The age of sharing rides using services like Uber and Lyft is booming. So too is the bicycle sharing business as more and more people are taking advantage of services that allow you go biking wherever you need to go without owning a bike. As one bicycle-sharing company in China discovered, however, this is not a gold mine business without serious risks.
Wukong Bikes in China has gone out of business after claiming it has lost 90 percent of its 1,200 bicycles for one reason or another, including theft. If you can’t do that math in your head, that is roughly 1,080 lost bicycles out of 1,200, which left the company with just 120 bicycles to loan to customers. That’s just not good for business.
Unfortunately for Wukong Bikes, they almost had this coming. Most companies in the bike-sharing business place GPS devices on their bikes so they can easily be tracked and found if or when necessary. Wukong Bikes did not add GPS devices to their bicycles, meaning if someone wanted the bike, they could get away with keeping it. The first mistake was not following in the same mold as other bike-sharing platforms in other countries, as described by a BBC report;
But in China, rather than having fixed docking stations, all the firms are app based.
In most cases, bikes are fitted with a GPS chip, allowing users to locate a bike. They pay for the hire with their smartphones and then unlock it – sometimes using a QR code.
After they have finished the journey, customers can leave the bike anywhere.
That has proved problematic at times, with bikes abandoned in remote locations where another rider is unlikely to find it or want it.
There were other reasons for the company going out of business, including making available inferior bikes compared to bigger competitors in the field. Those bikes lacked durability and damaged easily, which poses another legal threat to the company as customers could be liable to file a complaint or pursue legal action if injured due to faulty equipment that was not well-maintained.
[BBC]
