SINGAPORE: Experts have described the Land Transport Authority's (LTA) decision to reduce bicycle-sharing operators' fleet sizes as a sensible move, but not all firms are pleased.
The authority said on Friday (Sep 28) that it will grant full licences to ofo, Mobike and SG Bike, and sandbox licences to Anywheel, Grabcycle and Qiqi Zhixiang. These licences will be awarded at the end of October, after the payment of licence fees by the operators.
The application of a seventh operator, GBikes, was rejected because it did not satisfy certain assessment criteria, LTA said.
Under the new licensing scheme, ofo and Mobike will be allowed to operate a maximum fleet of 25,000 bicycles each, while SGBike's is capped at 3,000. Operating under a sandbox licence, Anywheel as well as Grabcycle will be allowed to operate up to 1,000 bicycles each, while Qiqi Zhixiang's maximum is 500.
Bicycle-sharing operator ofo had submitted an application to operate 80,000 bicycles and said it was disappointed at the LTA's decision to only allocate a maximum number which was less than half its current fleet.
In a press release, the company said it had facilitated about 100 trips every minute in Singapore this year, with each trip recording an average distance of 1.26 km.
“While we are pleased to be awarded the full licence by the LTA, we are disappointed that the awarded fleet size will not be sufficient to facilitate the high demand for bike sharing in Singapore,” said ofo Singapore general manager Isabelle Neo.
“Since our launch in Singapore, ofo has enabled about 35 million rides to our 1.2 million users, as their short distance mobility partner. With a smaller fleet size, access to a shared bike will be significantly harder for our users.”
Based on the new regulations, licensed operators can submit applications to expand their fleet sizes twice a year – in January and July. “Responsible licensees” that are able to manage their fleets effectively will be given the opportunity to grow their fleets, said LTA.
Local firm Anywheel also told Channel NewsAsia that it has recalled a number of bicycles back for upgrading to comply with the new regulations.
"We are delighted to be able to continue our operations in Singapore," said Anywheel strategy manager RJ Seet. "Anywheel will be recalling the excess bicycles and preparing them for the next round of licensing in January."
Ofo, which has a fleet of 80,000, has also begun to downsize its numbers.
Experts say that bicycle-sharing continues to play a key role in Singapore's transport ecosystem despite the overall fleet size being reduced.
"There is an integral role for bicycles to play in Singapore but it's just a question of how to make sure that bicycles are not indiscriminately parked and are in sufficient spaces where they are needed," said Singapore Management University transport researcher Terence Fan.
"Hopefully, players can learn to efficiently manage resources and not just dump bikes in Singapore in a way that would have happened had the regulations not come into play.
"It's a smart move (by the LTA), it does take some guts to impose it. It's a painful trade-off that they (the LTA) is trying to make, but they would rather see it limited now first and see how these players get smarter with their operations."
According to data provided by the LTA, the average utilisation rate for the entire shared bicycle population in Singapore was slightly more than one trip per day.
"This is much lower than the utilisation rates in other cities such as New York City and Chicago, where each shared bicycle is used about three to six times a day," it had said in a media release.
Pointing to this data, Singapore University of Social Sciences (SUSS) transport researcher Walter Theseira noted that the number of shared bicycles currently in public spaces is "an unsustainably large number".
"It makes sense that the LTA wants to cut the fleet size," added Dr Theseira.
"I don't think it was a case of people not being able to find a bike - rather it was a case of too many bikes. We were spoilt for choice, it was good for people looking for a bike but not so good for people trying to walk down a path."
But not all firms will need to reduce their fleet sizes; local firm SG Bike plans to increase its fleet by 800 to hit the maximum allocated quota of 3,000.
"We always carefully consider our fleet size alongside the available resources and infrastructure before introducing more bicycles to ensure that we can manage our bicycles and that they are always in a good riding condition," said SG Bike marketing director Benjamin Oh.
MoBike, which will be permitted to have a fleet of 25,000, said that it remains committed to its users in Singapore.
“Singapore was the first international city to welcome Mobike, and we look forward to continuing to be part of the city for many years to come," said Mobike Singapore country manager Sharon Meng.
But, Dr Theseira warned that the regulations could hit some operators hard.
"This entire industry has been focused on market share and growth, that's because their investors could be expecting them to turn in double-digit or triple-digit growth figures," explained Dr Theseira.
"But now that we have made a decision to orient them towards profitability and sustainability instead, it remains to be seen that investors are interested in that.
"We will have to see what happens in the market, but I personally wouldn't be surprised if the market consolidates."