more popular than bicycles. That is why Grab has pivoted from bikes to e-scooters, which it said have 'a stronger fit in Singapore due to the humid weather and limited land space'.

Still, local start-ups SG Bike and Anywheel remain optimistic. SG Bike has seen consistent growth in the usage of its bikes in the past few months, according to its Marketing Director Benjamin Oh.

He declined to give specific figures, for competitive reasons. He added that the Government's push for a car-lite society and ongoing infrastructure improvements, such as building more bicycle paths, mean bicycles could become a more popular mode of transport. Anywheel believes that the current supply of shared bicycles does not meet the demand. It thus plans to apply for a full licence and expand its fleet to 10,000.

But Dr. Theseira said the road ahead may not be as smooth as some hope. "Everybody agrees that it might be useful to have some kind of shared short-range transport system, but that is different from the question of whether you can get people to pay for it," he said. "If you can solve the financing problem, then okay, fine. But right now, nobody has cracked that yet."