China’s dockless bike-sharing companies are being forced by urban authorities to take desperate measures to clean up cities littered by bicycles, with 45,000 of bikes in Hangzhou lying “dormant” in a rented area of the city to get them off the streets.
The authorities of Hangzhou in east China’s Zhejiang Province have told ofo, Mobike and other bike-sharing companies to take 80,000 bikes off the streets by the end of this month.
The move came after a bike-sharing boom spread across China in 2016, with an estimated 18 million bicycles flooding cities nationwide.
According to Xinhua, Hangzhou has been particularly affected by surplus bikes littering pavements and roads. Ten companies operated more than 882,000 bikes in the city when numbers hit a peak last year, but research has suggested the city only needs between 320,000 and 460,000 at any one time.
45,000 ofo bikes removed from Hangzhou’s streets sit idle in the middle of the city.
After 110,000 bicycles were taken off the city’s streets by the end of 2017, companies have been struggling to meet the next target of removing 80,000 two-wheelers by the end of May.
According to The Paper, Hellobike is the only company that has been allowed to transfer its bikes out of the city.
That means giants like ofo and Mobike have been left in limbo, with tens of thousands of their bikes stranded in Hangzhou.
According to a report by Qianjiang Evening News, Alibaba-backed ofo has been forced to rent seven storage spaces across Hangzhou to take its bikes off the streets.
The rented spaces, which include old car parks, demolished building sites and warehouses, are big enough to store more than 100,000 bicycles. The biggest space is already full with 45,000 unused bikes, covering 8,000 square meters.
To put that into context, that’s an area larger than the White House, containing 15 times the amount of dockless shared bikes in the whole of London.
Talking to Qianjiang Evening News, the ofo head of operations in charge of that part of Hangzhou said many of the bikes were damaged, while the others would remain idle until new urban projects outside of Hangzhou became available.
If all of the dormant bikes are made according to ofo’s most simple design (costed at 250 yuan per bike), the 45,000 unused bicycles represent at least 11.25 million yuan (1.75 million US dollars) worth of assets.
Mobike and ofo, by far China’s biggest bike-sharing companies, have attracted billions of yuan in funding from wealthy backers including Tencent and Alibaba.
Mobike was bought by Meituan Dianping for an estimated 2.7 billion US dollars in April. However, question marks remain over the business models of the bike sharing sector, with neither company making a profit.
With ofo forced to rent spaces to store bikes in Hangzhou, it remains unclear if other bike-sharing companies are using the same strategy there and in other bike-saturated cities.
Earlier this month, Beijing authorities said that less than 50 percent of the city’s 1.9 million dockless bicycles were in use. The Beijing Municipal Commission of Transport promised on May 25 it would “make bike-sharing companies take damaged or idle bikes off the street regularly,” according to Xinhua.