Jun 20, 2017

What are the prospects for dockless bike share in Australia?

Dockless bike share faces a much bigger challenge in Australia than in countries like China, especially given new entrant oBike has to make it work commercially

Alan Davies — Editor of The Urbanist

Alan Davies

Editor of The Urbanist

Parked dockless share bikes offered by competing companies – I took this pic in Shanghai earlier this month, but they’re in all the major cities in China. They’re not always parked as neatly as this

Shortly after the Victorian Government threw another $4.9 million at struggling Melbourne Bike Share (MBS) in this year’s budget, Singaporean company oBike commenced a pilot in Melbourne of its dockless bike share system.

Dockless bikes are now a common sight in a number of places e.g. China, Singapore and a handful of US cities. Multiple companies in Chinese cities compete for the custom of travellers (see exhibit). What distinguishes dockless bikes from conventional bike share like MBS is they don’t require docking stations; the bike is left wherever the journey finishes. Travellers find available bikes (wherever they might be) by an app on their smartphone.

It seems courageous to introduce another bike share system in Melbourne given the lacklustre performance of MBS, but oBike has a number of advantages for both riders and governments. The key one is flexibility. Provided there are enough bikes in the fleet – and oBike says it’s looking to provide as many as 10,000 – travellers in the inner suburbs should theoretically have little trouble finding one within a reasonable walk.

Having a big fleet with what is effectively an infinite number of stations will address one of the main problems with MBS; it only has 600 bikes and 50 docking stations, confining it to the city centre. From the public’s point of view, oBike has another big advantage over MBS; it doesn’t require a direct government subsidy. The cost of setup and operation is carried by the company rather than taxpayers.

There are nevertheless serious risks for oBike. The key one is Victoria’s mandatory helmet law. The company is providing helmets with each bike, but it’s not clear if Melburnians are prepared to tolerate such intimate body contact with strangers. It might be telling that providing free helmets didn’t give much of a boost to MBS or to Brisbane’s similarly underperforming CityCycle scheme.

That suggests the helmet law might not be the only potential problem. Even if oBike were exempt from the law, there mightn’t be enough customers brave enough to cycle on Melbourne’s streets. There’re too many thoughtless drivers and not enough infrastructure to make cycling in Melbourne a fear-free exercise for less experienced riders.

Melburnians also differ in a number of ways from the residents of places like Beijing where dockless schemes have been implemented on a big scale. For one, the tradition of cycling for transport in Australia is relatively weak. Another is those most interested in cycling tend to have their own bikes. And the relatively dense and frequent network of tram services in the inner suburbs (trams are free in the CBD) might make bike share less useful than it is in other places.

The oBikes themselves look good but they’ve got some design problems that could limit their appeal. They’re very heavy and they’re surprisingly small, making them uncomfortable for taller riders. Astonishingly, they don’t have gears (share bikes like MBS usually have three). It’s as if no one from oBike bothered to look at Collins St or Exhibition St.

So, it’s far from self-evident that oBike will be a winner. The criterion for success isn’t simply attracting a lot of riders; had MBS done that it would’ve been hailed a great success. oBike has a much more demanding test; it must be commercially viable. And if it turns out to be a goer, it might well face competition from one or more rival operators. I think the company is wise to do a pilot, although I question how much it can learn from a mere 200 bikes.

Dockless bike share is very new and it’s not clear yet that the model works commercially even in large Chinese cities where the cost of other modes is relatively high (high levels of venture capital funding do not necessarily mean it will be viable). In Melbourne, oBike will have to address the liklihood of high rates of damage and loss in its fleet, as well as the problem of imbalances i.e. bikes tending to left in large numbers at a few key destinations (subsidised schemes like MBS geographically redistribute bikes on a regular basis).

If it succeeds in Melbourne, oBike is likely to create a problem with parking of bikes. The company appears to have shifted much of the cost of storage onto local government, who’ll have to manage the problem of how to accommodate so many bikes without unacceptably compromising the quality of public spaces. That task will be even harder if other operators enter the market. I don’t think it’s necessarily a deal-breaker, but it will be a hot political issue that must be dealt with.

If it proves to be commercially viable, oBike will obviously be providing private benefits for users. However I don’t think the social benefits will be particularly high because the experience with successful bike share schemes elsewhere suggests they don’t reduce car travel by much; bike share mostly replaces trips that would otherwise be made by public transport or walking. On the other hand, it would give the Government the pretext to stop pouring $1 million a year down the MBS greenwashing hole. And anyway, the social costs shouldn’t be very high either.

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8 thoughts on “What are the prospects for dockless bike share in Australia?

  1. Itsumishi

    It looks like oBike is doing a big roll-out right now. I’ve just witnessed a whole lot of bikes being offloaded onto one of our major strip shopping streets. I asked one of the gentlemen unloading the bikes how many they were distributing and got the response “7,500 for now, but its going to be a lot more soon”.

    Surprisingly, none of the bikes I saw had helmets attached.

  2. Adrian Lobo

    My initial experience and thoughts are here:
    As usual, a concise and informative write-up AD.
    But I’ll add a few points to consider:
    – The tech giants funding dockless bike share in China (Tencent, Xiaomi) aren’t trying to make money on bike trips. They’ve got much deeper revenue sources in mind centred on the smartphone and knowledge about their tech-savvy users.
    – Personally, I’d be delighted for deep-pocketed private companies to subsidise dockless bike share here too while they see what they can make of it. The advantages for Australian transport cyclists are considerable – you just need to think a little outside the box, such as relocating the bikes to where they’d be of most use to you personally. I refuse to use Uber or taxis for local trips and oBikes are a handy addition to the toolbox.
    – You’re likely right about the limits of the social benefits you specified. But those aren’t *all* the potential social benefits. The greatest social benefit to bike share is the possibility of getting far more residents to experience cycling for transport for the first time. The effect on empathy and future motor vehicle behaviour around cyclists could be considerable over time.
    – You indicate the barriers for a commercial venture are higher. But 10,000 bikes will never be dropped into Australian cities. The usage also won’t be high enough to create the parking issues seen in China or other regulatory issues. I expect these profit-driven ventures to be cost-savvy here, data-driven, flexible and creative. Essentially, everything that Melbourne Bike Share is not.

  3. Saugoof

    Same as other commenters, in a nutshell the problem is the mandatory helmet laws. Removing helmet laws by itself may not guarantee the success of a bike sharing program, but while the helmet laws are in place, bike sharing will NEVER be popular. Doesn’t matter what else you do, that will always be the stumbling block.

  4. Itsumishi

    Good write up Alan. I’ve been looking at this issue very closely the last few weeks and I think you’ve really covered it well in a relatively short article.

    Can I ask where you got the 10,000 bike figure? I’ve heard it floated, but only via the grapevine. It would be useful to see it in writing somewhere.

    I also think oBike or a similar scheme could actually play a role in the end of MHL in Australia. Here’s one hypothetical scenario:

    Various schemes take off, and are hugely popular.
    Helmet compliance is low, police are enforcing rules in a haphazard manner
    Increase in cyclist numbers finally persuades governments at all levels to start investing in real cycling infrastructure
    Drivers become more aware of cyclists due to increasing cyclist numbers
    Helmet compliance continues to drop
    The Enforcement of “unfair” helmet laws becomes a political hot potato

    1. Alan Davies

      Itsumishi, the 10,000/200 figures are via someone involved in the industry; but I’ve seen them mentioned on social media in various places. I take 10,000 as a statement of intention; doubtless the company will roll-out whatever number makes commercial sense to it at the time.

      Your scenario strikes me as plausible if oBike were to take off on a grand scale; politicians would have to balance MHL against the continuing viability of a business. But it’s by no means certain oBike will be a success.

      Then there’s the alternative scenario:

      – oBike takes off and is hugely popular
      – Helmet compliance is low
      – Public furore over untidy bike parking reinforces complaints about low helmet use
      – A helmetless oBike rider is killed in a collision with a car
      – Heavy-handed regulation of oBike (parking/helmets) increases costs
      – oBike unviable and closes. Helmet law unchanged.

      1. Itsumishi

        No doubt either scenario is possible. There’s also the a good possibility the whole thing is a bit of a flop in Australia; although I think it is much more likely that it will grow rapidly and be very popular. Especially to travel between inner suburbs (especially east-west between Sydney Road and High Street, which has lots of good cycling routes but poor PT connections).

        In any case I don’t foresee helmet laws changing anytime in the near future; and any share bike companies coming into play will have to contend with this obstacle.

  5. Xoanon

    The helmet law is a big issue, for sure. That aside, I’ve always thought bike share would work much better in Melbourne’s inner suburbs rather than in the CBD itself. The radial nature of the tram network in these areas (and the relatively expensive tram fare for short journeys) would make short bike trips attractive. I could imagine using a bike for getting from, say, Carlton across to Fitzroy. That could be done easily and safely along quiet back streets, where no helmet would be necessary for safety.

  6. Michael

    Mandatory helmet laws will stop this from being properly successful.

    We need voluntary helmet laws for adults on pushbikes, or perhaps even a modification which says mandatory helmet laws for adults if you are playing “temporary Australian” and riding with the traffic on a road that has the speed limit of over 50 km an hour (or something similar) because Australia has now missed out on 25 years of integrated pushbike infrastructure – reason – for 25 years the falling % of population ridership has made it impossible for governments to justify a proper spend on pushbike infrastructure.

    In New York their bicycle share scheme has been operating for about five years now with nearly 20,000,000 “rides” in traffic and pedestrian conditions that make Sydney look like a country town they have just had their first fatality, the report is that an off duty Israeli army officer was run over by a bus and helmet or no helmet the poor fellow would have been dead anyway.

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