31 oct 18

Channelling and rightsizing: Singapore bike-sharing

The Singapore Land Transport Authority (LTA) had a close look at bike-sharing and came up, in the purest of Singapore’s regulatory habits, with a playbook for bike-sharing suppliers. It goes without saying that the suppliers are not entirely happy to see their businesses and opportunities limited by the Government. At the same time, it’s necessary to give bike-sharing the correct space in the entire transportation scheme and an uncontrolled supply chain for last-mile transit might do more harm than good.

The rules

Singapore has decided to grant a maximum number of bikes to each supplier. The suppliers will have to apply for this number and are not allowed to exceed it. Established suppliers can license as much as 25,000 units, whilst new suppliers can request a “sandbox license”, sort of a try-out license, for 1000 bikes.

They also have to install a QR code based geo-fencing solutions on each bike and remove users who don’t respect the bike parking rules from their platform. These users will also, it is Singapore after all, be fined if they don’t follow the rules.

Impact on pricing

Suppliers will also have to pay SGD 60 for each bike in their fleets, which has caused a bit of a bitter taste for the supply chain. It’s a know fact that bike sharing is not a hugely profitable business in isolation and the additional charge is not only tough on the P&L, but has also impact on the entire pricing model.

Some suppliers have decided to raise the user fee; Ofo, only a few months after its launch in Singapore has done so. Others, such as Mobike, are launching corporate bike sharing in Singapore and are looking for advertisers to rent out ad space on the bicycles.

All in all, the limitations of the number of bikes plus de license fee plus the additional operational responsibilities to track and trace bikes, turn bike sharing in Singapore, at least on short term, into a less profitable business, but could, in the long run, safe the service, keep both users and regulators happy and make competition more transparent.

Singapore bike sharing companies

  • OFO: full license, applied for 80,000 units, was allocated 25,000 units and has, after the regulation changes, reviewed its volume to 10,000
  • Mobike: full license, 25,000 bikes
  • SG Bike: full license of 3000 bikes, which is an additional 800 in comparison with its current fleet of 2200 bikes
  • Anywheel: applied for 50,000 bikes but was only allocated a sandbox license for 1000 units. They already purchased much more bikes, which are now stored in a warehouse or shipped to other countries
  • GrabCycle: the Grab branch has been allowed a sandbox license of 1000 units
  • Qiqi Zhixiang: also a sandbox license of 1000 units
Authored by: Yves Helven