Bicycle-sharing operators right-sizing their fleets ahead of LTA deadline

Bicycle-sharing operators right-sizing their fleets ahead of LTA deadline

Ofo bicycles file
File photo of ofo bicycles. (Photo: AFP/Eric Piermont)

SINGAPORE: Bicycle-sharing companies in Singapore with bigger fleets than they are allowed are moving the excess bikes to warehouses, scrapping them for spare parts and even shipping them overseas ahead of the Land Transport Authority’s (LTA) deadline on Thursday (Nov 1).

This comes after LTA awarded licences to six operators last month.

Mobike, ofo and SG Bike were granted full licences, while Anywheel, GrabCycle and Qiqi Zhixiang were awarded regulatory sandbox licences, which are intended for those that had been operating for less than six months in Singapore at the point of application.

While ofo was granted a maximum fleet size of 25,000, LTA said on Monday that the bike-sharing company had requested to further reduce its fleet to 10,000 bicycles, which is a fraction of the 80,000 it had initially applied for.

Ofo told Channel NewsAsia that it has been removing the surplus bikes, as well as pulling broken bikes off the streets, to comply with the licensing regime.

General manager Isabelle Neo said: “We will liquidate the bikes for spare parts to be used to upkeep our fleet. Parts that won't be used, will be repurposed or processed for other means.”

READ: LTA awards licences to six bike-sharing operators; ofo to downsize fleet to 10,000

Anywheel founder Htay Aung told Channel NewsAsia that the company had hoped to apply for 30,000 bicycles, but was informed that the maximum fleet size for sandbox licence holders was 1,000 bicycles.

It was subsequently awarded a fleet of 1,000 bicycles.

While he declined to share how many bicycles it used to have on the streets, Mr Htay Aung said the company has acquired two new warehouses to store its excess bicycles. 

A thousand spare bicycles will be kept in Singapore to replace any that are damaged, while the rest will be moved to other markets in Southeast Asia that it is planning to enter by the end of the year, said Mr Htay Aung. 

As of Sunday, Mr Htay Aung said Anywheel had right-sized its fleet. 

Anywheel also intends to apply for a full licence in January.

However, the rest of the existing operators have faced fewer logistical challenges.   

Mobike told Channel NewsAsia the company did not need to do much adjustment to get its fleet size to the 25,000 it was allocated. 

mobike file photo
File photo of a Mobike parked at a bicycle rack at a HDB void deck in Singapore. (Photo: Elizabeth Khor)

Of the existing operators, SG Bike is the only player that is building up its fleet - from 2,200 to the 3,000 it is allowed.

The remaining two other operators have not hit the streets yet.

READ: LTA limits on fleet sizes disappoint ofo, but experts see long-term benefits

GrabCycle launched as a bicycle-sharing marketplace app in March, but it remains unclear what its new model will be now that it has been allocated a fleet size of 1,000 bicycles. 

"With the sandbox licence, we now have an opportunity to expand our suite of affordable transport offerings, bringing us closer to our multi-modal vision," said a Grab spokesperson.

Channel NewsAsia has reached out to new entrant Qiqi Zhixiang from China, but has not received a response.

IMPACT ON BOTTOM LINE

Existing operators we spoke with had mixed reactions to the impact of the new regime on their bottom line.

Ofo raised prices this month, less than two weeks after it was granted its licence – in a move that Ms Neo said was prompted by licensing costs.

READ: QR code parking system for shared bicycles to start next year; offenders face fines, bans

Bicycle-sharing operators that are awarded a full licence have to pay S$60 for each bicycle in their fleet.

"The increase in ofo's pricing as a result of the licensing cost is a reflection of our commitment to be sustainable in Singapore and to continue providing efficient and convenient short-distance mode of transportation to our users," said Ms Neo.

But Mobike said the new regulations could lead to savings in the long run. 

Besides adjusting fleet sizes, bicycle-sharing operators will have to manage how users park their bicycles, such as by implementing a QR code geo-fencing solution and banning users who repeatedly park indiscriminately. 

Mobike said these parking regulations mean it can spend less manpower and resources to return its bicycles to proper parking places.

"We are a last-mile transportation solution, but at the end of the day, we're also part of the entire transportation network. So we need to make sure that we remain relevant in this market," said Mobike country manager Sharon Meng.

"Raising prices is not something that will solve all the problems. Eventually it's about increasing (fleet) efficiency, better fleet management using technology, and to generate revenue through other sources of income streams."

Mobike said it plans to begin corporate sales and launch advertising on its bicycles by the end of the year. 

Source: CNA/hs(mn)

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