Sharing economy

Rental bikes company hits bump in the road in Germany

Osterhase schon unterwegs
Let's hope this bunny doesn't dump the bike in the bushes along with the Easter eggs. Source: dpa

In Munich, oBike bicycles could be found almost everywhere, just maybe not in a usable place and state — piling up bent in public parks, scattered in bushes, trees or in the river.

Within just a few months, the company’s bike sharing offer in the Bavarian capital has turned into a nuisance for many residents. So the Singapore-based company, which operates without docking stations, took action and decided to collect 6,000 of its 6,800 grey-yellow bicycles.

When oBike entered the German market, users had to pay a deposit to prevent them from treating the bikes recklessly. But that does not help if non-customers vandalize and destroy the bikes. Adding difficulty to the problem, oBike uses heavy bikes, slowing riders down.

Fleets of bikes have been popping up around the world. Traditional bike share programs require docking stations, like Santander Cycles in the British capital London, still commonly known as Boris Bikes after then-mayor Boris Johnson, or the ubiquitous Citi Bikes in New York City.

oBike and Deezer Bike cluttering the payement in Berlin
A more and more common sight on the Berlin sidewalks. Source: DPA/Khang Nguyen.

As more dockless bike share companies are entering the race, they’re stumbling over some hurdles. Customers can pick the bikes up through an app, often for around $1 for half an hour. When they’re done pedaling, customers are expected to park the bikes responsibly, though some don’t. Germany is not the only scene of the crime. In London, scattered oBikes have reportedly clogged ways for wheelchair users and in Malaysia, oBike had to file police reports over vandalized bikes.

An armada of 20,000 dockless bikes has also recently invaded the US city Dallas through five startups fueled by hundreds of millions of venture capitalists dollars: US-based VBikes, Spin and LimeBike and Chinese Ofo and Mobike. But just like in Germany, not everyone is amused. Bikes have ended up hanging in trees and drowning in lakes.

In China, where docking-less bikes are extremely popular and a multitude of companies compete for pedal power, supply exceeds demand. So much so, that tens of thousands of bikes are now piling up at bicycle graveyards.

Rental bicycles have clearly become part of the cityscape in New York, London and Paris. But Germans are more reluctant to embrace the green and modern form of urban transportation. According to a survey from 2017, only six percent of respondents used a rental bike more than once a month.

The industry, especially driven by Asian companies, is confusing for some German users. If you want to rent bicycles in different cities, you need several apps on your smartphone. While oBike operates in Munich, Byke is, for example, available in Duisburg, but not in Düsseldorf.

Nextbike has a wider reach of 50 different German cities. The company relies on a station-based system, meaning the bikes cannot, unlike oBike, simply be dropped off anywhere, but must be brought to a dock – which can sometimes be a train station away from the rider’s actual destination. The businesses also usually do not cover the entire city, just pockets.

The withdrawal of oBike is an ominous signal for the bike sharing industry in Germany. Munich residents, however, won’t be tripping so often over scattered bikes.

Thorsten Firlus writes for Wirtschaftswoche, Handelsblatt’s sister publication, and is based in Düsseldorf. Stephanie Ott is a writer and editor for Handelsblatt Global in New York City. To contact the authors: thorsten.firlus@wiwo.de and s.ott@extern.handelsblatt.com

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