Ofo calls for self-regulation of HK bike-sharing industry

October 19, 2018 09:01
Ofo HK general manager Quentin Zhang said the firm is keen to work closely with regulators to develop a set of consumer-friendly guidelines for Hong Kong's bike-sharing sector. Photo: Ofo

The bike-sharing trend has taken Hong Kong by storm – and appears to have subsided just as fast. Since last year, six bike-sharing operators have emerged in the city. But amid fast-paced expansion and intense competition, Gobee.bike went bust this July, raising an alarm in the industry.

Despite grim forecasts for the business, ofo HK general manager Quentin Zhang believes the demand for bike-sharing services remains strong.

A pioneer in the bike-sharing industry, Beijing-based ofo has found a robust market since it entered the city last December. “Ofo alone facilitates an average of one ride every eight seconds [in Hong Kong],” Zhang told EJ Insight in an interview.

He also said about 70 percent of the bike-sharing users in the city choose ofo, citing market data.

On Gobee.bike’s decision to cease operations in Hong Kong, Zhang said: “We feel it’s a pity, but this is a normal phenomenon in the market."

He insists, however, that market demand is strong, adding that his company has begun to record profits recently.

Ofo has started to reform its business model for the Hong Kong market.

In the bike-sharing business, all bikes, equipped with e-payment and location tracking technology, are owned by the service operator and put on the streets for use by customers.

In Hong Kong, however, the service drew a lot of flak from the public, who complained about the unsightly presence of bikes left on the streets and pavements, as well as the traffic disruptions they cause in the city's narrow and jampacked roads.

While such complaints have led to growing calls for tighter regulation of the bike-sharing business, Zhang believes that the sector can be “self-regulated”. He said operators should come together and jointly establish the regulatory standards for the industry.

“Ofo is committed to self-regulating and providing clean, affordable rides in Hong Kong in a responsible manner,” Zhang said.

On the other hand, some are suggesting a fixed-dock model for bike-sharing services, which would require users to return and park the bikes in designated docks.

Zhang stressed that “the more important thing is that we have to provide more facilities and parking spaces for our users”.

“We have to work with the government to enhance the education of users and encourage better user behavior,” he added.

Ofo Hong Kong fields about 20 to 30 staff who prowl the streets daily to check and repair the bikes, while increasing the deployment of bikes to areas with high demand.

Zhang admits that the lack of cycling tracks and parking spaces is a major challenge for the development of the bike-sharing service in Hong Kong.

He believes there is still room for growth in the territory. “In areas where we have not offered the service yet, such as Hong Kong Island, there is still great potential,”  Zhang said.

Ofo will continue to work closely with the Transport Department to explore ways to extend the service to areas where it is still unavailable.

"Shared bicycles are actually a supplement to traditional means of transportation," Zhang said, and that is why ofo is actively engaging with the government to improve coordination with other means of transportation in the city.

While details of the plan cannot be disclosed yet, Zhang noted that in Paris, ofo has forged a partnership with the French public transport operator RATP. From Sept. 17 to Oct. 14, ofo bikes were deployed outside six tram stations in the French capital, allowing commuters to use the bikes to complete their journey.

After surviving the fierce competition in the early stage of the business, ofo had to contend with unpaid debt disputes, layoff rumors and senior management shuffles.

Zhang said ofo’s business in mainland China is separate from its overseas operations, and they will not interfere with each other. In Hong Kong, ofo will focus on enhancing operational efficiency and increasing revenue, he said.

Operating in the cryptocurrency space is one option the company is exploring in its search for new revenue streams. In Singapore, for example, ofo launched in April a rewards system in which customers receive cryptocurrency tokens called GSE for using the service.

Asked whether ofo Hong Kong would consider venturing into blockchain and cryptocurrency technology, Zhang told EJ Insight: "We are very interested. This is one of the topics we have been discussing. We will also consider various ways to increase income and monetize our service."

As to whether the cryptocurrency business will be launched in Hong Kong in one or two years, he said: "I think there is hope."

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EJ Insight writer