China Herald: How bike-sharing differs from ride-sharing

Jeffrey Towson

After the wars, and eventual merger, of the car-sharing companies, attention has turned to the bike-sharing firms. But bike-sharing is fundamentally different, warns Peking University business professor Jeffrey Towson in E27, and history will not repeat itself. Bike-sharing is not part of the sharing economy, he explains.

E27:

Both companies have their apps, but Ofo lowers friction by linking the app to WeChat without having to download a separate app. The users can either register their mobile phone or log in via WeChat account and unlock bikes on the streets at their convenience.

While many business analysts predict how the two rivals will merge eventually, Jeffrey Towson, consultant and professor at Guanghua Peking University, thinks otherwise. He explains why bike-sharing is nothing like ride-sharing of Didi and Uber. The professor compares the bike-sharing economy to a vending machine business than a ride-sharing one.

“Unlike ride-sharing, bike-sharing does not have a network effect,” he says. “The ride-sharing experience is a two-sided network, in which additional riders increases the networks’ value to the drivers and each new driver increases to value each rider. Through customer rating and recording of wait-time, the service gradually improves as its user population grows.”

“The problem with bike-sharing, however, is that there is no second population of drivers using the platforms and providing the bikes,” he adds. “The bikes are constantly replenished by companies themselves as opposed to each rider adding any value to the other riders. It seems that bike-sharing isn’t really part of the sharing economy.”

More in E27.

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