Students use OFO sharing bicycles at campus in Zhengzhou, Henan province, China, September 6, 2016. Picture taken September 6, 2016. China Daily/via REUTERS ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY. EDITORIAL USE ONLY. CHINA OUT. NO COMMERCIAL OR EDITORIAL SALES IN CHINA.     - RTSPEP6
© Reuters

Record a time-lapse video for a few minutes outside the Shenzhen headquarters of Tencent, China’s most valuable internet company, and you will watch a strange loop. Dozens of people will hold their smartphones over the handlebars of gaily painted blue, yellow and orange bicycles, scan a QR code and either hop on a bike or lower a kickstand and stroll away. Welcome to the internet of bikes.

The scene outside Tencent’s office building is being replayed in thousands of locations in China’s major cities as the latest vehicular craze catches on. This is more mundane than the much-hyped driverless cars, hyperloop transports or delivery drones but these bike-sharing services will probably catch on more quickly around the world than the more sophisticated schemes.

In doing so, they will spell the death knell for the cumbersome bike rental services operated by many cities and loudly championed by politicians such as Boris Johnson, London’s former mayor.

The founders of these Chinese companies, which have names like Bluegogo, the current market leader Mobike, ofo and UBike, had monitored the spread of car services such as Uber, Lyft and, in China, Didi Chuxing.

Some noted that there were far more people taking public buses and trains than sitting in the back of vehicles they had summoned with an app. They had also noticed the drawbacks of the traditional cycle rental services offered by cities. With the latter, riders have to find a parking rack to see if a bike is available; they need a special payment card and, at the end of their ride, they have to hope that a slot is available in an authorised stand.

Compare the service offered by the internet of bikes. Here, the most advanced companies allow riders to open apps, locate the nearest convenient bike and reserve it for up to 15 minutes. After they find their bike, they scan the QR code on the handlebar, receive authorisation (which also unlocks the machine) and the payment is calculated depending on the length of time they ride.

At the end of the ride, the cyclist triggers the lock, whose battery had been recharged by energy generated by the pedalling, and proceeds to their meeting, lunch reservation, haircut appointment or shopping outing without having to worry about a parking ticket or a tip for the driver.

The creative use of the battery has another major benefit: it removes the need for bike racks that require special construction and electricity.

By the end of 2017, somewhere between 8m and 10m of these internet bikes should be on the streets of Chinese cities. The leaders of these companies have built factories to help spread their gospel more quickly and are poised to export their bikes and services to cities outside China.

For now, though, they are engaged in the Napoleonic battles that are typical of any new market in China where the level of competition — and the savagery of the insults traded between competitors — are unmatched in the west.

With about 1.2bn petroleum-powered vehicles on the world’s roads today, it does not take much to imagine a future where a couple of hundred million bikes, all connected to the internet, are also on the streets.

If that sounds strange, consider that it is no more peculiar than the notion of renting out a spare room to a stranger or hopping into a car service operated by a company with a four letter name (not ‘taxi’) would have been before the arrival of Airbnb, Uber and Lyft.

Should these wonderfully imaginative bike services from China take hold elsewhere, they will be rolling advertisements for why tariffs and punitive import taxes are impediments to progress, lower prices — and a reliable way to get to lunch on time.

The writer is a partner of Sequoia Capital. These views are his own. Sequoia persons may hold interests in companies mentioned

Get alerts on Chinese business & finance when a new story is published

Copyright The Financial Times Limited 2019. All rights reserved.
Reuse this content (opens in new window)

Follow the topics in this article