The two-wheeled future of mobility: Dockless bike-sharing systems and a new ‘bike boom’ towards more sustainable transport

Author: Julian Glenesk, Research assistant, RAND Europe

There is an ever increasing importance being placed on sustainable transport among urban planners and governments alike

The primary motivation behind the push for more sustainable transport is to mitigate externalities associated with private car use and urban sprawl, of which there are many. These negative societal impacts include traffic congestion, road incidents, air pollution, noise pollution, climate change, soil and water pollution, increased costs to provide municipal services, and energy dependency. Norway is among the most ambitious governments regarding sustainable transportation, boasting a zero-growth objective for car traffic in urban areas among its suite of transport goals.

A leading paradigm in achieving more sustainable transportation is the ‘Avoid-Shift-Improve (A-S-I)’ approach

‘Avoid/Reduce’ aims to reduce the need to travel, ‘Shift/Maintain’ aims to encourage a switch towards more sustainable transport modes (e.g. cycling or public transport), and ‘Improve’ aims to increase the efficiency of all transport modes and vehicles. While all three steps are linked, they are presented in sequential order of efficiency as there is a (largely) linear impact from the first step to the last.

Avoid/Reduce aims to improve the efficiency of both the transport system and land-use planning to minimize the need to travel. Since transport is a derived demand, meaning that the demand for travel is merely a by-product and requirement for something else, it is efficient to ensure that citizens can reach the destinations important to them with the lowest intensity of travel. This concept is called accessibility and is concerned with the number of destinations or ‘opportunities’ one can access within a certain range.

This stands in contrast to ‘mobility’, which is the extent of that range. For example, a city-dwelling 13 year-old will not have nearly as much mobility as a suburban adult with a car, but if the 13 year-old has access to four grocery stores within a five minute walk of their home while the car driving adult has four grocery stores within a five minute drive, they both have the same accessibility to grocery stores. Examples of Avoid/Reduce strategies include densification of cities to reduce necessary distance travelled while telecommuting is an example of avoiding trips altogether.

Referring back to Norway, while densifying rural areas and promoting telecommuting aren’t too feasible, they are aiming to reduce the distance and travel time of bicycle travel by investing over £700m in building a bicycle highway network. This investment overlaps both the Avoid/Reduce and Shift/Maintain concepts, as a reduction in travel distance acts as encouragement for a mode shift to cycling. Perhaps the best example of an explicit modal shift strategy towards cycling is Copenhagen, which has built a cycling culture through deliberate investment and prioritisation of cycling improvement since the 1970s and now 50% of the city commutes by bicycle.

Technology improvements from the ‘Improve’ step, such as electric bicycles and bicycle sharing, can also encourage modal shift, the latter of which we will explore in greater detail as it has thrived in the digital connectivity boom of the last decade. Perhaps ironically, as new technology emerges, mature technologies can become more attractive.

The modern bicycle has remained largely unchanged since the introduction of the ‘safety bicycle’ in the 1880s. The same mechanical design has been ever-present since. While popularity of the bicycle has waned and boomed over the years, improved information technology paired with a concerted effort to promote cycling in the last 15 years has spawned a model for bike-sharing systems that has been adopted around the world. Santander cycles in London, colloquially known as ‘Boris bikes’ are an early and largely successful example of this publically funded bike-share model. In 2016, Santander Cycles recorded 10.3 million journeys with £10 million of its £25 million operating cost covered by public funds.

Other cities have been less successful, such as Seattle who closed its bike-share scheme last year with reasons ranging from weather, topography, and a mandatory helmet law. Spain has similarly axed half of its 130 bike-share systems throughout the country. These mixed results have ushered in a new wave of innovation, akin to how Uber and Lyft have redefined traditional taxi services.

A new Chinese Revolution is underway – in the form of dockless bike-share

Dockless bike-share adopts the Internet of things paradigm by abandoning the fixed docking stations common in publically supported systems. Instead of fixed stations scattered about the city, each can be ridden and parked (with self-locking mechanisms) anywhere the user pleases. This is made possible because each bicycle in a dockless system has a GPS tracker fixed to it and users can see the map of available bicycles through a mobile phone app. The benefits of a dockless system compared to a docked system are two-fold. The provider benefit of a dockless system is the elimination of fixed infrastructure, which would need to be negotiated with individual cities in order to secure designated road space. Additionally, there is less need for redistribution of bicycles to ensure that docks are neither full nor empty. These huge cost savings have brought the emergence of a private sector dockless bike-share industry, made possible by the prevalence of smartphones throughout society and inexpensive GPS tracking systems.

China has a long history of cycling stemming from Mao Zedong’s Communist Revolution in which the bicycle was the approved form of transportation, resulting in the production of 500 million Flying Pigeon PA-02 model bicycles since 1950, a positively embraced national symbol today. In recent years, the Flying Pigeon factories have been soaring once again as they are producing nearly 1 million bikes per month, with half of those coming from private dockless bike-share companies. The explosion in popularity of bike-sharing in China cannot be overstated. According to the 41st China Statistical Report on Internet Development, there were 221 million users in China by the end of 2017, which represents a near doubling from 115 million users just six months prior. In Beijing alone there are 2.35 million shared bicycles from 15 different companies, leading to local authorities placing restrictions and guidelines on both existing and new players. Shanghai has similarly experienced a huge boom in bike-share, growing from 450,000 shared-bikes to 1.5 million between February and August of 2017.

The transport impacts of the dockless bike-share boom are already being noticed in China

Effects are expected to be more pronounced as new data better captures the effects of the recent surge in bike-share popularity. Reuters reports that the growth in bike-share is so fast that analysts and relevant data can’t keep up with the exponential growth in the industry. A survey of 100,000 Mobike users from 36 cities throughout the country reported that they cut their car trips in half. The Chinese Ministry of Transport expects car use and gasoline demand to plateau by 2025, largely as a result of the bike-share boom. It is estimated that 7 trillion tonnes of carbon emissions have been avoided while 30,000 jobs in the bike-share industry have been created. China’s Ministry of Transport estimates that bike share has directly reduced the costs of congestion in the country by 16.1 billion Yuan (£1.81 billion), with an additional 200 billion Yuan (£22.5 billion) in other social and health benefits.

The popularity of bike-share is in part due to it as a good solution to the ‘last-mile’ problem of transport, which refers to the leg of the journey accessing the main mode of transport such as walking or taking a taxi to the nearest train station. More generally the prevalence of inexpensive shared bikes has greatly increased the mobility of Chinese who do not own (or want to own) their own bicycle.

There is ruthless competition for dominance in the industry

The race to global supremacy between Ofo and Mobike, with over 20 million bicycles across 200 cities in 20 countries and $2 billion in private money backing between them will prove to shape the future of the dockless bike-share boom. Concerns remain over the long-term profitability of the system as neither of the two heavyweights representing 90% of the global market have turned a profit. They jockey amongst dozens of other competitors (55 companies remaining and another 22 already defunct) with aggressive pricing of 1 Yuan (£0.11) per 30 minute ride to fight for market share. Both companies plan to drastically expand in the UK, with Ofo aiming to have 150,000 bikes across London compared to the 1,250 in operation and 12,000 Santander cycles currently in operation.

Issues remain with dockless bike-share, but they are not stopping the momentum of the industry

Numerous start-ups have failed largely as a result of vandalism and theft of dockless shared bicycles. The resultant dumping of discarded bicycles along with errantly parked bikes such as in footpaths and private driveways has brought negative reactions among citizens. Images of bicycle graveyards storing massive piles of broken bicycles continue to make headlines as a sign of both wastefulness and implausibility of dockless bike-share systems. Nevertheless, the industry is growing and expanding globally at a ludicrous rate and is primed to shake up the face of transport around the world like it is doing in China, all possible thanks to the billions of smartphones in people’s pockets.