China’s Ofo scales down international expansion

Global Business

Beijing-based Ofo helped pave the way for dockless bike-sharing internationally, making available 40,000 bicycles in more than 30 U.S. cities. But Ofo’s U.S. operations are now pedaling backward. CGTN’s Mark Niu reports from San Francisco.

The company is laying off staff, while pulling out of markets like Washington DC, San Diego, and likely many more to come.

In a press release, Ofo explained why it pulled out of Chicago, saying: “The city’s restrictive regulations have made it impossible for us to continue.”

“Most U.S. cities are simply not designed to have lots of bikes moving around their communities. It’s very different from Chinese or many European or Japanese cities where bicycles are just a critical part of the streetscape,” said Asha Weinstein Agrawal, a Professor of Urban and Regional Planning at San Jose State University. “Many people see them as almost intruders and we just don’t have shared norms about where they should park, what’s polite riding behavior.”

Each U.S. city has its own regulations; leading Ofo to criticize Chicago for giving more permits to bikes that locked to something, as opposed to Ofo’s, which lock on their own.

In San Francisco, the city did not grant Ofo bike-sharing permits.

But Ofo’s still awaiting word on its application to be granted permits for the latest trend here — electric kick scooters.

A 2018 survey from Populus Technologies found that in less than one year since the introduction of the electric scooter, 3.6 percent of adults in cities – where shared scooters are available – had used the devices. That’s a faster adoption rate than both bike-sharing and even car-sharing.

Ofo’s not alone in making the transition in U.S. markets.

The San Francisco company Spin is in the process of converting all of its shared bikes to shared scooters.

“Our revenue, usage on scooters is at least twenty times higher than bikes,” said Derrick Ko, co-founder & CEO of Spin. “That just shows an extremely strong product market fit.”

“If you are going four blocks and not carrying much, a scooter is probably great,” said Weinstein Agrawal. “If you are going four miles across town and you have a basket of groceries, then I doubt you are going to want to use a scooter.”

While Weinstein Agrawal sees dockless bikes and scooters sharing U.S. roads, she said it will take time for cities and riders to come up with the most sensible rules.

Yu Zhang discusses the global bike-sharing market

CGTN’s Mike Walter discusses the global bike-sharing market with Yu Zhang.