Bike-sharing pioneer of China: Mobike
newsweek ags , Flickr, All rights reserved
By Ziwei Huang
Mobike has emerged as a social innovation which facilitates the pioneered free-floating bike sharing system of China as a result of the empowerment of internetworked ICTs. With a focus on the role of app-based service infrastructure, a critical analysis will be drawn on Mobike and its transformative effects on the travel industry and the changing socioeconomic relationships in China.
The first section of this essay will provide an overview to the operations of Mobike, while section two will examine the company’s historical development and regulatory debacles. Mobike’s business model and internet ecology will also be examined in section three and four. Lastly, a discussion on Mobike’s revolutionary internet transformations will be explored.
What is Mobike
Mobike is an online stationless bicycle-sharing service which provides users the nearest access to bicycles service specializing in short-term bicycle rentals (Wang et al., 2019). This Beijing based private company enables travelers with “the last mile ride” opportunity from origin to destination by an environmentally-friendly mode of travel (Karki & Tao,2016, pp.188-194). The Mobike prompted mobility sharing community can be seamlessly connected with what Hamari, Sjöklint, and Ukkonen (2016, pp.2047-2059) has argued as sharing economy or “collaborative economy,” using economy, sharing the access to goods and services, or coordinating service-based community. Also, Mobike is an example of O2O(online to offline) move, from mainly the digital world to increasingly involved in physical world(Lan et al., 2017). In essence, the positive meanings associated with economic behaviors as in the ‘sharing economy’ noted by Nicholas Johns (2017, p.63), such as ‘equality, selflessness and giving’ can be appropriately traced from the operations of Mobike.
The historical development of bike-sharing and the advent of Mobike
The history of shared bicycles can be dated back to the 1960s (Yang, Li and Zhou, 2019). According to an article from smart cities dive (2017), before dockless bike-sharing programs first emerged in China in 2016, four generations of bicycle-sharing systems existed in the world. The first “shared” bicycle concept was born in Amsterdam, where the ‘White Bicycles’ were in free circulation. However, the program promoting free bikes has to be ended due to illicit using behavior and theft. Thus, the second generation of bike-sharing required coins to access and asked bike users to access the service at dedicated locking locations. In 1998, France introduced the third generation of bike sharing replacing the coin-access with smart card access in an attempt to allocate efficiently the mobility resources across various stations. In the fourth generation, bikes equipped with electronic devices which help distributors to identify the bikes by stations and evaluate the conditions of properties was prevalently introduced. In 2016, the Mobike’s bikes sharing system became the fifth generation. The primary distinguishing feature of this new generation system is that this new bike sharing system is completely dockless, which means users can leave the bikes or pick them up anywhere in a city, thanks to the interactivity brought by the empowerment of ICTs such as ‘GPS system, equipped sensors and actuators, and a means to connect to the Internet’(Dijkmana et al., 2015, p.672).
Miwdi, Flickr, all rights reserved
As Xinlei Wang and Feng Ke’s article on Compasslist notes, Mobike——the first shared smart bikes system in China, as a crazy idea touched millions of lives, was raised by a former automobile journalist Hu Weiwei. Early on from the establishment of Mobike was filled with obstacles. Back in 2015, realizing not being able to find suppliers for purchasing bikes to the preferred specifications such as ones can be unlocked simply by scanning a QR code, Hu with her small team used US$5 million seed funding to start crafting and designing their own bikes. Dreams turn into reality in the following year. In April 2016, the first batch of Mobikes were rolled out and quickly winning the hearts of thousands of riders in China. Yet the company soon hit significant legal and regulatory hurdles and financial crisis, suffering nightmare incidents such as a wide-scale of damaged mobility properties and misconduct by riders such as wrongful parking and putting up illegal ads on sharing bikes (Lan et al., 2017).
Bike-sharing brings out actively strikes against Mobike’s operation wherein its almost instant-accessible attribute via platform services and sustainability has displaced the interests of the long-formed vehicle hiring industry in China. As exemplified in the case of Jinin, Mobikes’s arrival greatly affected the local cab rentals and vehicle hiring market and thus a backlash against the operation of bike sharing was virally transmitted in China (Sohu News, 2019). Ultimately, Mobike’s early stage business failed. In April 2018, it was acquired by a Chinese web company Meituan-Dianping for US$2.7 billion.
Kentaro IEMOTO, flickr, some rights reserved
Behind Mobike’s innovative business model
As Richardson(2008, pp.133-144) defines a business model as including three dimensions: 1) value proposions, 2) value acquisition and 3) value creation and delivery. The value proposition (what?) refers to the products and services the company offers to customers. The value acquisition(why?) refers to the profit mechanism; why does the business model generates profits? The value creation and delivery (how) refers to how the value proposition is created in the value chain. Mobike has adopted a suited business model of what Schaltegger (2015, pp.3-10) noted to be the future of sharing business which considers both the profitability of firms and the environment/society benefits. It is, as Gao and Li (2020) argued, the innovative sustainability business model that navigates the operation of Mobike in a specific business environment.
Bicycle-sharing refers to a bicycle pool accessed by the public, so it can be used as a means of public transportation. With the downloaded app, users can so easily access to Mobikes’ sharing service and get instant help through each phase during a consumer journey.
According to article one, China has a favorable business environment for the bike-sharing industry due to Chinese long-formed bicycle culture. Specifically, due to the large population and rapid urbanization, Chinese cities are developing rapidly. Therefore, in many cases, individuals cannot cross these cities by one mode of transport. Additionally, it is noted that bike-sharing systems have a lasting advantage over other means of transport for short-distance journeys by complementing the public transport system and solving the problems of last mile travel and reducing emissions of carbon dioxide. The main revenue applied by the company is the riding revenue and deposit for registration.
The company has established a complete supply chain covering the design, manufacture, distribution, collection and maintenance of the bikes in an attempt to preserve the quality of service, the security of payments and the performance of the Mobike app, Mobike served its customers through mobile applications and platforms based intelligent sharing system. Mobike has partnered with market players such as Baidu and BNB providers China Mobile to collect and process consumption data to meet the demands of customer needs and tackle its competitors such as Ofo and Lime. Mobike has also contracted with banks to assure payment security and process user payments and financial transactions.
Mobike as a disruptive social innovation and its transformative effects
John Pasden, Flickr, some rights reserved
According to Lan et al. (2017), traditionally, the systems of consumption and production have been treated as separate flows. The ever-increasing population of the netizens in China has radically prompted a changing social-economic relationship between consumers and producers. This is mainly because communication technology has made it possible for consumers to create, collaborate, produce, and contribute to commercialization. With the sustainability business model introduced by Mobike to Chinese markets, the role of consumers has been dramatically changed in the ICT facilitated sustainability sharing economy, from passive product/service receivers to ‘active value co-creators’(Lan, et al, 2017, p.1504).
When it comes to access-based consumption in physical world, prosumers’ value co-creation behavior is more omnipresent and pivotal in the sharing economy compared with traditional business models (Rayna and Striukova, 2016). In the case of Mobike, in this highly-connected sharing market, the sense of reciprocity and community belonging are essential not only to Mobike’s market promotion strategy, but also to maintain the efficiency of the network (drop off the bikes at spots where the next consumers can easily pick up), ensuring positive usage outcome(monitor, prevent and penalize illicit behaviour of consumers in hopes to maintain the function and quality of mobility resources), sustaining active participation (user stickiness and long-term profitability).
An ICT enabled dockless bike sharing system provides operators with real-time information about riders, bikes and the riding situations. Such technology allows operators to track bike usage and track bikes for management and operation and encourage a reciprocal service provision where both firms and consumers integrate their resources effectively to respond and relate to each other’s needs (Razzaque & Clarke, 2015). For example, in Mobike, even with in-built LPS on every bike some types of fraud like wrongful parking are still not easily detected by the platform’s tracking system. This can be essential for very efficient fleet rotation. Therefore, riders can help assist Mobike vendors to identify rule breakers, impose penalties and correct the consequences of fraud by uploading clear photos of the infringements. As a result, a closer relationship between prosumers and sharing business restructures the relationship between user, shared object, and the sharing platform towards a more integrated communal system based not only on price and personal convenience, but also shared sustainability standards, trust, and social responsibility.
Urca, flickr, all rights reserved
Overall, Mobike has been an influential form of internet transformation. Mobike promoted sustainable consumption and production practices by introducing a sustainability business model that established new forms of bikes rentals and took advantage of the internet’s networked communities to connect between users, shared objects and a sharing platform towards a more integrated communal system that benefits society and the environment while generating economic value.
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