Why is it so hard for bike-sharing companies to survive in Singapore?

SINGAPORE: The impending end of the road for another bicycle-sharing operator in Singapore highlights the ongoing struggle to build a successful business model, according to transport analysts.

From the get-go, the bike-sharing industry had to achieve both public transport and business objectives, and balance government and private funding, they noted in light of the boom and bust of bike-sharing here in less than a decade.

SG Bike on Thursday (Mar 21) announced it was exiting the market after nearly seven years. Its users would be able to port their existing wallet balance to former rival Anywheel’s platform by the end of April.

This would make Anywheel, which started out with a fleet of 30,000 in 2022, effectively the largest player in Singapore’s bike-sharing market.

The only other operator is Chinese firm HelloRide, which obtained a licence last July allowing it to operate up to 10,000 bicycles.

These scant offerings are a far cry from bike-sharing’s boom in early 2018. At the time, Anywheel, Gbikes, Mobike, oBike, ofo, Share Bike SG and SG Bike offered about 200,000 dockless shared bicycles in total.

oBike, the first to bite the dust, shuttered in June that year, followed by Gbikes and Share Bike SG later that year.

ofo’s licence was then cancelled in 2019, as it was unable to meet the Land Transport Authority’s regulatory requirements.

That year, SG Bike also acquired Mobike’s 25,000-strong fleet.

In response to queries from CNA on Thursday about the imminent exit of Singapore’s once-largest operator, SG Bike and Anywheel said the arrangement was not commercial and was made “with the best interest of the bike-sharing community”.

AN ISSUE WORLDWIDE?

The lack of financially self-sustaining, competitive bike-sharing models is a problem “not just of Singapore but a global one”, transport analyst Walter Theseira believes.

The bike-sharing model is distinct from traditional bike rental, which tends to be “very location-specific and tourist-oriented”, noted the associate professor at the Singapore University of Social Sciences.   

Assoc Prof Theseira highlighted that although there are “well-known” bike-sharing systems in global cities, there is often the need for "explicit" government or commercial support, such as from corporate sponsors, to make them work.

“The reason is that fees are kept low to encourage use, and operating costs often end up being substantial because of issues like maintenance and repositioning,’ he explained.

“What you often end up with is a city-approved monopoly to reduce duplication and increase utilisation, which is restricted to only the parts of the city with enough circulation of the bikes to reduce operating costs. And it may also need corporate or public subsidies.”

The recent boom and bust in bike-sharing has "definitely put paid to the idea that there was some magic business model that would make this work automatically”, he added.

Any bike-sharing business model might have a better chance of coming to fruition if firms improved their marketing for a start, according to transport consultant Tham Chen Munn.

He pointed out that many operators tend to misunderstand their customer profile by emphasising benefits like decarbonisation and going "car-lite".

But everyday users are “not bothered at all” by such benefits – they simply want to get from Point A to Point B.

“(Whether) I’m a first-time or regular user, I want to know where are the bikes, are the bikes in good working condition … the more useful information. Not (whether) I can save 10kg of carbon,” he said.  

While online commenters have often blamed a lack of civic-mindedness as a reason for bike-sharing flopping in Singapore, Mr Tham believes this to be “human nature” rather than Singaporean-specific behaviour.

DOES AN IDEAL BUSINESS MODEL EXIST?

Mr Tham suggested a model where a platform facilitates bike-sharing between neighbours, or people with their own bicycles.

“I know a lot of my neighbours have bicycles which are not in use. Is there a scheme where, perhaps, we can rent out personal bicycles to families? Because different families have different needs; sometimes they need the basket carrier and so on,” said the active mobility expert.

“Little things like that … maybe a bike-sharing company can expand in that sense because they are reaching out to a customer profile who (wants to) use bicycles for various reasons.”

But any bike-sharing model must first be clear about the balance between public transport and business objectives, said Assoc Prof Theseira.

“If you leave it up entirely to market forces, what you will likely end up with is very restricted types of bike-sharing that only exist in local geographic markets where it's cost-effective to supply,” he said.

“For example, you may support university campuses which are a bit spread out, the CBD (central business district) or parks. This may or may not support public transport goals.”

“Cherry-picking” in a competitive business environment might result in “more lucrative" markets being identified and supplied, while nobody will want to serve markets which are more marginal, Assoc Prof Theseira added.

Doing so, however, also creates the possibility that some markets aren't large enough to support multiple competitors.

And this leads to exit, he noted, “as we've seen many times before”.

BUILDING A CAR-LITE SINGAPORE

Analysts were split on whether government support would help bike-sharing firms take off.

Mr Tham believes the government may have “stepped in too much”. It makes things “quite difficult” and “not conducive” for people to invest in bike-sharing companies, he said.

In 2016, authorities proposed a six-month bike-sharing pilot in the Jurong Lake District, but scrapped the plan the following year amid an influx of private operators.  

“This created a different problem – unregulated over-expansion – which ended up with the government having to regulate the industry on matters like parking, service provision, size and so on,” added Assoc Prof Theseira.

“In the end, the service has impact on public footpaths, roads. It is a public service where reliability and quality matters, so some government regulation is necessary.”

He noted that experiences in other cities have suggested that a “pure private" model might not provide the service quality and coverage suitable for bike-sharing as a first- and last-mile public transport service.

“Private provision works well for areas with strong demand, but such areas may not necessarily meet public transport objectives. For example, bike-sharing and rental has always worked in recreational areas, but these areas have little to do with public transport service provision,” he explained.

“That's why if the evidence is that bike sharing actually fills an important gap in public transport, it's worth looking again at more government involvement in the sector.”

And this, the associate professor believes, would likely involve subsidies or exclusive contracts in exchange for higher service standards and coverage.