Money Australia's bike sharing industry is near collapse as 3 major companies shut

04:31  11 july  2018
04:31  11 july  2018 Source:   businessinsider.com.au

Ofo bike-sharing company to close in Australia

  Ofo bike-sharing company to close in Australia Scores of yellow bikes, often seen parked and dumped in obscure places across Sydney and Adelaide, will soon disappear. Bike-sharing company Ofo has announced it is shutting down its Australian operations.The business will wind down over the next 60 days, with bikes to slowly be removed from the streets and put into warehouses. © 9NEWS A study found that Australia has the lowest usage of share bikes in the world. Picture: 9NEWS The Chinese-founded company told 9news.com.au in a statement that it made a “strategic decision to focus on priority markets internationally”.

Three bike sharing businesses — oBike, ReddyGo and Ofo — have gone from Australia . Bike sharing companies have also failed to identify and implement ways to incentivise consumers to BI / Research is designed to help executives and industry leaders understand the major challenges and

A bicycle helmets vending machine in The University of Melbourne Parkville campus, Australia . As bike - share companies have transitioned into dockless programs, this effect may have been reduced. "Chinese bike share graveyard a monument to industry ' s 'arrogance'". the Guardian.


  Australia's bike sharing industry is near collapse as 3 major companies shut © Provided by Business Insider Inc The scramble to establish a viable bike sharing business has all but ended in Australia, leaving behind broken and abandoned frames and a business model that didn't work.

Most bike sharing businesses in Australia have withdrawn from the market over the past week, including oBike, ReddyGo and Ofo.

They came up against local residents and councils in capital cities who didn't like that the bikes ended up in the local river, or up a tree, or mangled in a back street, or as part of an impromptu art installation.

In Victoria, the Environment Protection Authority Victoria gave oBike deadlines for removing the yellow rental bikes when they were dumped or damaged, and empowering the City of Melbourne to issue fines of up to $3,000 for each incident.

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A corporate collapse typically involves the insolvency or bankruptcy of a major business enterprise. A corporate scandal involves alleged or actual unethical behavior by people acting within or on behalf of a corporation.

switch to the Australia edition. China’ s third largest bike sharing company has reportedly run into financial trouble, amid a wave of busts and consolidations in an industry that took the country by storm this year.

oBike pulled out of Melbourne and on Friday its parent company in Singapore went into liquidation.

Reddy Go, the Australian bike share company, told its members it is restructuring, offering two free bikes to those who didn't want to take part in the yet to be announced new business.

And Ofo, a business founded in China, today announced the end of Australian operations.

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Bike - sharing as we know it in Washington is about to change with the arrival of dockless systems. Starting Wednesday, cyclists in the nation’ s San Francisco-based Spin also is launching operations in the city this week, touting an American product that is now available in three other major U. S . cities.

Deutschland DE. Australia AUS. France FR. India IN. In March, Seattle shut down its bike - share system. The decision capped a perplexing, embarrassing saga for a major city that consistently ranks near the top for bicycle commuters per capita.

"Ofo has made a strategic decision to focus on priority markets internationally," a spokesperson said.

"ofo will therefore wind-down operations in Adelaide and Sydney during the next 60 days. As part of this process ofo will begin to remove bikes from cities and consolidate them to our warehouses.

"This decision does not come lightly, and ofo Australia will act responsibly in each market as it winds down operations, resolving any outstanding concerns before finalising operations."

While bike sharing services have proved popular in Europe and China, they have struggled in Australia due to local laws, vandalism, complaints about misplaced bikes, and data collection concerns.

Kim Do, a Senior Industry Analyst for IBISWorld, Kim Do, says bike sharing businesses have two main hurdles.

“The first is balancing supply and demand. An oversupply of bikes is a key reason why dockless bike sharing services are failing in Australia," she says.

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Share via Email. Three people have been arrested after an elevated section of a major north-south highway in the Bobby Barnhart, who works for a financial technology company near the road, said he and his colleagues had watched the bridge collapse from about 60 yards away as the fire raged.

Bike - sharing companies - with their capital-intensive, cash-burning Earlier this month, Bluegogo, the third largest bike - share outfit, collapsed . He previously ran a mini-loan business in Chongqing targeting the consumer market - which also shut down due to lack of investment.

"An abundance of bike sharing start-ups have entered the Australian market over the past year, all fighting for market share. However, the number of users has failed to grow in line with supply, leading to a glut of share bikes."

Bike sharing companies have also failed to identify and implement ways to incentivise consumers to correctly park their bike. This led to the second issue for bike sharing services -- vandalism and dumping.

“As Australian government authorities began to crack down on dumping, imposing fines of up to $3000, Australia was no longer a viable market for these players,” she says.

The bike sharing business model, of obtaining revenue through data mining, advertising and interest on deposits, rather than the fee charges per ride, is an additional issue.

“A substantial amount of revenue for bike sharing companies stems from selling consumer data to other businesses," she says.

"This includes details such as rider profiles and locations frequented. This data is then used by other organisations to assist with urban planning, marketing campaigns, or to assist with identifying locations with high consumer traffic.

"However, a business model that relies on data mining poses an issue, as consumers have become increasingly cautious of data breaches."

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