Bumpy ride for bike-sharing economy 

But with rental rates as low as Bt22 per half-hour, Bluegogo’s days were numbered and last month it became the latest Chinese start-up to fold. 
Founded in 2016, Bluegogo isn’t the only company falling by the wayside of the “sharing economy”, the model which enables assets to be borrowed or rented peer-to-peer. While these bike-sharing services provide a low-cost, carbon-free mode of transport, for some people at least they’re failing to produce a viable business model. 
Positioned as “uber for bikes”, these bike-share companies serve a consumer need. Customers can unlock and rent bikes using their smartphone and bicycles can be dropped off anywhere. Users pay a deposit fee of 99 to 299 yuan (Bt488 to Bt1,474) depending on the company and then pay a small fee for every 30 minutes of use. However, despite their popularity, at least three other bike-sharing companies have also gone bust in recent months, amid concerns that there are too many bikes and not enough demand. With Bluegogo’s having been taken over by former competitor Green Bike-Transit, the wave of consolidations may mean just one or two companies will soon dominate China’s bike-sharing industry.
The power of the industry’s two largest ventures is astounding: Mobike, whose investors include Tencent and Foxconn, and Ofo, who are backed by Alibaba, both claim valuations in excess of a billion US dollars. On peak days, each service provides more than 25 million rides, almost as many as the entire US bike-sharing industry provided in the whole of last year.
There were indeed red flags for Bluegogo throughout 2017, most notably a failed entry into the US market via San Francisco. Intending to “disrupt” the US bike-sharing industry, Bluegogo was instead met with sharp resistance from local politicians, as well as a Ford Motor Company-backed rival bike-share company. After four months navigating permits, fines and zoning rules, Bluegogo withdrew from the market. While a lot can be said for local legislation hampering innovation, it is a reminder that high-profile Chinese companies are by no means guaranteed to crack the US market. The past 18 months have been a whirlwind for China’s bike-sharing industry. However, with too many competitors backed by far too much venture funding, chasing far too little profit, a shakeout in the industry was inevitable. Whether Bluegogo’s collapse foreshadows a similar consolidation in other sectors of China’s budding-sharing economy remains to be seen.