Beijing Bicycle Redux

While mobile payments totally transformed China’s financial landscape, shared bicycles transformed its urban landscapes.

In many ways, the shared bike revolution was turning back the clock. From the time of the Communist Revolution in 1949 through the turn of the millennium, Chinese cities were teeming with bicycles. But as economic reforms created a new middle class, car ownership took off and riding a bicycle became something for individuals who were too poor for four-wheeled transport. Bikes were pushed to the margins of city streets and the cultural mainstream. One woman on the country’s most popular dating show captured the materialism of the moment when she rejected a poor suitor by saying, “I’d rather cry in the back of a BMW than smile on the back of a bicycle.”

And then, suddenly, China’s alternate universe reversed the tide.

Beginning in late 2015, bike-sharing startups Mobike and ofo started supplying tens of millions of internet-connected bicycles and distributing them around major Chinese cities. Mobike outfitted its bikes with QR codes and internet-connected smart locks around the bike’s back wheel. When riders use the Mobike app (or its mini-app in WeChat Wallet) to scan a bike’s QR code, the lock on the back wheel automatically slides open. Mobike users ride the bike anywhere they want and leave it there for the next rider to find. Costs of a ride are based on distance and time, but heavy subsidies mean they often come in at 15 cents or less.

It’s a revolutionary, real-world innovation, one made possible by mobile payments. Adding credit-card POS machines to bikes would be too expensive and repair-intensive, but frictionless mobile payments are both cheap to layer onto a bike and incredibly efficient.

Shared-bike use exploded.

In the span of a year, the bikes went from urban oddities to total ubiquity, parked at every intersection, sitting outside every subway exit, and clustered around popular shops and restaurants.

It rarely took more than a glance in either direction to find one, and five seconds in the app to unlock it. City streets turned into a rainbow of brightly colored bicycles: orange and silver for Mobike; bright yellow for ofo; and a smattering of blue, green, and red for other copycat companies. By the fall of 2017, Mobike was logging 22 million rides per day, almost all of them in China. That is four times the number of global rides Uber was giving each day in 2016, the last time it announced its totals. In the spring of 2018, Mobike was acquired by Wang Xing’s Meituan Dianping for $2.7 billion, just three years after the bike-sharing company’s founding.

Something new was emerging from all those rides: perhaps the world’s largest and most useful “internet of things” (IoT) networks.

The IoT refers to collections of real-world, internet-connected devices that can convey data from the world around them to other devices in the network. Most Mobikes are equipped with solar-powered GPS, accelerators, Bluetooth, and near- field communications capabilities that can be activated by a smartphone. Together, those sensors generate twenty terabytes of data per day and feed it all back into Mobike’s cloud servers. This results in masses of valuable data that can be used to power smarter and more efficient algorithms.

Posted by Dr. Kai-Fu Lee on Nov 27, 2018 in All Posts China Innovations

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